Trading Day – Friday the 13th

The S&P/ASX 200 is down slightly this afternoon, with some intra-day buying support similar to US markets recovery last night. Asian markets are down, with the Nikkei down 0.25%, the Hang Seng 0.4% but Singapore up over 0.46%. The AUD is back to 1.06 against the USD, and 86 against the Yen (which is highly

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Australian dollar on the skids

I think the AUD/USD exchange rate has made a medium term top at 1.1013 which is associated with what appears to be a turn in the USD and other markets at present. Turning points are never easy times for markets as the previous bulls cling to their tendencies and the emerging bears are a bit


Cut your debt, fool!

Wayne Swan spent a great deal of time reminding the nation of just how tough this year’s budget was going to be. While this is hardly a new strategy for federal treasurers, this year, the bogan had a creeping sense of unease; folk in their ivory towers were whispering about cuts to middle-class welfare. Really,


Stagnation nation

The claim that Australian home prices will stagnate whilst incomes catch-up is a prediction commonly made by housing commentators. And this view is not without precedent. Between 2004 and 2009, Sydney home prices remained relatively flat, meaning that prices fell in both inflation-adjusted and income-adjusted terms (see below chart). It behooves us then to assess the


Peak profits

The big four banks have posted interim results (ANZ, NAB, WBC) and updates (CBA) this last week to the market. In this post I intend to articulate the consensus view, analyse and value the banks and provide a contrarian view to why they are likely the most riskiest stocks on the market. Consensus rules The


Sanity prevails on Hazelwood

The Victorian Coalition government confirmed this week that it had terminated talks on the previous government’s proposals to shut down two units at the Hazelwood power station in the Latrobe Valley. The focus on Hazelwood is because it’s the most greenhouse emission intensive plant in the country. This is as result of its age (latest


Is the RBA’s work done?

Yesterday’s employment data to my mind was more than simply noise, regardless of what the punditry is saying. Houses and Holes used a couple of my charts in his post yesterday and the first one showed the trend in month on month employment growth and it is clear that it has been in a down trend for


Links May 13: China tightens again

Up: energy, Flat: $US, Aussie, gold Down:  grains, ore Oil rout. Reuters IEA predicts ongoing high oil prices. FT The truth hurts. Bloomberg Vietnam battles inflation. The Ecomomist US’ stubborn unemployment. Calculated Risk Which central banks are buying gold? Zero Hedge US PPI high on oil. Zero Hedge Commodities and margin calls. Alphaville Fed and asset prices. Tim


Employment thumps the bullhawks

The total number of people employed in Australia fell by 22,119 in April.   This is the third time in the past 5 months we have seen the total number of people employed in Australia fall. Yes, that’s right, the 3rd time in 5 months.   The market was looking for a gain of 17,000


Housing’s Budget

For almost a year now I have been warning about the Australian market. It became clear quite some time ago that the falling rate of credit issuance towards housing and the demographics of Australia where going to lead to downward pressure on prices. Most recently I have been stating that I can’t see any new


Trading Day – 12th May

The S&P/ASX 200 is down over 1.4% this afternoon, after digesting the slump in commodity prices and US/Euro markets overnight. Asian markets are all down, with the Nikkei down 0.8%, the Hang Seng almost 1% and Singapore just over 0.6%. The AUD has slumped to just above 1.06 against the USD, with a midday update


Euro weakness changes the currency game

Last year the EUR got down under 1.20 and I was convinced it was going to its true value, in my opinion anyway of 1:1 with the USD. Nothing against Germany or even France for that matter but the bolted on Eurozone area to these and other “core” nations really does make the sum of the whole


Grantham calls the top

For those of you with a memory longer than a few days, it was Jeremy Grantham of GMO who famously called the bottom in the great GFC equity rout. Whilst I never put anyone on a pedestal, Granthan is one of the few equity strategists that sees the way markets actually work these days. Overnight


Links May 12: Sell

Rocket: $US Smashed: energy, gold, grains, Aussie, CRB Flat: ore Bloomberg says its inflation. Bloomberg Grantham calls a sell. Zero Hedge Treasuries are back! Crossing Wall St US trade deficit blowing out. Calculated Risk Journey to default. Martin Wolf Chinese commodity demand falling. Alphaville Inflation spreading beyond food. Bloomberg SocGen. No, its deflation. Alphaville


RBNZ tells it straight

The Reserve Bank of New Zealand (RBNZ) today released its biannual Financial Stability Report (FSR).  For years, I have been a keen reader of the FSR as it provides an alternate view to the biannual Financial Stability Review released by the Reserve Bank of Australia in March and September. I also follow events closely in


Transitional Planning for Boomers

Readers of MacroBusiness have turned my attention to a recent “AskNoel” question on Domain from 2 (early) baby boomer investors. Q. I’m 48 and my husband is 55. As a result of renovations blowing out to $300,000, our mortgage is $690,000.  Our home is worth $1.1 million. We have two positively geared investment properties, owing


Trading Day – 11th May

The S&P/ASX 200 is up almost 1% this afternoon, after digesting last night’s Budget. Asian markets are up generally, with the Nikkei up 0.5%, the Hang Seng steady and Singapore up slightly. The AUD is rising past 1.085 again against the USD and 87 against the Yen (which is highly correlated with the ASX200) Local


Big retailers confirm consumer funk

Given some of the, er,  happy interpretations in the press, you really should read the quarterly releases of David Jones and Myer for yourself (full reports are at the end). Not much here to worry the RBA. First, DJ’s: DAVID JONES REPORTS 3Q11 LFL SALES OF -1.3% 2H11 PAT GROWTH GUIDANCE ~+5% ·  Challenging trading conditions


Budget buy bye

The budget does not seem to have spooked equity analysts, but it has not excited them, either. Perhaps, as Delusional Economics suggests, it is about the best that can be done in the circumstances — that is, not much. Balance the books, hope China continues to do well, nibble at the marging on skills shortage


CBA Quarterly Update

As the last of the big four banks, Commonwealth Bank of Australia (CBA) released its quarterly update today. CBA operates on a slightly different financial calendar to the other 3 big banks and this is just an update with a summary, not interim/half year results. Profit and Earnings Unaudited cash earnings for the quarter ending


Public debt deficit

The Budget papers are huge and Delusional Economics has done a great job of summing up them up. But for statistical wonks like myself it is the full papers that really excite . I’ll troll through the papers over the next day or so to draw out anything interesting. For today, the below chart was


Crash testing

As mentioned by Delusional Economics yesterday, the bastion of the Aussie punter, David Koch, has issued a warning that Australian home values are on the slide. The question now is how far will prices fall and over what time period? SQM Research’s Louis Christopher recently issued a newsletter predicting falls of 5-10%, whereas many bank


Links May 11: Budget warfare

Up: energy, gold, grains, Aussie Down: $US QE forever! Bloomberg Commodity financialisers get whacked. Matthew Lynn CME hikes margin requirements for oil. MarketWatch Germany gives in to Greece. Bloomberg Surprise! Not. 60 billion more for Greece. FT Bahrain bulldozes Shia. McClatchy (h/t Naked Cap) Gaddafi gasping for gas. FT US housing crashing at 18% per annum. Calculated Risk China surplus


Budget paralysis

Wayne Swan’s budget handed down his budget last night. His speech began with: Mr Speaker, the purpose of this Labor Government, and this Labor Budget, is to put the opportunities that flow from a strong economy within reach of more Australians. To get more people into work, and to train them for more rewarding jobs. So


Koshee’s news

David Koch is an interesting chap. Not because I think he is able to provide valuable economic insight, but because I feel he is the average Aussie’s TV economist. So once Koshee says something it means two things to me. Whatever it is happened six months ago. Everyone in the country now knows about it.


Budgeting the Australian Dollar

It’s that time of year when the financial community’s attention is focussed on the Australian Government’s budget. But the Federal Budget is not the only game in town at the moment, companies all over Australia are also doing their sums as they try to work out their budgets for the next and subsequent finanical years.


Trade bounce

The trade balance roared back in to surplus in March as exports surged 9.2% over the month, outpacing the 1.2% rise in imports. The surge in exports was drive by an 11% jump in non-rural goods exports which account for two thirds of total exports. While imports were mixed with intermediate imports climbing 7.5% while


Trading Day – 10th May

The S&P/ASX 200 is down slightly at midday, with strong intra-day selling pressure. Asian markets are mixed, with the Nikkei down a little but Hang Seng and Singapore up. The AUD is steady at 1.07 against the USD and 86.5 against the Yen (which is highly correlated with the ASX200) Short term price action as


Go slow on carbon? Check!

I was at the Melbourne Mining Club lunch yesterday where BHP Billiton Chairman, Jac Nasser, delivered a thought-provoking speech which touched on carbon, among many other issues. A transcript of his speech is available here. His call for a “go slow” on carbon has resulted in front page headlines in The Australian and the Fin


Lilliput Inc.

Australia’s bigger companies, with a few exceptions such as BHP, Rio and News Corporation, are awful at globalisation. This is becoming obvious with the Australian dollar at such high levels. Global companies adapt to high currencies by relocating production elsewhere, acquiring offshore, manipulating their cross border value chains. That way they can at least respond,