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Trading Day

The S&P/ASX 200 Index closed down 1.6% or 67 points today to 4005, after a solid up-session in the morning, when the one-two punch of lower inflation and Moody’s downgrade of French banks tipped the bourse into the red. In after hours trading, the market is steady whilst the Euro and US futures point to

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CPI revisionism

Here are a couple of bank takes on today’s ABS CPI revisions. Consensus is that the RBA’s job of holding rates steady just got a bit easier. I beg to differ. The ABS just handed a PR weapon to every disgruntled business lobby in the services economy. Anyways, Rumplestatskin, our very own CPI guru, will

12

Moody’s downgrades French banks (updated)

Just flashing across the terminal, Moody’s moves on French banks: By David Whitehouse Sept. 14 (Bloomberg) — Societe Generale SA had its debt and deposit ratings cut by one level to Aa3 from Aa2 with a negative outlook by Moody’s Investors Service. The bank has adequate capital to support its exposure to Greece, Portugal and Ireland, Moody’s said

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Taxpayer takes it in the team

Last weekend Wayne Swan announced a new permanent guarantee of bank deposits up to $250,000 under the Financial Claims Scheme (FCS).   The existing scheme, introduced during the financial turmoil of October 2008, guarantees bank deposits up to $1million, and will expire when the new scheme takes over on 1 February 2012. We now, in theory,

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China is not a white knight

The last day or so has seen a string of wild rumours about China buying European bonds.  A hilarity in the whole thing is that in another report, Giulio Tremonti, the Economy Minister, complained that Asian investors just won’t buy bonds because the ECB isn’t buying enough.  So are Chinese really buying?  Probably. There is something

22

SQM reports falling listings

The latest SQM research newsletter contains some more rays of sunshine for the property market. Figures released this week by SQM Research revealed that residential property listings have actually declined during the month of August 2011, coming to a total of 362,793 nationally. Falling by 14,522 listings since July 2011, total amount of stock on

25

Interest rate magic

Consumer Confidence for September is out and shows a jump of 8.1%. Bill Evans puts this down to: This is a surprisingly strong result. We think it emphasises just how important interest rates are to households. Recall that since early May the Reserve Bank has been threatening to raise interest rates. As recently as the August Board meeting

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Chart of the Day

Today’s chart comes from Avid Chartist, and shows why understanding the US equity markets for an Australian investor is paramount. The chart shows the ASX 200 and S&P 500 both priced in US dollars (USD), for all of 2011 up to September 12. They have tracked each other especially closely since early May, just after

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Australian Housing Valuation Report

Australian housing is overvalued. Nobody denies it. Debate remains, however, about how overvalued. Surveys by The Economist and Demographia claim Australian housing is the most expensive in the world. On the other hand, the Reserve Bank of Australia and local data providers like Rismark acknowledge the overvaluation but see it as less extreme and sustainable. The

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Do we need a media inquiry?

Well…yes…I should say so. Rupert Murdoch owns 70% of Australian newspapers. One of his UK operations has been shown to use unethical practices on an unsettling scale. Those two seem fair enough reasons to me. On the first, the concentration of ownership in newspapers is both a competition issue and a social-democratic one. Many of

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A crazy 24 hours in Europe

Another crazy 24 hours for Europe. It would seem that Angela Merkel is trying to muster some form of actual leadership and set a direction for Greece. Her first step was to tell her counterparts in German parliament to stop talking to the media because every time they do the market blows up. Her second

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September 14 links: Myths and rumours

Down: $US, grains, Treasuries  CCI, metals, Euro, Aussie, gold,  energy Rampant contagion: 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 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year 10 Year Germany 2

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The Pascoe indicator

This afternoon, Michael Pascoe wrote a soothing piece on the European crisis that I found troubling. We don’t need to get past the first two paragraphs to find out why: Hands up anyone who thinks a Greek debt default is inevitable. OK, absolutely everyone can all put their hands down. That’s what Europe’s banks think too –

7

Trading Day

The S&P/ASX 200 Index closed up 0.8% or 34 points today to 4072. In after hours trading, the market is up another 15 points whilst Euro and US futures point to gains. Asian markets experienced similar moves, with the Nikkei 225 up nearly one percent to 8616 points, whilst the Hang Seng is closed for

21

Insolvencies jump

Just in case you missed my recent post about growing Australian business insolvencies or are still living on planet Bullhawk with the belief that everything is just fine and anyone complaining is simply a whinger, here comes Dun & Bradstreet with even more evidence to the contrary: Australia has joined Europe as the only markets to

12

NAB Survey shows markets fallout

The Nab Survey for August is in and business conditions and confidence are suffering on the back of global volatility. According to the NAB boffins: Business confidence dropped sharply in August, with heightened global uncertainty, large falls in equity markets and the fear of debt market contagion. Confidence deteriorated across all industries, except recreation & personal services

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2008 rerun

From the excellent folk at Forecast comes another disturbing prognosis this morning: European banks continue to be hammered again this morning on a combination of escalating Greece-centred periphery fear, generalised growth and risk re-pricing (Hang Seng hit especially overnight) and also bank downgrade talk. Once again, the negative feedback between periphery pricing, bank valuation, and

10

Chart of the Day: Secular bull

Reader JR asked yesterday what is meant by a “secular” market – here is the best visual explanation and puts current market volatility in context, from Doug Short. The literal meaning of the word: Market historians call these “secular” bull and bear markets from the Latin word saeculum “long period of time” (in contrast to

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Is the equity market a dill?

Yes, I’d say it is. As FOMC member, Thomas Koenig put it recently in a CNBC video interview with Steve Liesman: …a capitalistic economy – if you really believe in its long-term benefits – has cycles. People do make mistakes. See, the market is valuable not because it’s the smartest in the world, but because

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Greek default certain

Another night of tension in the Eurozone. The Euro continues to head south and once again markets were down. The probability of a Greek default grew once again and doesn’t have far to go to reach 100 percent: Greece’s chance of default in the next five years has soared to 98 percent as Prime Minister George

64

Attention manufacturing, here’s your hire

Not just manufacturing, actually. There needs to be a new umbrella peak body/lobby group covering all non-resource exporters – manufacturing, tourism and education (maybe primary goods too). That group needs to go head-to-head with the Minerals Council of Australia over the soul of the Australian people and the fear gene of the Australian government. And

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Whose GDP is it anyway?

They say what gets measured gets managed, but a measure as nebulous as GDP needs careful interpretation when used as a guide for economic management.  Putting aside the conceptual problems surrounding the use of GDP as a measure of progress, there is still the practical problem of taking estimates of production or expenditure in current

11

Did you hear about Cochlear?

Cochlear (COH, previously covered at MB here) announced a voluntary recall of its Nucleus 5 implant products yesterday.  The share price was promptly massacred, closing down 20% to $57.50.  The main jist of the recall was as follows: COH is undertaking a voluntary recall of the unimplanted Nucleus CI500 cochlear implant range and is currently

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September 13 links: The crash that didn’t come

Up: $US, gold energy, Flat: Treasuries Down: CCI, metals, Euro, Aussie, grains Greece parabolic: 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 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year 10 Year Germany

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Trading Day

The S&P/ASX 200 closed down 3.7% or 156 points down today to 4038. In after hours trading, the market has slumped another 20 points whilst awaiting the Euro and US sessions, both of which are down 2-4%. Asian markets experienced similar losses, with the Nikkei 225 down 2.3% to 8535 points, now below its earthquake

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Balance of trade still in surplus

The ABS today released their estimate of the balance of trade in goods and services for July.  The headline data showed that trade surplus inched up a little in both trend and seasonally adjusted terms since June to around $1.8 billion. This is good news. While the monthly release is extremely volatile, the surpluses over

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Swannie’s con job

Did you know the Australian government is holding a jobs forum on October 6th? Me neither. Apparently the uptick in unemployment has them so spooked that they feel they need to come out on the front foot and have a confab. I stumbled upon this fact yesterday whilst choking on an appalling quote from Treasurer

7

Australian bank stress still elevated

Here’s a couple of quick charts illustrating the degrees of market-perceived bank stress across the Western world. Today’s CDS prices for Europe and the US: And Australian banks: Not much alleviation of recent stress for Australian banks, though no deterioration either, which has definitely happened in the European and US banks in the last week

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Lending finance sees an uptick

The ongoing sense that we’re seeing a bottom (at least temporarily) in credit data, received a boost today with a small bounce in the ABS Lending Finance report for July. The key points are below and show an across the board improvement with the exception of fixed personal finance. The biggest uptick is in business