22

Equities Spotlight: BHP

This is the first of a regular equities analysis post we’ll be introducing to MacroBusiness.  In the posts we’ll be taking a single company and analysing its business and financials from the perspective of a fundamental/value investor.   In a continuation of this week’s earlier post on BHP and the AUD, today we  look at BHP Billiton. The Business BHP

Latest posts

15

NZ moves to quarantine negative gearing

When it comes to recent banking/housing policy, our Kiwi cousins across the pond have it all over us Aussies. Back in April, I wrote about three policy actions being undertaken by the Reserve Bank of New Zealand (RBNZ) and the New Zealand Government aimed at reducing the economy’s exposure to the housing market and improving financial

42

The gold vigil

I’ve said before that investing is more about psychology than about fundamental valuations, numbers and metrics. In the case of residential property’s evil “twin” brother, gold, this is more true than ever. Regular readers know that I am watching out for signs of the current bull market in gold becoming an out of control bubble.

8

High time for Wallis

As predicted, the national media has sidelined the Moody’s decision. They could not be more wrong. It is time to revisit a new Wallis Inquiry. Australia has a big imbalance. Call it what you like. A housing bubble. An overvaluation. An external imbalance. It doesn’t matter. It just is, and the rest of the world knows

24

Richard Koo on QE3

Mr ‘balance sheet recession’ himself holds forth on the follies of QE. Highly recommended reading… As I spoke with investors in London and Geneva last week, markets were rocked by a resurgence of fiscal problems in Greece and a steep drop in the price of silver andother commodities.In London there was talk in the market that the drop in commodity

8

HIA .. Zombies in the new economy

The number of people and organisations waking up to the fact that their “old growth” business models have suddenly imploded continues to grow. Yesterday it was the Housing Industry Association’s (HIA’s) turn to use its last gasp of air to scream at the government for even more stimulus for housing. Fresh cracks have appeared in

7

The black swans of Greece

I have spoken about Greece many times before. It is a country in all kinds of trouble economically caused by fiscal mismanagement and monetary  incompatibility. What has always amazed me is that for some reason, ignorance or delusion or a bit of both, anyone who expected to be paid on their Greek debts thought that

15

May 19 links: It’s all good!

Rocket: grains, CRB, energy Up: Euro, $US, gold Flat: Aussie Hammered: ore Is it dangerous to borrow in dollars? Alphaville on Moody’s. MB gets a mention… No default for Greece says EU. Bloomberg Meanwhile, IMF says EU is stuffed. Reuters EU after Strauss-Kahn. Martin Wolf Who will get the gig? Simon Johnson Greece default worse than Lehman. Guardian How

49

They’re onto us

There is no doubt that ratings agencies are on the nose. And it is probable that today’s Moody’s downgrade of the big four banks will be interpreted tomorrow by the broader media as a petulant and late attempt to recapture some lost credibility by picking on our perfect banks. Besides that, a one notch downgrade

21

Moody’s cuts bank ratings

From the SMH: Moody’s downgrades ratings for big four banks Chris Zappone May 18, 2011 – 3:52PM .Moody’s Investors Service has downgraded the debt ratings of Australia’s big four banks from Aa2 to Aa1, citing their relatively high reliance on wholesale funding. Moody’s gave the banks – Commonwealth, NAB, ANZ and Westpac – a stable

40

Parko poses conundrum for self

Martin Parkinson, the new Secretary of the Treasury, gave an excellent speech last night. Gone was the uber-bullishness on China and India that has characterised Treasury rhetoric since the GFC and it was replaced with a recognition that we’re in for cycles in China and at times, it’ll be painful. The Australian covered these things well enough.

3

Fund managers rotate

  There are growing signs of pessimism amongst fund managers globally, a point that has already been well covered on MacroBusiness. How is this affecting trading strategies and asset allocations? Merrill Lynch’s May fund managers survey sheds some light. It says that investors are questionnig global growth prospects. Only 10% expect stronger global growth in

6

Labour prices kybosh June

Tomorrow we get the release of the AWOTE measure of wages which is widely known and probably more commonly watched than today’s wage cost index which was just released. The WCI is a little more obscure so it probably worth explaining what the ABS says it measures: The wage, non-wage and labour price indexes measure

0

Trading Day – 18th May

The S&P/ASX 200 is up over 20 points at midday, slowing down amidst a correction that began in early April (down over 7% or 250 points). Asian markets are all up, the Nikkei 0.6%, the Hang Seng 0.29% and Singapore steady. The AUD is up slightly to 1.0609 against the USD, whilst gold is falling

19

Consumers give up on future

A day after the most hawkish RBA Minutes that anyone can remember, Westpac’s Consumer Confidence is only going the other way: The fall for May was moderate but it’s now a major downtrend. Not to mention the expectations component, which is falling off a cliff.  Can the RBA really be thinking of hiking in this environment? The

14

Having a good crisis

Recently I argued that the Australian economy is much closer to the US economy than we give ourselves credit for. One half of it at least is, the slow half (or should I say three-quarters): In the slow halves of the two economies, housing and services, the US is deflating much of its debt and

21

Hats off to a true banker

It takes courage and conviction to speak-out against the interests that employ you. Doing so can cause ridicule from peers and risks damaging one’s career prospects. So when Joseph Healy, business banking head of National Australia Bank (NAB), last year spoke-out against the Australian banks’ bias toward housing lending, I was suitably impressed. Here’s an

18

China not slowing enough

The People’s Bank of China has raised interest rates and reserve requirement ratios a number of times since last year as the government pledged to make inflation fighting and property price curbing their top priority.  So far, the two main objectives have not been achieved.  However, the effect of tightening has been increasingly visible. For

4

Chinese inflation spreading

Exclusively from Michael Pettis’ newsletter: Quite a lot of data came in this week as I was recovering from the jet lag generated by last week’s trip to the US, and for good measure, the PBoC then raised minimum reserve requirements Thursday evening. I don’t have much to say about the hike, beyond what will

7

May 18 links: Slowing

Rocket: grains Up: Aussie, CRB, Euro Downish: $US, gold, energy, ore The next crisis. FT China’s central bank is done tightening. FT US industrial production stalls. Calculated Risk US housing starts fading. Calculated Risk More signs of slowing world. The Economist Rates up despite board concern. The Oz

28

Radioactive Paladin

  If there is a one way bet in the world economy, it is energy. Each year, China adds the equivalent of Britain’s entire annual energy supply and there is little sign of this slowing. So uranium should, as they say, be “part of the mix”. Which should mean that Paladin remains a nice little

2

Trading Day – 17th May

The S&P/ASX 200 is steady this afternoon, pausing in the second leg of a correction that began in early April (down over 7% or 300 points). Asian markets are also down, the Nikkei down 0.44%, the Hang Seng 0.45% and Singapore 0.86%. The AUD is up slightly to 1.0562 against the USD, whilst gold is

50

RBA’s hawkish minutes

Damn, looks like the RBA was setting up for a June hike: The main economic news over the preceding month had been the release of the CPI, which increased by 1.6 per cent in the March quarter, with the year-ended rate of inflation rising to 3.3 per cent. The March quarter outcome had been boosted by large

10

Lending finance solid

The ABS has released March Lending Finance. It shows strengthening business lending and stabilisation in conmsumer lending after three months of heavy falls: MARCH KEY POINTS MARCH 2011 COMPARED WITH FEBRUARY 2011: HOUSING FINANCE FOR OWNER OCCUPATION The total value of owner occupied housing commitments excluding alterations and additions fell 1.7% in trend terms and

22

News Ltd turns bearish

As Houses and Holes points out this morning, jawboning the RBA is an increasing past time. But not even my august blogging companion fathomed how suddenly widespread it has become. And it seems the shift is being driven by the Murdoch Press. A few months ago News limited’s Courier Mail would happily produce articles like this:

41

Structure or cycle in housing?

Michael Yardney is a prominent property investor/advisor who writes a regular blog on Smart Company. Last week, Mr Yardney posted an article entitled What history can teach us about what’s ahead for property, which is aimed at calming nerves about the Australian housing market and convincing readers that residential housing is still a superior long-term

65

The carbon Budget

One of last week’s hot political issues was whether or not the budget would include the carbon price. Today’s blog looks at what the budget would have looked like if it included the carbon price. REVENUE The starting point is to recognise that the creation of a carbon scheme creates a new set of assets.

23

Gasbagging a US default

Last night the US Government hit its debt ceiling of  US 14.3 TRILLION. Yes that’s trillion with a T and while there is little wonder that there is a debate about the raising of this ceiling in an environment where the sustainability of fiscal positions is being questioned all around the world. I wonder why

26

Jawboning is the new black

Regular readers will know that I have little time for the complaints of vested interests. But, one can’t help noticing just how many are out there talking down their circumstances just now. Don’t get me wrong, MacroBusiness has led the nation’s understanding of the economies’ current travails, and there are losers, contrary to the post-GFC