Greece dials in hope

The world now waits to see what the Troika has to say about Greece, at this stage it is anyone’s guess: Greece said in a conference call tonight between Minister of Finance Evangelos Venizelos and high representatives of the European Central Bank, European Commission and International Monetary Fund “a productive and substantive discussion took place.” Tomorrow morning, the teams

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London house prices surge on chaos

From Bloomberg yesterday came the below report stating that house prices in London surged in September after falling the previous month: London home sellers raised asking prices by the most in seven months in September as a lack of properties for sale and investors looking for safer assets amid financial-market turmoil bolstered values, Rightmove Plc


The housing production line

As regular readers would know, the debate continues about the role of planning regulations on housing supply and the resulting price implications.  Yesterday our favourite Unconventional Economist elaborated his views in an exploration of town planning and the UK housing market, so I feel it is an opportune time to elaborate the opposing argument – why the


September 20 links: European panic rising

Down: , gold, metals, grains, CCI, Aussie, euro Up: $US, Treasuries 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 Year


Trading Day

The S&P/ASX 200 Index reversed Friday’s gains and closed down 1.6% or 68 points to 4081, possibly on reaction to President Obama’s deficit cuts and tax hike plan. In after hours trading, the market is steady whilst the Euro and US futures point to similar losses. Asian markets experienced similar moves, although the Nikkei 225


Australian dollar weekly wrap

Welcome to this week’s edition of the Australian Dollar weekly wrap and outlook. We’ve moved it to Monday to better sync with trade. The AUD traded down to a low around 1.0180 last week as concerns grew that Europe was going to be unable to get itself sorted and avoid a Greek bailout. The positive


Booting Geithner

Obviously the big news from Europe over the weekend was the exiling of Timaaaayyy! Anyone who has read Andrew Ross Sorkin’s account of the US GFC bailouts, Too big to fail (or seen the movie), will know that Tim Geithner is the ultimate pragmatist. From his position as the head of the New York Federal


Chart of the Day: Decoupled from reason

A meme that is making the rounds is that the growth trajectory of the developed markets (EU, US, Japan etc) don’t matter, as they now make up just under half of total world economic growth, the remaining half filled by the fast growing developing or emerging markets. Therefore, even a slowdown or outright recession can’t


Politico-housing complex goes on tour

There’s nothing like a breath of honesty. From the SMH today: As global investors curb their exposure to Europe’s troubled banks and governments, Australia’s biggest issuers of bonds plan to step up their marketing efforts in a meeting with key US fund managers this week. In the first co-ordinated roadshow of Australian credit market players,


The people want a mining tax

Per Capita is a small progressive thing tank run by former LEK consultant, David Hetherington. Today it released a new study of Australian attitudes towards the tax system. Hetherington says: The Per Capita Tax Survey for 2011 has asked 1,300 Australians for their views on personal tax contributions, overall taxation levels, public service spending and


UK moves to reform planning disaster

I have written previously on how the United Kingdom (UK) housing system is arguably the worst in the world because of a myriad of policies that work to severely restrict supply, pump demand, and make renting a highly undesirable substitute for home ownership. These policies have led to the UK housing market experiencing: 1) a


Lending standards and the CAD curse

Australian banks’ reliance on foreign funding has lead to the alarming situation whereby we (as a nation of households) have borrowed from the rest of the world to buy existing houses from each other at inflated prices.   As I once said it makes me quite frustrated to even suggest that a fair portion of


September 19 links: Fed week

Week ahead of the Dow. Calculated Risk FOMC preview. Calculated Risk Q3 earnings estimates keep falling. Bespoke Five outcomes for Europe. Money Game More Europe disaster porn. FT Europe will monetise. Simon Johnson Charles Darwin vs Adam Smith. NYT How China can really help Europe. Patrick Chovanec Central bank options. Gavyn Davies Parliamentary budget office.


A short history of economics

Bloomberg has recently run a series of excepts from Sylvia Nasar’s forthcoming book, “Grand Pursuit: The Story of Economic Genius,”. All are excellent, pithy and brief and make terrific Sunday reading. Together they constitute a quite useful primer on the schools of economics that we now find caught in the defining struggle of our time. The


Weekend Links: No TALF for Europe

Down: euro, grains Flat: CCI, Aussie, Treasuries Up: $US,  gold, metals Contagion reversing: 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


Trading Day

The S&P/ASX 200 Index closed up 1.9% or 77 points today in a strong session to 4149. In after hours trading, the market is steady whilst the Euro and US futures point to similar gains. Asian markets experienced similar moves, with the Nikkei 225 up 2.25% to 8864 points, whilst the Hang Seng was up


More banks throw in the towel on rates

Yesterday it was NAB pushing out its forecast of rate rises until the end of 2012 (which may as well be forever). Now it’s HSBC. Probably sensibly given the global environment, Paul Bloxham has abandoned giving a forecast at all, telling us simply that the next move in rates will still be up. Reports below:


More on bank funding vulnerability

MB has carried a lively debate this morning on interest rates and the bank’s vulnerability to wholesale funding. The Unconventional Economist quoted from the new RBNZ Financial Stability report to show that the New Zealand central bank is very concerned that markets are signaling that the Australian banks are just as vulnerable as they were


Chart of the Day: War stimulus

A great set of charts today from The Global Issues site (h/t Rumplestatkin) on military spending around the world. Of course, the US leads the way, taking up most of the pie: However, a ten year breakdown of that spending shows that the endless adventures in Iraq and Afghanistan (and Pakistan and…) have added their


Rate cuts are coming

It would be easy to think that Australian interest rate markets and the aggressive RBA cuts that are priced into the curve are just a reflection of some sort of prospective European meltdown. As it stands there is around 150 bps of rate cuts priced into the cash curve and with 3 year swaps sitting


US recession data marches on

Last night’s US data was not reassuring. The two North Eastern Fed manufacturing indices both missed market expectations. The Empire State Index fell further, prices rose and employment dropped, a nasty combination: The Empire State Manufacturing Survey indicates that conditions for New York manufacturers worsened for a fourth consecutive month in September. The general business conditions index


RBNZ throws cold water on RBA

I have noted before the penchant of New Zealand’s regulatory authorities to act as a kind of trans-Tasman conscience for Australian banking authorities. After all, they share the same banking system but are less constrained by any perception of the need to sustain confidence. And yesterday, the Reserve Bank of New Zealand’s (RBNZ) quarterly statement


“Experts” circle wagons to repel Dent

Look, I know the Unconventional Economist has already covered Mr Dent’s visit to Australia and I have to agree with everything he said in that regard. But I feel the need to bring our reader’s attention to the hilarious debacle that was the “expert” Australian response to Mr Dent’s accusations as presented by Koshie on Sunrise yesterday morning. Craig James’s “expert” response: Australia’s population


Europe’s mixed messages

Frau Merkel is certainly sending some mixed messages to the world.  On one hand she says she supports Greece: After several days of market turbulence in the wake of a debate about allowing Greece to default, German Chancellor Angela Merkel has launched a counter attack, arguing that Germany remains committed to the common currency and that the


Australia has Baumol’s disease

Why does the wage of a musician in a string quartet rise over time at roughly the same pace as wages in other areas of the economy, despite the lack of productivity gains in the performance of music? William J Baumol solved this riddle in the 1960s.  His insight, known as Baumol’s cost disease, is


September 16 links: QE gone

Down: $US, gold, metals, grains, Treasuries Flat: CCI, Aussie Up: euro Contagion reversion: 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


No point of intervention for currency

Find below footage of Wayne Swan speaking with Bloomberg this afternoon. His responses include deeply contradictory commitments to a diversified economy and an Australian dollar free to appreciate for ever. Apparently he “would never want to see our economy become too excessively dependent upon one country or one commodity”!?!


Trading Day

The S&P/ASX 200 Index closed up 1.6% or 66 points today to 4071. In after hours trading, the market is steady whilst the Euro and US futures point to similar gains. Asian markets experienced similar moves, with the Nikkei 225 up 1.69% to 8662 points, whilst the Hang Seng was steady at 19073 points. In


Where are the job losses?

The ABS released its detailed quarterly labour force survey data for August today.  Digesting this data takes a little time and it needs to be interpreted alongside the monthly employment data, which has shown an uptick in unemployment in July and August. Since August 2008 the following sectors of the economy have reduced their share


Car sales bounce again (or do they?)

ABS new cars ales are out for August and show a 3.3% jump yoy: TOTAL NEW MOTOR VEHICLE SALES The August 2011 trend estimate (83 720) has increased by 1.3% when compared with July 2011. Seasonally Adjusted – The August 2011 seasonally adjusted estimate for new motor vehicle sales (87 935) increased by 3.3% when