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Market Morning

The luck for risk ran out on Friday the 13th, when S&P downgraded most of Europe (except golden haired boy Germany, who has done nothing wrong….) and US corporate earnings continued to, not disappoint, but underwhelm, particularly the banks. In detail: The UK FTSE dropped 25 points or 0.5% to finish at 5636 points, still

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Data for the Week

The data and announcements season picks up apace, particularly local data with a triple bogey – housing finance, lending finance and unemployment figures amongst other secondary, but important data. Further afield, the US corporate earnings season accelerates along with a brace of household data on Friday and tentative Chinese GDP figures will be closely watched.

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The five stages of economic grief

So, we go on holiday expecting the worst and when we return it’s all good! Europe is fixed (at least it was before S&P interfered), the US is powering, property and equity markets are set to boom. Holidays are wonderful things. There is no substitute for the calm that comes with relaxation and the perspective that

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Data vault

Australian Data New Home Sales After chopping around in the back half of 2011 following sharp falls mid year, new home sales posted a solid increase in November with total sales rising by 6.8%. The rise was driven by non-unit sales which rose 9.8% to 6289 off their second lowest reading since 2000 of 5728 the

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Australian dollar wins the ugly contest

Thin slicing is both a reality and a biological necessity. Whether it’s Malcolm Gladwell in “Blink” or Daniel Kahneman’s System 1  in his latest brilliant book, “Thinking Fast and Slow”  the reality is that there is a part of our brain that, in Kahneman’s words operates automatically and quickly, with little or no effort and no sense of voluntary control. Certainly when it comes

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S&P is right about Europe

As I am sure you are aware by now Standard and Poor’s rating services added some downside risk to Europe over the weekend: Standard & Poor’s Ratings Services today completed its review of its ratings on 16 eurozone sovereigns,  resulting in downgrades for nine eurozone sovereigns and affirmations of the ratings on seven others. We have lowered

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January 16 links: Downgrade blues

Thanks to The Prince for his spectacular links over the break! Global Macro: Implications of Iranian oil embargo. Econbrowser Americas: US surges troops for Iran. SFGate Week ahead for the Dow. Calculated Risk Europe: Europe argues for austerity/stimulus NYT Greece debt talks to resume. WSJ  After the downgrades, the downward spiral. Wolfgang Munchau RBS on

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Weekend Musing: Direct Democracy and Voters

Guest blogger Steven Spadijer, of Australian National University, continues with Part Two of his series on Direct Democracy. Part One is available here. In today’s post I’ll examine the role direct democracy has on informing the people. That is, what impact does direct democracy have on the average voter competence? Does the information-rich environment make

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Chart of the Week: Global Inflation

The chart of the week comes from Scott Barber at Reuters, showing global inflation rates across the major economic areas from 2000 to 2011: At first glance, Chinese inflation looks remarkably like the rises and falls in the Shanghai Composite Index, and at 4.1% is at a very “Western” level of inflation. For reference, here

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European Roundup

You’ll have to forgive me for this week’s effort on Europe. I had some non-blogging work that I needed to concentrate on, so I didn’t manage to get my usual flow of daily posts out this week. Due to this I thought I would provide a supplemental piece for over the weekend. The week ended

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Weekend Links

Markets: Dollar: USD surges on Euro slump, AUD slips, bonds up Treasuries, $US Undollar: gold stalls, stocks slip away, metals fall euro, gold, metals, ore, grains, Aussie, energy,CRB Sovereign Yields: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5

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Trading Day

A very positive day on Asian markets today, as optimism abounds, with the S&P/ASX 200 Index up nearly 15 points to 4195, after reaching 4200 points intraday. This level of resistance remains key, and the market could still retrace back to its rising support line as it routinely tries to clear it: This supports a

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ANZ stays the course

ANZ announced their first “Interest Rate Review” today, independent of the RBA, with variable interest rates for retail mortgages and small businesses left unchanged. In the press release, ANZ CEO Philip Chronican gave the reason behind the decision: In coming to our decision this month we wanted to be clear that these higher interest rates

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China Links

China in Africa: The Real Story: "The Zambezi Valley: China’s First Agricultural Colony?" Fiction or Fact? – I read that commentary, as did many other people. It is regularly cited as a key example of Chinese interest in "land grabbing". It appears in an oft-cited review of land-grabbing published by the International Food Policy Research

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Market Morning

Risk markets continue to be dragged sideways like a husband through a shopping mall, where overnight in Europe, Spanish and Italian debt auctions were very successful with yields falling sharply, the Italian stock market jumping more than 2% on the result. However the news was a bit more muted in the US, with a double

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A new Aussie Euro paradigm?

The Australian Dollar Euro exchange rate has been making new highs this week so its time to talk about whats going on. Last week I posed the question of whether Australia was the new Switzerland. It was a question that I didn’t mean literally but metaphorically. That is, is Australia now the place people see as

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QBE’s poor timing

Yesterday QBE Insurance Group (QBE) shocked the share market with a huge profit warning: QBE Insurance Group foreshadowed a 40%-50% fall in annual profit for calendar 2011 following a late spike in catastrophe claims. QBE said its US$1.28bn profit in 2010 could be chopped in half, partly because the claims bill generated by severe floods

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Global Risks in 2012

Please find below the full World Economic Forum’s (WEF) 2012 Global Risks Report along with the summary discussion video. The WEF Global Risks Report is based on a survey of 469 experts from industry, government, academia and civil society that examines 50 global risks across five categories. This year’s Report contains discussion on a wide

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Chart of the Day: The Big Mac Index

Today’s chart comes from The Economist, highlighting their “Big Mac Index”: …is based on the theory of purchasing-power parity: in the long run, exchange rates should adjust to equal the price of a basket of goods and services in different countries. This particular basket holds a McDonald’s Big Mac, whose price around the world we

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January 13th Links: US data drags

Markets: Dollar: USD slips, Euro climbs, AUD steady Treasuries, $US Undollar: gold climbs, stocks flat/slightly up euro, gold, metals, ore, grains, Aussie, energy,CRB Sovereign Yields: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2

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Trading Day – QBE drags

The risk on rally continued to slip on Asian markets today, as official Chinese inflation numbers showed a fall to an almost Western level of 4.1% for the year. The dramatic fall in the price of QBE Insurance, due to a profit downgrade (a review will be posted tomorrow on MacroBusiness) only with general uncertaintly

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HIA dispels the doom

The Housing Industry Association (HIA) Economics Group has released a note on where it sees dwelling prices heading for 2012. Strangely for an economic review the language appears very defensive and subjective, e.g “slice and dice”, “no bloodbath”, “bleating”, “yacking”, and “peddle” whilst the all too familiar words like “softening” and “price moderation” are dragged

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China Links

China’s skyscraper craze ‘may herald economic crash’ | Business | The Guardian– China could be the next country to go bust, if its headlong rush to build ever-taller skyscrapers is a guide to its future economic health.According to a study by Barclays Capital, the mania for skyscrapers over the last 140 years is a sure

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Tourists continue to lie low

The Australian Bureau of Statistics (ABS) has just released overseas short-term arrivals and departures figures for November, which are largely uneventful. In seasonally adjusted terms, short-term visitor arrivals declined by -0.6%, offset by a corresponding -0.6% fall short-term resident departures. Taking a longer-term view, however, the ratio of tourism arrivals to departures remains at a 25-year low,

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Business stress at record high

Dissolve released their quarterly and year end corporate insolvency and restructuring Business Stress Report yesterday and it makes for sobering reading. According to Dissolve, last year was the worst on record for corporate insolvencies. This has not resulted in higher bad debt/impairment charges for the banks on 2010, but the level is still highly elevated

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Origin floating rate notes

In today’s Bonds Spotlight we take a look at the recently-released Origin floating rate notes.  The $900million in debt was raised primarily to fund Origins contribution to the Australia Pacific LNG project. The Key Details Security type Floating rate note Coupon rate: 90 day BBSW + 4.0% Face value: $100 Payment schedule: Quarterly, in arrears

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Market Morning

Mixed night on risk markets, where in Europe, Germany’s 2011 GDP growth at 3% did little to settle nerves as the data also suggested a contraction for the Euro’s strongest economy, whilst the good anecdotal news from the US Fed Biege Book failed to set US equities markets on fire as corporate earnings season rolled

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European flight to safety grounded

In March last year, while giving a re-cap of my concerns about the European financial situation, I stated: National governments kept issuing bonds to cover the ever growing debt while the backing of the ECB was giving the false impression to foreign investors that Greece was as safe a Germany. So while Germany kept exporting into Europe other national governments kept spending to cover the difference. Those countries

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Chart of the Day: Hibernating Bears

Today’s chart comes from the AAII Investor Sentiment Survey via Avid Chartist, showing that % Bearish sentiment amongst US investors is close to the lowest reading in 5 years. According to the latest survey (week ending 4th January), bullish sentiment is up 8.3% to 48.9%, whilst bearish is down 13.7% to 17.2% – it looks