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FIFObids gets underway

In another first for the Australian labour market, a new website has launched where mining companies can bid for FIFO workers. From the SMH: A website, inspired by Australia’s skilled labour shortage, has seen resources companies bidding for workers like eBay bargains this week. The privately funded FIFObids website, where companies can bid on the anonymous skills profiles

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Dwelling starts miss big

The pain in housing construction is becoming very palpable indeed with a huge miss in first quarter dwelling starts from the ABS today. Consensus for some reason expected a minor fall of -2.3%, as opposed to what was delivered, -12.6%: The internals are all a bit depressing too: To give you some perspective, that total

2

Relief for bank funding costs

Over the past week, CDS prices (the cost of insuring a five year bond against default) have corrected significantly on easing European worries: This pricing suggests the banks could now issue unsecured debt in the range of 160bps over swap, which is a long way down from last week. Of course, over the longer term

0

Leading indicators sing a gloomy tune

Two leading indexes for Australia are out this morning and both sing a gloomy tune for April. The Westpac/Melbourne Institute version rose slightly but remains quite depressed: The annualised growth rate of the Westpac–Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future, was 0.2% in April 2012, well

20

No news like EZ good news

The AFR is reporting this morning that a European bailout is a done deal: European leaders are poised to announce a €750 billion deal to bail out Spain and Italy, The Telegraph has reported from the G20 summit in Los Cabos, Mexico. The Guardian has reported that German Chancellor Angela Merkel is poised to allow the euro zone’s

11

MacroBusiness Morning: supergreen!

by Chris Becker  Macro Wrap There’s nothing else you can call last night’s actions on world equity and peripheral debt markets (especially if you’re a fan of Bruce Willis sci-fi). A quick glance at any quote board and its greener than The Hulk’s undies – with Italian and Spanish markets happier than a fox in

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Rental vacancies flat in May

By Leith van Onselen SQM Research has released its rental vacancies report for the month of May, which revealed that the vacancy rate nationally has remained flat at 1.8%, with Melbourne (3.1% vacancy rate) once again leading the nation. Year-on-year however, vacancies have risen by 7,270, with the national vacancy rate increasing by 0.2% since

0

Europe’s waning policy credibility

Courtesy of Sober Look. The historical chart from Barclays Capital overlays the timeline of the various Eurozone policy actions on top of the iTraxx Main spread. It’s a good chronology of policy announcements and market stress periods. As a bit of background, iTraxx Main is a CDS index referencing 125 investment grade European corporations. It’s

2

Economic backwardness in China

Exclusively from Michael Pettis’ newsletter. Premier Wen’s recent attack on the Chinese banking system last month has highlighted what was already a very interesting debate on Chinese banks and the Chinese financial system.  There is a growing sense that the Chinese banking system is deeply flawed and needs to be reformed. But why should China reform

6

China’s wild printing press

Courtesy of Also Sprach Analyst. China’s M2 money supply has doubled since the collapse of Lehman Brothers.  M2 money supply currently stands at around RMB90 trillion, and it was at about RMB45 trillion the month before Lehman collapsed.  Thus the so-called RMB4 trillion stimulus after Lehman’s collapse (which is more like a RMB8 trillion fiscal

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Links June 20: All over the shop

Global Macro: Hedge funds bet on big Bunds sell-off (Financial Times) Austerity Doesn’t Pay as Debt Markets Ignore Rating Cuts (Bloomberg) US markets watchdog hits at ‘risky’ London (Financial Times) United States: Are US Treasury Bonds in A Bubble? (Forbes) Banks Worry As Breakup Talk Revived After JPMorgan Loss (Bloomberg) Credit growth expanding in the

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ASX Shares Daily – 19th June

By Chris Becker Remember to read “Trading Week“, which is normally published for free Saturday morning (but is moving to a new timeslot and format), to put these events and ideas in context. I am disapoint. That is the main takeaway from today’s action in risk markets across Asia as the expected post-Grecian orgy in

67

The letter from Fairfax staff to Gina (updated)

From the SMH, the following has was sent to Gina Reinhart on June 7 (republished with permission). Dear Mrs Rinehart, The journalists employed at Fairfax metropolitan media – The Sydney Morning Herald, The Sun-Herald, The Age, The Sunday Age and The Australian Financial Review – have asked us, as their representatives, to write to you about recent reports concerning your attempts

14

RBA Minutes suggest cuts are done for now

Find below the RBA minutes. Looks like the bank was more sanguine than I going into the last meeting but cut anyway as insurance against the likelihood that “precautionary behaviour both abroad and at home would intensify”. Quite sensible. The “finely balanced” rhetoric of the decision suggests strongly that I have been right in arguing

0

China links

Courtesy of Sinocism. Now that the Philippines has blinked first, China is also pulling its boats out of the disputed Huangyan Island/Scarborough Shoal in the South China Sea. But this dispute is deferred not resolved, as we can see from Chinese Foreign Ministry spokesman Hong Lei’s comments: Philippine Foreign Affairs Secretary Albert del Rosario said Friday that Manila

29

Is Fairfax a buy?

It’s pretty hard to avoid all the noise over Fairfax at the moment, although from an investment perspective it is a pretty marginal issue. The languishing share price represents a lot of burned investors who are as unlikely to return as the lost readers of print. Cost cutting is not a way to succeed in business, getting new revenue

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Canberra reacts to Fairfax

From AAP: Stephen Conroy reckons: “If she was to directly interfere and breach that charter it would actually lead to a crisis of confidence among the readership,” he said. …Ms Rinehart was entitled to turn the Fairfax newspapers into “the mining gazette” but the company’s other shareholders needed to know about that. “Senator Conroy said

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Mining moves to control the media

There’s lot’s of stuff going on at Fairfax. Printing plant closures. Job losses. A reorientation towards internet delivery. It’s all very difficult and my sympathies go out to those families affected. Sadly, however, I am not confident that the transformation can succeed. It simply does not address the core challenge confronting the company: declining advertising

18

Parko’s poisoned chalice

Yesterday, Secretary of the Treasury Martin Parkinson spoke for CEDA and the result was a nice illustration of the poisoned political economy that he must deal with. Let’s take a look. My first key message is that Australia is well-placed to cope with further global turmoil. This is due both to the underlying strength of

23

Europe’s moment passes

I been covering the European crisis for over two years and throughout my commentary I have been very clear that I consider the policy responses to the crisis to be misguided, delusional and dangerous. One of my major concerns has been that the implementation of what I see as a deluded ideology would eventually lead to a

1

Why investors hold US Treasuries

Courtesy of Sober Look. Financial advisers continue to profess that US treasuries should be a large part of a balanced portfolio. With the 10-year treasury yielding around 1.6%, the advice is hardly based on return expectations. It is also not due to expectations of mark to market gains. The up-side case in being long the

1

Rent, and lot’s of it: Chinese edition

Late last month, UBS fixed-income research told investors that Renhe Commercial (1387.HK), a commercial real estate developer in China, has not sold a thing for the year so far, thus recommending investors to sell their debt: Our meeting with the company indicated that Renhe had yet sold any operating rights YTD. This, in our opinion, could be attributable

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Links June 19: Fading joy

Global Macro: Do not put your faith in the false deities of economists (Financial Times) Just how at-risk are investment managers to the disruption of algorithmic investment models? (Absolute Returns) Egyptian Elections And Israeli Escalations (Zero Hedge) Roubini: The Global Perfect Storm (Pragmatic Capitalism) “Today’s retirees are living through what might prove to have been

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ASX Shares Daily – 18th June

By Chris Becker Remember to read “Trading Week“, which is normally published for free Saturday morning (but is moving to a new timeslot and format), to put these events and ideas in context. Unicorns and rainbows today across the ASX200, up almost 80 points or nearly 2% to 4136 points, in a clear breakout from the

1

Asian investors nervous about Australia

The future of equity markets will very much depend on what the big money in Asia will do. McKinsey has argued there will be a $12 trillion shortfall in equity investment by the end of the decade, a notional figure that has the advantage of being untestable. Royal Bank of Scotland  has has a look at sentiment