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Equities Spotlight: Virgin Blue Holdings Ltd

This week’s equities spotlight almost didn’t happen thanks to Qantas, but luckily my wife had the foresight (luck) to book the home leg of our Newcastle-Brisbane trip with Jetstar.  Nonetheless, Brisbane Airport was not a happy place to walk through on Sunday evening – the expressions of people milling around the lounge bars were rather

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November 2 links: Risky risk

Up: $US, Treasuries, ore Down: grains, metals, gold, CCI Smashed: euro, Aussie, energy 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

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Trading Day

The S&P/ASX 200 Index closed down 65 points or 1.5% lower to 4232 points after shrugging of the rate cut announced by the RBA. In after hours trading, the index is down another 5 points, with Euro and US markets pointing to similar losses. Asian markets experienced similar losses, with Japan’s Nikkei 225 down 1.45%

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Bill Evans take a bow

Below find three rate takes by banks, led off by the triumphant but humble Bill Evans who, I am unashamed to say, we supported with our full resources in July when he predicted this outcome and was jeered as a “nancy boy”. Westpac sees no follow up move until next year. Find also ANZ, which

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Chart of the Day: Commodity price index

The Reserve Bank of Australia (RBA) just released the preliminary estimates for October’s commodity price index: …the index fell by 3.9 per cent (on a monthly average basis) in SDR terms, after falling by 1.4 per cent in September (revised). The largest contributors to the fall in October were declines in the estimated export prices

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So begins a rate cut cycle

The RBA today signaled the start of an easing cycle, not simply a one off move in the cash rate.  The rhetoric that they used was heavily slanted toward the risks associated with the current economic outlook with only a passing glance at the once dominant mining engine. Equally, as you can see in the

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How fast are house prices falling?

Slow melt, slippery slope or touching bottom? Can’t decide ? Maybe the ABS can help with today’s capital city house price index: ESTABLISHED HOUSE PRICES Quarterly Changes Preliminary estimates show the price index for established houses for the weighted average of the eight capital cities decreased 1.2% in the September quarter 2011. The capital city

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The cut we had to have

So, it’s 10 and 0 for MB as the RBA does the right thing and wields the machete. Here is the statement: Statement by Glenn Stevens, Governor: Monetary Policy Decision At its meeting today, the Board decided to lower the cash rate by 25 basis points to 4.5 per cent, effective 2 November 2011. Recent information is

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North Asian PMIs disappoint

China’s October PMI has printed at 51, up from 49.9 in September: October data signalled a stronger expansion of manufacturing output in China, as overall new business rose for the first time in three months. Renewed growth of new export orders was also signalled, while companies raised their purchasing at the fastest rate since March.

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Australian austerity

If you  accept the premise that the growth in debt played a large role in the economic outcomes for the Australian economy in the past 20 years, as I do, then the current environment where we see a distinct lack of demand for debt must then have some impact on Australian growth. At least I

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Dollar down, manufacturing up

In what has to pass as good news for Australian manufacturing these days, its ongoing recession slowed in October, according to today’s PMI: The decline in manufacturing activity continued in October, albeit at a slower pace. The seasonally adjusted Australian Industry Group-PwC rose 5.1 points to 47.4. (Readings below 50 indicate a contraction in activity

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New home sales clobbered

There may have been a recent surge in building approvals, but it sure ain’t happening in sales. After a brief pop in August, September approvals have slumped to another new cycle low. From the HIA: New home sales declined in September with detached house sales posting their lowest monthly level since December 2000, said the

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The Qantas answer

I’m awarding two of yesterday’s comments full publication and acknowledgement on the Qantas question. The first is by Tubemaster, a former aviation insider who nicely captured the competitive pressures at work inside airlines. The second is by regular commenter, Ronin, who makes clear that safety and commercial pressures are a troubling mix. So, the implied

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Is the ECB’s new boss a “printer”

Europe gets a new central bank boss from today and it looks to be a baptism of fire for the new incumbent. Mario Draghi takes over from Jean-Claude Trichet on the day it becomes apparent that the latest attempt to produce a comprehensive plan to save Europe had a half life of 24 hours. Draghi is going

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Iron ore bounces (from a fall it never had)

It had to happen. Iron ore has found a bottom for now. The ore spot price closed yesterday up 1.3% to $118.40. Twelve month swaps are up big for two days and 5.5% yesterday to $127.94. Shanghai rebar is steady at 3640. So, is it over and can we expect a v-shaped recovery? First things

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China will not ease up on realty

Li Daokui, academic advisor and member of the monetary policy committee of the People’s Bank of China, spoke last Saturday on the inflation outlook of China as well as real estate market regulation, according to Xinhua.  Although there has been some noise about easing real estate curbs amid recent aggressive price cutting and subsequent protests, Li Daokui’s view is

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R.P.Data gets bullish (Updated)

As H&H mentioned yesterday, RPData stats are out for September and a glance at the data tells you that the slow melt continues. RPData have taken a bit of a bullish stance on the data, which is in line with their latest newsletter. Here are the numbers: The big markets of Sydney and Melbourne deteriorated slightly

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Bad regulation

MB has hosted many debates around cultural differences between countries and groups of people. But I’ve never understood what the writers are referring to when they use the term cultural to explain economic differences between, say, countries. As research certainly supports the notion that with a given set of choices generally we act alike. In

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The madness of asking China for money

I am seriously wondering why people think that China bailing out the Eurozone is a good thing.  China has large foreign exchange reserves because of its trade and exchange rate policy, which allow it to run trade surpluses year after year, together with capital inflow, they force its central bank to create Chinese yuan to purchase

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Irwinomics confronts mining

At Australia Zoo (I had a lovely time there on the weekend, thanks for asking) there are numerous signs posted to encourage visitors not to buy native animal products – crocodile, emu, and kangaroo meat for example.  I found this very odd, as crocodile and emu are farmed, and most kangaroo species are not endangered

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November 1 links: Greek vote

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

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Trading Day

The S&P/ASX 200 Index closed 55 points or 1.3% lower to 4298 points after popping above positive territory at lunch. In after hours trading, the index is down another 15 points, with Euro and US markets pointing to similar losses. Asian markets experienced similar losses, with Japan’s Nikkei 225 down 0.16% at 9036 points, the

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Australian dollar falling fast

The Australian dollar has fallen faster than I anticipated when I wrote this morning’s weekly update. Indeed it has already crashed through two of the support levels I identified in this mornings piece. The concerns over MF Global and the massive MOF intervention into USD/JPY which has pushed the Yen 5% lower have certainly accelerated the pace of declines.

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Measuring ‘hot deposits’

APRA released its monthly banking statistics today and the recent spike in ADI deposit growth appears to be waning with September deposits growing $12 billion versus the peak in August at $27 billion. Here is a table of this year’s totals and growth rates: Obviously the bounce is correlated with stock market volatility and Eurozone

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Brokers find hope

Brokers are almost always biased towards buy recommendations because it is the best way to get, well, brokerage. But with the market at such depressed levels, it is probably not an overly bad call. Goldman Sachs, which thinks there is some hope that Europe is being sorted, is looking for multiples to be higher and

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House price falls continue

We’ll have much more later today on the R.P.Data September results, but for the time being home prices fell a seasonally adjusted 0.2 per cent in September after falling a 0.4 per cent in August. Here is a chart of the raw data monthly fall: And seasonally adjusted:

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Australian dollar set to fall

The key to understanding the near term fate of the Australian dollar is that the back end of October has been the polar opposite of the early days of the month. Pessimistic crescendo followed by supreme optimism. The truth is neither emotion is helpful or right, which is why we have a consistent process we

0

TD Inflation benign

The TD Securities – Melbourne Institute Monthly Inflation Gauge is out and rose by 0.1 per cent in October, following a 0.1 per cent rise in September. In the twelve months to October, the inflation gauge rose by 2.6 per cent, following the 2.8 per cent rise over the twelve months to September. According to the release: Contributing

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Credit growth little changed

RBA credit aggregates for September are out and show an ongoing flat trend of low credit growth in housing, personal and business credit: Total credit provided to the private sector by financial intermediaries rose by 0.5 per cent over September 2011, after rising by 0.2 per cent over August. Over the year to September, total

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Fearful Symmetry sees India risking a hard landing

Fearful Symmetry was disappointed that the RBI saw fit to raise interest rates at its mid-quarter review on September 16. He moved beyond disappointment into the realms of despair when the Bank raised rates again in October. The tone of the accompanying statement echoes that of September and shows a similar lack of regard for the potential vulnerability of