Will the RBA crash housing?

Well, I was right about one thing after the RBA meeting this week. There was something for everyone and the debate will rage! We had a dovish statement Tuesday and now a hawkish one today. Following this morning’s RBA SoMP, Adam Carr is back claiming victory: At the very least we know they are closer to my view

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Trading Day – 6th May

The S&P/ASX 200 is down but slowly recovering at 4740 points after last nights shock fall in commodity markets (oil down 10% alone, AUD/USD down to 1.05) Short term price action resembles a decelerating downtrend (note red curve under low points in last week on chart below). The index (XJO) is hovering above its 260


RBA Statement: rate rises ahead

The RBA’s quarterly Statement on Monetary Policy (SoMP) is just out. It is a big document, full of thoughts and views. But there is one key table and one key set of outcomes that really drive any interpretation of what they are saying. That is, where do they think GDP and inflation are going to


Pettis warns Canberra

Exclusively from Michael Pettis newsletter comes another warning for Canberra’s boundless China faith. Since January I’ve been writing about – and trying to figure out – the strange happenings in the Chinese copper market. The issue has been a regular topic of conversation in my central banking seminar at Peking University, where much of the


To beer fridge or not to beer fridge

Mark Latham posed a question in his Op Ed to the Australian Financial Review yesterday which bears thinking about. It was this: “How can the Greens support Labor’s policy of overcompensating consumers for the financial impact of a carbon tax, knowing that more money for carbon-hungry households means more emissions?” Maybe the Greens reckon the


Sell in May – a repeat of 2010?

Regular readers may remember that each morning I peruse my bearish sounding “Crashlist” before starting the day trading the Australian equity markets. This list comprises the major currencies crosses, indices, gold, 10 year US T-Note and the US Dollar Index. A well deserved dip in “risk” markets across the world has been transpiring for most


Charlene trashes the tardis

The bogan is a voracious consumer of media. It will, on any given day, access any or all of a variety of newspapers and news sites ranging from the Herald Sun to the Daily Telegraph and occasionally the Courier Mail. On the days it’s feeling like pretending it knows something about economics or politics, it


Milk money (QE3)

That was no ordinary night. The $US doesn’t bounce 2% without some serious spur. And the entire commodities complex (CRB) down 3.5%! This is a similar signal to the flash crash of last year, which presaged the sell off into the double-dip funk of mid last year. Here we have the first signal of the triple-dip


Links May 6: Stall and fall

Up: $US  Down: Gold, energy, grains Falling: Aussie  Silver down 20% in week and oil collapsing BBC, Bloomberg US initial jobless claims sharply higher CalcRick US housing double dips CalcRisk ECB holds on rates Bloomberg These two pay the price: Greece, Portugal as Portugal heads for recession BBC , 2 years pfft !! ESRB needs to audit Greek


The 1980s Texas housing bubble myth

Over the past few months, I have argued feverishly that housing markets with responsive land supply are both more affordable and less prone to bubbles/busts than markets where land supply is constrained by physical and/or regulatory barriers. In many of these articles, I have used Texas as an example of a housing market largely free


Hating Telstra

The market’s scepticism about Telstra is one of the most sustained negative critiques of a big Australian corporate yet seen. It makes an interesting comparison to the euphoria about telcos in the first half of last decade. The scepticism may be partly attributable to the after effects of that era. The stock is on a


We’re in The Monthly

A few months ago the Unconventional Economist and I were interviewed by Christine Kenneally a freelance journalist who has written for Time,  The New Yorker, The New York Times, Slate and New Scientist, as well as other publications. In this case she was writing an article to appear in the May issue of the Monthly magazine.


Trading Day – 5th May

The S&P/ASX 200 is steady at 4740 points with some intra-day buying support. Telstra is adding weight to the market, rallying up 1.4%. Retail sales figures surprised the unsurprisable economists, which has weighed slightly on retail stocks. The index (XJO) is dicing with its 200 day moving average (a closely watched indicator) and is still


Retail sales unsurprisingly poor

Those poor bullhawks.  That strange creature – half housing bull, half rate hawk – must be having a few doubts. Personal crises even. Retail sales for March are in and look, well, crapola. First from the ABS itself: I will add that on a monthly basis there were a few eye-opening falls for different segments. Department stores


Noosa continues to “Keen it”

How do you lose $160,000 over 15 years? Buy a Noosa apartment. Savagely discounted prices fetched by receivers for apartments previously owned by former Sunshine Coast tourism boss Phillip Harding has sent shock waves through Noosa with some estimating the state of the market is now as bad as the Gold Coast. Over the past


NAB looks solid

The big 4 banks reporting season rolls on, as NAB released its 2011 Interim Results today. Below is a brief summary of the key figures along with select graphs taken from the NAB presentation. Profit Compared to the March 2011 HY results, NPAT was up 16% to $2.43 billion and cash earnings increased 22%, with


US triple-dipping

Last week’s GDP figures in the US confirmed the momentum in the US economy’s recovery is slowing as the impetus from stimulus packages and government largesse fades and the true pulse of the economy becomes evident. This trend appears set to continue if last night’s report on the non-manufacturing sector from the Institute of Supply


The BlueScope blues

Like ships passing through the night, the discussion on emission-intensive trade-exposed (EITE) industries seems to involve two separate conversations. One where those industries most affected (eg steel, aluminium, cement) talk about earnings impacts and job losses. And the other involving policy makers, equity analysts and NGOs questioning whether the impact would be quite so bad.


Gold: This Time is Different

Asset markets are effectively all the same: housing, shares, commodities, FX, precious metals, pork bellies and interest rates. They are all markets for speculators to trade, investors to get a return of and on their money and sheep to think they can buy and hold (or negative gear) forever. As I’ve said before, gold in


Links May 5: Sloooooooowing

Down: Gold, energy, grains, $US  Falling: Aussie  Analysis Bloomberg European bonds improving: Greece, Portugal,  Spain, Italy, Belgium Portugal accepts bailout Reuters 12 Billion Euro for banks CNN Debt crisis sill lingers TheOz Service industry activity in US expand more slowly Bloomberg US Treasury suggests nother $2 Trillion in Debt required Reuters Oil down on stockpiles Reuters Get ready for a global showdown


The century of old age

As mentioned previously, the 21st century will be the century of old age, where declining birth rates meet longer life expectancies. This ageing of the population will affect many areas of the international economy, from consumption and growth to asset valuations. The impacts from ageing will likely be most acute in Western Nations, although some developing countries, most


April car sales down 4.5%

Adam Carr won’t be happy. He’s relied on growing car sales in part to rationalise his intense campaign for rate hikes. Westpac has just released a note on the April sales figures from the Federal Chamber of Automotive Industries and it’s into reverse I’m afraid: Westpac Economic update Australia: new vehicle sales down 4.5% in


It begins

It was only a matter of time. UBS let the warning out to investors this morning. Arrears rose alarmingly. Early warning sign for consumers? ANZ’s arrears levels have risen sharply. Since September its >30 days arrears have risen 41% to $5.8b, while >90 days are up 26% to $2b. We believe higher arrears are heavily


Australian dollar top is in

On Monday I posted a technical piece saying the the Australian Dollar had hit resistance and so far it appears that the 1.1014 level has proved to be the ceiling that I thought it was going to be. It was tested on two distinctly seperate occasions on Monday Sydney time and then again in New York


Trading Day

The S&P/ASX 200 is down almost 1% to 4755 points from a 4971 point high on the 11th April, a 4.3% total loss in the current dip. Momentum and other technical indicators continue to be very negative. The small short-lived Easter rally looks like being the “dead cat bounce” as part of an overall correction


Iron fist

The future of Australia’s coal exports look pretty assured. The International Energy Agency is forecasting that the growth between now and 2035 in China’s energy production will equal America’s, Europe’s and Japan’s current energy usage . Despite China’s falling carbon intensity, much of the expansion this will still come from coal. As I noted in


Westpac “boring”

WBC released its 2011 Interim Results today. Below is a brief summary of the key figures along with select graphs taken from the broker presentation. Profit Reported Net Profit after Tax (NPAT) was up 14% to $3.961 billion with growth in cash earnings of 8% with all divisions (incl. NZ) experiencing growth. Similarly to ANZ,


An awfully bland miracle

The RBA made reference to the likelihood of a negative print when Q1 GDP is released on the first of June so I thought I would visualise what a negative number. Without positive revisions to previous quarters this would take the annual rate below 2%: While we were the only developed nation to avoid a


Good and evil in interest rates

According to Peter Martin: The Reserve Bank believes inflation has bottomed and it will soon have to lift interest rates, possibly even next month. The bank’s change of heart emerged during a three-hour board meeting yesterday that resolved to leave the cash rate steady at 4.75per cent but to be prepared to lift it without


May 4 links: Rate rage

Down: metals,  energy, Aussie Flat: $US, grains Osama victim of Arab revolt. Asia Times Gross backs emerging markets on inflation concern for US. MarketBeat Seems backwards to me… Who pays for Greece? Business Insider China is big. MarketWatch US ISM strong. Calculated Risk But growth is not good. Tim Duy Adani buys coal port. FT RBA will lift. Peter Martin,