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Links Oct 25: Services will save us!

Services no answer to Dutch Disease. Martin Feil CEOs won’t invest overseas despite high dollar. BloombergUS house prices resume their plunge. Calculated RiskThat’s before ForeclosureGate hits the market. FTMarket is about…oh…halfway down. CNBCForeclosureGate: Unimaginable amount of litigation. NYTFitch prepares downgrade for Wall St on Volcker. Zero HedgeG20’s Sino kiss: Imbalance paralysis, new IMF powers. FT,

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Weekend Mailbag

We are getting quite a bit of e-mail from readers these days so we thought we would start a weekend mailbag to answer some questions and share some information with the broader audience. We will not be providing any identifying information except first name (which is probably fake anyway :)) Peter Asked: Do you think

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Weekend Reading

Australian houses: highest in the known universe. The EconomistInteractive chart of global house prices. The EconomistRMBS guarantee alert: GSEs still hemorrhaging. NYT, Calculated RiskFOMC & QEII. Calculated RiskG20 flips bird at Geithner rebalancing plan (surprise!). ReutersIronic, US canned Keynes’ similar plan at Bretton Woods. MonbiotGod save austerity (or, QEIII). UK debt costs collapse. FTAustralia Post

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The economic conversation must be broader

We recommend our readers pop over to Houses and Holes for a very good analysis of the current Australian Banking environment and why Joe Hockey (the shadow treasure of Australia) is ruffling feathers. As noted by David, and a number of other sources , Joe Hockey has made a fair call to ask that Australia

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Go Joe

Yesterday, Shadow Treasurer, Joe Hockey, was torn to shreds for making the most sensible suggestion regarding Australian banks that this nation has heard since the global financial crisis. First on ABC radio and then again in a doorstop interview, Hockey made the case that the government needs to act to rein in unilateral interest rate

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Links Oct 22: Post haste

Australia Post to take on banks. The AgeBritain slashes. Washington PostForeclosureGate and systemic risk. Baseline ScenarioA first for China. GDP down, CPI up. EconompicAnd here’s why. John GarnautGlobal steel production falling. Steel OrbisThe road to tariffs. John TaylorUS needs help breaking yuan peg. FT Interesting question, this. If the US is going to start with

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Reverse engineering ore prices

A couple of excellent pieces are available today on the looming iron ore glut. The first is by Malcolm Maiden of The Age on Australian miners and their plans to expand production. The second is by Australasian Investment Review via the IBT on broader statistics in the global seaborne trade. Both are worth your time.

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No wood, all trees…

According to Banking Day: In a speech to a Finsia financial services conference, [RBA boffin Luci] Ellis argued that far from being complacent about a bubble, the RBA was searching for danger signs. But, she said, it was important to go beyond statistical averages to understand the housing market. As an example, she set out

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Links Oct 21: Iron fist

Fall out from China’s rate rise. John GarnautThe big supply-side iron response. Malcolm MaidenThe coming ore glut. IBTShort term Chinese ore demand. Steel OrbisBHP: ore pricing to go monthly. Trading MarketsCoal boom ahead. Mining WeeklyChina gettin’ nasty on rare earths. NYT American plutocracy. Robert ReichCapital controls debated. FTbeyondbricsSaskatchewan hands Feds excuse to reject BHP bid.

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Qld regional RE worse than we thought.

A busy day today, so we have no time to comment on any of the big issues. However we were sent a report today by a reader ( hat tip to “jess”) about the Queensland Real Estate market. It is a little old, but it is quite interesting because it shows that Queensland prices have

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Chinas’ adjustment, the AUD and Oz.

China confused the credit driven crazy world last night by doing something odd, actually trying to do something about a credit bubble and its not-so-hidden inflation problem. China sent global markets reeling after its central bank announced that it was lifting interest rates for the first time in nearly three years. The move pushed the

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In the dark

According to Reuters, Luci Ellis of the RBA said today that: Financial institutions will have to share more information on their activities with authorities to lessen the risk of another global financial crisis… it was important that regulators could detect the build-up of risk and leverage as it happened and where the risk was concentrated.

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It begins !!

As we mentioned on monday. We note today that the stink of death is leaking from the foreclosuregate pit. It doesn’t seem to have hit the markets yet, but we think it is only a matter of time Well it looks like that time started last night. As we said in regards to PIMCOs actions

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Irrational policy

For the past few years, we’ve heard a great deal about the irrationality of punters in the “market”. And rightly so. We humans are a bunch of hysterical children driven crazy by bouts of greed and fear. Not to mention other feelings. But we never hear about the same irrationality effecting policy-makers. Somehow our regulators

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Links Oct 20: Policy chaos

US QEII fail. Joseph StiglitzUS QEII fail. II. Stephen RoachBOE QEIII fail. BloombergRBA fail. Stephen BartholomeuszChina raises interest rates. BloombergA good idea. Michael PettisQEII bad for China says Yu Yongding. BloombergThe political economy of QEII. The EconomistChina still buying Treasuries (hint for Gotti). EconomipicForeclosureGate gets serious. Zero Hedge I, IIRisk off: I, II, IIIGreat news:

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Nothing bold about that.

With a bit of hope we read the first paragraph. ANZ Banking Group Ltd chief Mike Smith has called for bold economic reform, saying Australia’s growth cannot be sustained without a leadership push to liberalise markets and improve productivity and innovation. Yes !! Finally one of the banking Admirals admitting that pinning Australia’s hopes to

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RBA and the soft landing theory

We note the RBA has released the minutes of its RBA meeting today, and the news still is not good for the indebted. In the central bank’s minutes of its October 5 board meeting, during which it surprised the market by keeping the official cash rate steady at 4.5 per cent, the RBA said members

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Can you find the exit nearest you ?

We have discussed the declining prospects for Oz housing over the last few months as it becomes apparent that the last decade of debt driven government supported growth looks like it is finally coming to an end. Without further government intervention the market seems destined to take the tour towards the bottom. This is a

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The gold bubble

Ten years ago, when the NASDAQ bubble came a-cropper, this blogger was a day trader. And yes, like many others it took a bath. It was an invaluable lesson. It offered an inside glimpse of bubble psychology. How a market can dislocate and seize the collective imagination. And how, afterwards, the whole thing appears so

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Links Oct 19: Gold rush

ROK joins gold rush. FTGold over the long run. EconompicGold’s bull market. PragCapWhen the gold bubble bursts. FTFed wants equities bubble. David RosenbergAnd from 2009, when Greenspan confessed the same. FTBut can only get it through emerging markets. Doug NolandWho’s buying the US Treasury’s in the UK? (take a guess) Zero HedgeROK rocked by currency

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QE2 and the stink leaking from the pit

We note today that the stink of death is leaking from the foreclosuregate pit. It doesn’t seem to have hit the markets yet, but we think it is only a matter of time. Earlier last week we asked: The loans on these foreclosed properties were on-sold ( in some cases many times ) into the

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Simple Solution .. Decriminalise crime

In the ongoing story that is the US housing debacle we noted on the weekend that the banking analysts have decided the best outcome for everyone is to decriminalise any crimes that the banks or their agents may perpetrated. There is also a persistent concern that the crisis could cast a pall over the fragile

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Oversupply of Oversupply

It only took one real estate agent to claim “we have a problem”, now they can’t stop themselves. We noted over the weekend that Western Australian Real estate agents have now decided they can declare their issues too. HOUSE prices in Perth are on a downward trend with sellers reducing asking prices by 6 per

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Enemy mine (updated)

Any regular reader of this blog will know two things for certain. The first is that it is intensely concerned about the effects of Dutch Disease. The second is that it finds Ross Gittins’s smug baby-boomer prattle intensely annoying. So, when you put those two things together, spleen hits the screen. From Gittins today: Our

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Links Oct 18: Give me Dutch Disease

Gittins all in for Dutch Disease. Ross Gittins, Alan KohlerParity porn from the Treasurer. SMHI will post on these three later today.ForclosureGate smashes everyone. Megan McardleWeek ahead for the DOW. Calculated RiskSolving Ireland’s pain. Businessweek, FT AlphavilleSun King shadows Obama. FTDot-com over again. Robin BrombyBan these now. FTOPEC and the weak dollar. AFPShark chewing through

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BHP to get shafted?

And now for something completely different. As you know, BHP is bidding for Canada’s dominant potash producer, PotashCorp. On Saturday, the only other mooted bidder, Sinochem backed out. So the way is open for the Big Australian. Or is it? This blogger had a spare moment to peruse the Investment Canada Act and its National

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One graph to rule them all

Say no more !! ( from the RBA ) Hat tip to traveller. Disclaimer: The content on this blog is the opinion of the author only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation, no matter how much it seems to make sense,

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Weekend Reading: Currency war, but not here

Currency crisis is now. AlphavilleAnd how. Michael HudsonRoubini agrees. Nouriel RoubiniNow it’s bovine shrinkage. FT Don’t worry, keep eating, little sheep. Barf. Ross Gittins2008 redux complete. Banks smashed. All else up. Bloomberg Bill Gross telegraphing MBS bailout. Zero HedgeBut baby steps on QE2. FT, Calculated RiskPhysical-backed metal ETFs. Be afraid of this. ETFdbQuarterly ore contract

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Here comes the oversupply.

As we talked about way back in May, at end of every bubble there comes an admission that the “undersupply” of housing was in fact a debt driven myth that only really existed because there was an oversupply of speculators. As the market collapses these people disappear and all of a sudden there are too