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The European blame game.

Overnight the world markets once again became worried about European debt. We can’t tell why it has suddenly sprung up again now, it isn’t like the problem ever went away. Most of the deficit nations are strangling themselves to death with Austerity. We noticed an article a couple of days ago on bloomberg about the

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Links Sep 30: yuan pressure

China currency legislation passes US House. BloombergBeggar-thy-neighbour. Martin Wolf, Gavyn DaviesFalling $US can save US economy and Obama. Simon JohnsonTrouble for the US ISM? Truck tonnage collapses. Calculated RiskIMF beat-ups. David Uren, Tim ColebatchActual IMF reports. Australia and Liquidity risk.China will boom on. Michael StutchburySingapore clears 90% of iron ore swaps. BloombergCopper rips again. ReutersSlow

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Oz Real estate.. More on the dead canary

This morning we talked about the dying Gold Coast real estate market. We note that the ABC has an article posted today with some more details. A group of property developers face a nervous wait to see how many people will pull out of off-the-plan purchases of more than 900 new apartments on the Gold

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Fitch prepares the rubber stamp (Updated)

The market is apparently abuzz with heavens knows what pertaining to the banks and the Fitch Ratings announcement that they are …probing the potential impact of a spike in mortgage defaults or drop in house prices on the portfolio of Australian residential mortgage-backed securities and banks it rates. Over the last few months, Fitch has

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AUD AUD AUD Oi Oi Oi !!

We have received a couple of e-mails this week from readers asking for advice on how they could benefit from the AUD carry trade. Although we would like to provide this advice, we believe it is in fact illegal to do so. However this does not stop us talking about it. We note just now

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Oz Real Estate.. Polly has snuffed it

Anyone who has studied the Australian Real estate market for any length of time will quickly come to the realisation that the Gold Coast in Queensland is the canary in the coal mine. Back in 2008 the gold coast suffered a major downturn that lead to many finance and construction companies collapsing. The problems became

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Links Sep 29: you versus the corporation

Pick of the day. Forget left versus right. It’s you versus corporations. Barry Ritholz Whilst this is undoubtedly worse in America, before you guffaw, think big bank bailout, ETS, RSPT, policy convergence and oligopolies in every sector…Markets won’t like a smaller QE2. CalculatedRisk and Karen MaleyThough perhaps it’ll be BIGQE2 if this rank US data

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Goldman warns of an Australian recession

This blog has been meaning to post on the relatively recent Goldman Sachs report on Australian housing by economists Tim Toohey, David Colosimo and Andrew Boak. It is a very long report and there is little point in going through it blow-by-blow. But, contrary to the way it has been reported, the research is frighteningly

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Foreign bond deluge

This blogger tracks Australian bank’s foreign liabilities using the ABS’s National Accounts: Financial Accounts. It aggregates the bonds our banks sell to oversees investors. June quarter figures were just released and show that our banks now owe $323.9 billion on bonds with maturities above one year. And another $83.3 billion in bonds with maturities under

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Links Sep 28: Pascoe smackdown

Must read: Pettis does Pascoe. China Financial MarketsWhy the Plaza Accord was not responsible for Japan’s bubble. Models and AgentsWhen will the USS QE2 sail? Calculated RiskIreland and Portugal spreads won’t stop. FTAlphaville Greece looking a bit better. BloombergHope springs eternal. The Dow is going to 38,820 (LOL). BloombergChina trade war. Real Clear MarketsUS dollar

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Who would you short?

Given we received some good feedback to our previous question on hedging we thought we would move on with another one. Again we will leave it posted for a few weeks before collating the answers. We are currently compiling a list of economists and economic commentators who we feel are making Australias and the worlds

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Is Aussie Mac real?

Robert Gottliebsen today takes on government guarantees of Australian banks. It is more than welcome that this topic gets greater public scrutiny. It is nothing short of bizarre that the very foundation upon which Australian banks operate has shifted and yet we carry on as if nothing has changed. Nonetheless, there are a series of

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Currency meltdown

David Uren has a useful piece this morning suggesting the bull market in gold is presaging a global currency crisis. If money is a store of value, printing more of it represents a devaluation. These concerns were further fanned last week by the central banks of England and Japan. Minutes of the Bank of England’s

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(un)luck of the irish

We note once again today that reality has struck back at Europe with economic delusion taking a good punch in the face. The irish economists seemed to have got everything backwards. Perhaps all those good years have got to them; they seriously don’t seem to have a clue what they are doing. Senior Irish cabinet

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Deciphering Treasury’s Red Book

Delusional Economics highlights an important Business Day scoop in which they have gotten their hands on parts of Treasury’s Red Book for the incoming government. It includes the following passages: “A key risk for the Australian economy is our reliance on short-term external debt, largely intermediated through the banking system … Among Australian financial institutions

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It took an FOI…

We are not sure why in a supposed democracy it takes a Freedom of Information request for someone inside the economic establishment to finally admin a problem exists that has been obvious to many people, including us, for a long time. But it seems that it did. Today we note that under duress Australian Treasury

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ABC on the bubble.

As a follow up to the information we posted on CBA last week we note that ABC has a very balanced update on what has been going on. It is nice to see that the media is still capable of giving a balanced appraisal of the situation, and interviewing multiple people to get all sides

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One to add to your favourites

Just a quick post to let our readers know that we just noticed David Llewelyn-Smith ( assuming it is the real one ) has started a blog. It is obviously in its infancy, but given his good work on Business Spectator it could be one to keep your eye on. We noticed in one of

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A plea for a G2

As China and the US shunt their way towards a trade war, I offer this excerpt from The Great Crash of 2008 as a roadmap for economic co-operation between the powers. I co-authored the book with Ross Garnaut but this section was written by the good professor. Sadly, I see little chance of this happening…

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Links Sep 24: Wen flips the bird

Wen: No way, Jose to 20% yuan lift. BloombergWhy the US should have gone Swedish (with the bailout). Barry RitholzUS leading indicators: all about cheap dough. EconompicMr copper still ripping. BloombergIs the US in 1931 or 1921? Baseline Scenario

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Bubbles Macfarlane

This post began as a critique of yesterday’s RBA release of its discussion paper: Asset Prices, Credit Growth, Monetary and Other Policies: An Australian Case Study. The study is in large part an examination of the Macfarlane RBA’s attempts to “lean against the wind” in 2002 and 2003 as an Australian asset bubble emerged. The

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Links Sep 23: Bernanke’s fires up the whirlybird

Gavin Davies notes that the US FED has overturned decades of hard yakka and has now committed itself to making inflation rise. He concludes “…it is not difficult to see why the dollar has been falling, and gold rising”. But Chris Whalen goes bananas on declining profitability in the US banking system and declares ahead

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The CentralBankopian perspective

Given quite a few articles we have been reading over the last few weeks, we have decided it is time for another little visit to CentralBankopia and get another perspective on things.If you are not already aware of CentralBankopia we recommend you firstly read this and this and this Most traditionally educated economists and economic

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Captain Glenn.. Softly Softly

Previously has warned, and then he warned again. Did anyone listen ? Today we note that Dun & Bradstreet report that debt reached yet another record in June, so it looks like noone did. Consumer debt rose to record levels in the June quarter as defaults on commercial leases increased in spite of improving economic