Origin joins the big league

Origin Energy is getting a lot of attention from analysts after the company announced it was starting a sale process for a $1 billion-plus stake in its $23 billion Queensland liquefied natural gas project. The company has also given the green light for a second production unit. It will offset the dilutive impact of a $1 billion

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China’s realty sales rocket

Courtesy of Also Sprach Analyst. I have noted before that towards the end of May the Chinese government gave up on rebalancing the economy and started reflating the real estate market.  Although the central government as well as the central bank have repeatedly denied that they have given up, the reality is that they have, especially at the local


Europe’s crisis is re-emerging

As I ‘ve been saying over the last few days, last week’s EU summit provided Europe with some political success but actual deliverables are some time off. According to the Finnish PM at least a year. There is already rumbling from a number of countries, including Germany, about what exactly was and wasn’t decided last Friday


Exports to China hit record high

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released trade data for the month of May, which has recorded a monthly trade deficit of -$285 million, up from -$26 million in April (revised down from a previously reported -$203 million). March’s deficit was also revised down to -$1,004 million from a


The sticky questions in yuan convertibility

The AFR has a bunch of stories celebrating what appears to be an imminent deal between Australia and China to enjoy direct currency convertibility: Australia is positioning itself to become the third country allowed to directly convert its currency to the yuan, a move that would lower transaction costs for Australian miners and importers. Treasurer Wayne Swan


China links

Courtesy of Sinocism Happy Fourth of July to my American readers. Condolences to my British ones… Preparing for Financial Turbulence – Caixin Online why would China let the market handle the recovery when the allegedly capitalist US and Europe are not letting the market handle the recovery? // To address problems facing the economy, the


Is Provident Capital a canary?

From Banking Day today: The Federal Court late on Tuesday confirmed the appointment of Philip Carter, Tony Sims and Marcus Ayres from PBB Advisory as receivers of Provident Capital, a Sydney-based finance company. The court had stayed orders first made late last week to allow the company time to appeal. Bendigo and Adelaide Bank, a


Macro Investor: The great property investor overhang

By Leith van Onselen. If there is one thing that separates the Australian housing market from most others, it’s the propensity for investors to leverage into buy-to-let properties in the face of negative income returns, in the expectation that capital appreciation will repay debt and interest. ‘Negative gearing’, as it is known in Australia, is


MacroBusiness Morning

Markets take a break with the US out, await ECB tonight. While the United States celebrated its 236th birthday, markets in Europe were under pressure from some more grim economic news which continues to paint a picture of a slow growth future and most probably a looming European recession. The Eurozone PMI’s were released overnight


China is not different

Exclusively from Michael Pettis’ newsletter. We are beginning to see an increasing reluctance to respond to evidence of bubble-like behavior in China with explanations of how these things don’t mean the same thing in China as they do in other countries.  Our normal understanding of economics doesn’t apply to China, we are earnestly told by the


The LIBOR scandal will expose more naked bankers

Some time ago I worked as a short term interest rate trader. Essentially I took bets on the movements in interest rates out to 1 year. I did this using a portfolio of bank bills, NCD’s (negotiable certificates of deposits), PN’s (promissory notes), Futures (bets on the level of interest rate at some time in


Global slowing to hit markets

ANZ released a very good macro strategy note late yesterday arguing that the global slowdown has some ways to run and markets face stiff headwinds. I recommend a read. Here’ the conclusion: Our lead indicators suggest that the weakness in the manufacturing PMIs (and thus overall growth) will extend through to at least Q3 2012. Moreover, we expect


SQM stock on market release

By Leith van Onselen Following on from yesterday’s post on Melbourne’s record glut of unsold homes, please find below SQM Research’s press release assessing the stock on market as at June 2012. Figures released this week by property research house SQM Research reveal that the level of residential stock increased during the month of June


5th July Links: ECB watch

Global Macro: Interest rate cut on the cards at ECB FT Bob Diamond questioned by MPs on Barclays Libor scandal  The Gaurdian A step at last in the right direction Martin Wolf Only a lunatic would join the EU: Swiss minister TheLocal Eurozone retail sales edge up but trend still weak BBC United States: How Stockton went


ASX Shares Daily – 4th July

  By Chris Becker These daily updates need to be placed in context with the longer trends and drivers amidst the overall technical picture, so head to Macro Investor for a free trial. Former “Trading Week” readers will find it reborn as “Technicals“, published 8am each Monday morning.   Well today at least is 4th of July,


Still petrol in the RBA’s tank

Today’s retail results speak for themselves, from Westpac: Retail sales posted a solid 0.5% gain in May, slightly better than the 0.2% gain expected. April’s 0.2% drip was revised up to a 0.1% uptick and March’s 1.1% jump was marked down to a 0.9% gain, smoothing the recent monthly pattern of spending but leaving in


The ECB turns the screw on EZ governments

Sorry for the lateness and shortness of today’s post, I’m not feeling the best. There was little economic news from Europe overnight due to the media concentration on the LIBOR scandal. Of note were the continuing rumblings from Finland around collateral and obligations. As I mentioned yesterday in morning links, Finland appears to be once again struggling with exactly what it


Retail sales defy European gloom

By Leith van Onselen The Australian Bureau of Statistics (ABS) this morning released the retail trade data for the month of May, which registered a solid bounce in retail sales that beat analyst’s expectations. In seasonally adjusted terms, retail sales rose by 0.5% in the month of May and by 3.5% year-on-year – just ahead


China links

Courtesy of Sinocism Residents of Shifang, Sichuan who violently protested against a new copper and molybdenum factory appear to have won the first round, as the local government has suspended construction. But do not expect things to end well for the leaders of the demonstrations. Han Han wrote an excellent post on the Shifang situation (什邡的释放 ), which China Digital Times has


PSI recovers some more

The AIG Performance of Services Index is out and: …increased by 5.3 points in June to 48.8. It remains  just below the 50 point level separating expansion from contraction. The Australian PSI® shows some encouraging signs that significant  parts of the services sector are starting to stabilise after the sharp  falls in activity seen so far


A distracted dragon

By Michael Feller In the weeks since last writing (see Running with the China bears)  I’ve been busy working on Macro Investor, the free trial of which I hope you sign up for. But I’ve also been keeping one eye on the macroeconomic forces that continue to shape the landscape in which we invest. And


MacroBusiness Morning

The rally extends, markets up on hope of more central bank stimulus While there was plenty of headlines about the enduring Barclays Libor scandal and the resignations in the executive suite (CEO and COO), markets were mostly higher overnight on the back of a growing expectation that economic data is now weak enough to require


Deposit rates come down more than loan rates

From Banking Day: Financial institutions have cut their deposit rates more than their loan rates over the past two months. The latest Reserve Bank indicator lending rates, published yesterday, show that standard variable mortgage rates fell by an average of 35 basis points in May and 20 basis points in June. Lenders in the RBA


Could gold hit $6000?

Find below a Bloomberg video in which an analyst of some sort claims gold could go to $6,000. Regular readers will know that I have been a long term believer in the gold bull market (indeed, MB itself is to some extent the result of my gold investment) but I take such predictions with a


Chinese bank lending weak in June

Courtesy of Also Sprach Analyst. Last month, I noted that demand for credit at big 4 Chinese banks remained weak while deposits fell.  That has been the recurring theme for the Chinese banking system in recent months as the economy slowed and entered into a debt deflationary environment.  I did stress, however, that Chinese banks are policy driven, thus lending can