Contagion heads to France

After 4 days of politicking Greece finally has a new short term leader: Greece named former European Central Bank vice-president Lucas Papademos on Thursday to head a crisis government, ending a chaotic search for a leader to save the country from default, bankruptcy and an exit from the euro zone. A somber Papademos called on Greeks

Latest posts


Expect the revolution to grow

Back in May, former Reserve Bank of New Zealand advisor and multiple CEO, Terry “Macca” McFadgen, wrote a guest post on MacroBusiness entitled: Will Aussie housing go bust?. He then followed up in August with Big trouble ahead. Now Terry is back with another serving of ‘Maccanomics’. In this installment, Terry provides a sobering assessment


Fat bonuses don’t work

We’ve heard quite a bit about the new ‘two-strikes’ rule on executive pay in the media since an amendment to the Corporations Act, to toughen executive remuneration conditions, was passed in July.  This amendment was the outcome of a Productivity Commission inquiry into executive remuneration released in January this year. While more accountability to shareholders


Deconstructing China’s trade data

The General Administration of Custom of China published the latest set of trade figures yesterday.  First, on a month-on-month basis, both exports and imports fell.  Exports fell by 7.2% in October on a non-seasonally adjusted basis, or –1.4% on a seasonally adjusted basis, while imports fell by 9.5% on a non-seasonally adjusted basis, or +3.2% on


November 11 links: Orel good

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


Trading Day

The S&P/ASX 200 Index closed down 102 points or 2.4% lower to 4244 points today, reacting to Italian bond dramas overnight. In after hours trading, the index has fallen another 10 points, with Euro and US markets are pointing to slightly lower opens. Asian markets had a bad day, with Japan’s Nikkei 225 down nearly


Consumer confidence falls on rate cut

This afternoon, Roy Morgan released its first consumer confidence survey since last week’s rate cut and it shows a small deterioration. Obviously much of the gain transpired in advance. Will be interesting to watch as Europe descends: Consumer Confidence was virtually unchanged at 116.4pts, (down 0.4pts in a week) according to the Roy Morgan Consumer


The mining boom is over

There is something of a revolution brewing in Australian economic thinking just now. It began several months ago when the RBA suddenly stopped talking about inflation and started considering stimulus. The change of heart is that the minnig boom is not delivering the kind of inflationary blowoff growth that everyone outside of MB and the


Is Myer a buy?

The fate of the big retailers is very much a pointer towards the health of the economy — and vice verca. A number of analysts are looking at Myer which is providing a read on both the economy and the underlying state of the stock market. The picture is for the most part pretty neutral,


AFG vs O/O housing finance

As H&H  mentioned,  the ABS updated housing finance data yesterday. The dataset that was updated is the ABS 5609 which contains the breakdown of housing finance for owner occupiers. In order to get the full picture, including the breakdown of investor financing, we need to wait for the ABS 5671 dataset, but it will not be updated until


Chart of the Day: S&P500 and Goldman

Continuining again our focus on the US S&P500 stock index, today’s chart come from Goldman Sachs (via Zero Hedge): This chart says a 1000 words, but for those not sure what’s going on, its seems the ca. 1.5% cut to US GDP coming next year (courtesy of austerity), has been priced in the consensus forward


Unemployment steady

Looks like I got a bit ahead of the market earlier in the week. No evidence yet of a further weakening in the labour market, even if the various marginal indicators are showing it. Unemployment was stable at 5.2%, with 20k full time jobs created and 10k part time lost.  Here’s the details from the


How safe is your super?

As the Great Moderation passes by and the Great Volatility takes its place, the investing world is glacially facing up to the fact that a return OF your money is just as important as a return ON your money. The past 30 years have allowed all and sundry to “fuggedaboutit” or “she’ll be right mate”


Food, glorious food

RBA Assistant Governor, Phil Lowe, is on hustings this morning making a speech about the prospects for Australian food exports. Without putting too much of a dampener on it, when I used to produce The Diplomat’s Global 100, a list of Australia’s top 100 international firms, agriculture was grossly under-represented, simply because we have long


Australian dollar on the ropes

The Australian dollar is under intense pressure from an unfriendly world which looks to be building into a perfect storm for the world’s bellwether growth currency. It has sold down through the support I talked about earlier in the week and remains biased lower. As you can see in the chart below, it is at a critical 


Out of time in Italy

Not a good night for Europe. Italy had breached “containable” levels of yields on its government debt even with the ECB buying. Italian bonds reached an all time euro-high of  7.41% for the 10-year (+69bp).  The spread over German bunds hit a new all-time high of 565bp. Although it has been obvious for some time that


Inside the brain trust

With markets so volatile and the European situation in the headlines every day it is hard to pull your eyes away from the screens and think about the bigger picture. At the Overseas Terminal down at Circular Quay on Tuesday however Westpac did just that. For a select audience of around 250 clients the institutional


Captain Parko: All ahead dirt!

Yesterday, Secretary of the Treasury, Martin Parkinson, gave another in a series of speeches that seem designed to give Australia no choices in its current trajectory towards the world’s largest quarry. This is a long speech and I can’t address it all but will take what appears to be its main purpose: trashing any idea


Honey, I shrunk the mortgage

Some interesting analysis from Commsec (h/t auhousingcrash), confirming the thoughts of H&H last week: The average loan size plunged 1.9 per cent in September, highlighting the drop in home prices and greater influence of buying activity at the lower end of the market. The average home loan is now 0.6 per cent smaller than a


Can China control its descent?

Inflation in China continues to moderate.  The latest data from the National Bureau of Statistics shows that headline consumer price index (CPI) inflation has fallen from 6.1% yoy in September to 5.5% yoy in October, in-line with the consensus.  On a month-on-month basis, headline inflation in October was 0.1% vs. 0.5% in September.  Food prices is


Urban sprawl greenhouse myths

The Property Council of Australia (PCA) is one of those lobby groups with a blatant disregard of the facts and a history of political influence – the kind you love to hate.  For example, the PCA made a submission to the Queensland government outlining how planning laws that promote densification are likely to increase greenhouse gas emissions


November 10 links: Rome burns

Rocket: ore (up 6.4%, swaps up 0.5% – Chinese inflation number?) Up: $US, Treasuries, energy Mixed:  grains, metals, euro, Aussie, gold, CRB 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


Trading Day

The S&P/ASX 200 Index closed up 52 points or 1.2% higher to 4346 points today, probably on the back of the news that we had seen the back of Italian Prime Minister Silvio Berlusconi. In after hours trading, the index has given back some of these gains and is down 15 points, with Euro and


Bankruptcies jump above GFC

ASIC released September quarter bankruptcy data today and despite what Fairfax’s cheerleader in chief would have think, company bust number surged past GFC levels: Mr Adrian Brown, ASIC’s Senior Executive Leader of Insolvency Practitioners, said that each month of the September quarter saw a consistently high number of appointments, notwithstanding a decrease from August (1049)


The magic of a rate cut!

So, Consumer Confidence has a bounce on the rate cut, increasing 6.3% in November to 103.4% from 97.2 in October. Here’s the chart for month on month: Aaaaaand, year on year: According to all sane prognosticator’s hero of the moment, Westpac’s Chief Economist, Bill Evans: This result is around our expectations and is clearly driven by the


Buy cyclicals?

What is the best equity strategy in such an uncertain environment? Much depends, of course, on the investor’s time horizon. In the short term, with such jumpy markets, reading the signals, especially in relation to Europe’s woes, seems suitable. But of course, volatility creates many risks. In the medium to longer term, it is likely


Sydney investors drive housing finance

ABS Housing Finance for Spetember is out and shows some recovery in the headline numbers: SEPTEMBER KEY POINTS VALUE OF DWELLING COMMITMENTS September 2011 compared with August 2011: The trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 0.9%. Investment housing commitments rose 1.0% and owner occupied housing commitments


Peter Costello confesses

There is a terrific piece of rhetoric from Peter Costello today at Fairfax. It is a must read in terms of historical revisionism and politicking: Imagine an investment portfolio – say your superannuation fund – which has a whole bunch of assets that are going sideways and one prime asset that is growing strongly. Imagine


Europe reaches its bogus goal

There is one thing you can say about Europe, they never waste a crisis, the side show soap opera spectacular continued last night.  It has been going on for so long now that the market seems to have set itself false goals and then managed to convince itself that they equate to something important when


Unemployment looks set to jump

Tomorrow the ABS releases its October Labour Force survey and the chances are growing that we’ll see a jump in unemployment.  The August report wasn’t bad, with the unemployment rate falling from from 5.2862044% to 5.2477873%. But despite the decent month, the trend for unemployment is firmly up: Another measure that appears to have crossed an