Chris Joye exposes himself

Maybe we are closer to an historic housing bust than this blogger thought. The bulls have entered outright panic. From The Australian: Christopher Joye, an Australian property market bull, yesterday offered US guru Jeremy Grantham a $100 million bet on house prices. Mr Joye, managing director of property research group Rismark International, challenged his equally

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The great Oz RE Casino.

While the adults are trying to have reasoned rational conversation about reducing the systemic risk in the Australian economy and banking system, the children have turned it into a game of “dare”. CHRISTOPHER Joye, an Australian property market bull, yesterday offered US guru Jeremy Grantham a $100 million bet on house prices. Mr Joye, managing


Weekend reading: Son of Wallis Now!

Delusional Economics, Unconventional Economist and this blog demand Wallis Inquiry to address bank’s wholesale funding addiction. Deflating hooters! William PesekQEII versus everyone else. FTFleck vs Biggs on QEII. Zero HedgeCorrelation rocket. EconompicUS pending home sales down. Calculated RiskUS’ improved employment report. Calculated RiskHow many jobs does the US need? Zero HedgeFitch prepares downgrades on ForeclosureGate.


This is gonna hurt

Fellow econblogger, Delusional Economics, has posted an excellent, yet frightening summary of some of the key risks currently facing the Australian financial system, housing market and broader economy. It is captured in an email message from “Deep Throat” – an experienced financial industry participant whom wishes to remain anonymous. Deep Throat has delivered a worrying analysis of the Australian banks’


And the winner is … Michael Pascoe

This blogger would like to congratulate Michael Pascoe. Today he wins the award for the worst ever argument published in the Australian media. For you skeptics, let’s roll the tape… Oh ye of little faith – a little pricing power causes wholesale abandonment of confidence in markets to sort out supposed hubris. So much for


Stage 2 – Damage begins

Stage 1 – Was Panic and Escape. The panic is expected , the escape is logical; but until there is real evidence there is a problem it is still all hearsay. The denial can creep back in, and people can pretend there isn’t really a problem. That is until the damage begins. THE number of


Risk on

The Bernanke Put has pulled up in a tank on the front lawn of Greenspan’s paltry moral hazard. There’s no more pretense that US central banking is about price stability in anything. Indeed, the US has embraced the complete opposite with the FOMC now openly aiming to boost asset and consumer prices. Not to mention,


Links November 5: QE II launch

FOMC statement in plain English. NPRBernanke put. Gavyn Davies, Felix SalmonBOJ QE pumped stocks, temporarily. PragCapAnd the markets love it. FTMultilateral trade scenarios.Michael PettisBudget catches Dutch Disease. SMHDOW rocket. BloombergCommodity rocket: Copper up, B of A screwed; PIGS monstered I, II, III;


How long can the hangover last.

Another day, another bank giving an unconvincing performance to overseas investors that there is no problems with Australian banking. WESTPAC’S $6 billion profit was not good news for all, with as many as 6000 head office and administration workers to go over the next two years. The job cuts are part of attempts by chief


Are they at it again ?

Some months ago we found a desperate attempt to drum up business by the RE industry. However because there is no regulator for this ridiculous industry it seems they have no problem with trying again. Today we note that a new set of poor dears are struggling because the neighbours have turned into renters… Time


A benevolent bust?

The FT’s Lex column has an interesting take on the RBA, commodities and the housing bubble today: Most Australians spent the first Tuesday in November obsessed with the Melbourne Cup. But the “horse race that stops the nation” did not prevent Glenn Stevens from working. The governor of the Reserve Bank of Australia raised interest



So, the Canadians have blocked BHP, as predicted. Good for them. Commentary is full of the usual one-eyed drivel about a “shock decision”. John Durie is typical: BHP can attempt to overturn the decision and will be as confused as everyone else given this was only Canada’s second rejection of a foreign takeover since it



This blog has dug up some beautiful graphs that show precisely where the RBA thinks net interest margins are for the big banks. But it’s not going to show them to you. The reason why is that they’re irrelevant. Despite what all but a handful of senior commentators are telling you, neither interest rates nor


Links November 4: Go to sleep little sheep

Bank strategy working. Apparently, it’s all about interest rates:Jennifer Hewitt on small business pain David Uren on gouging, notJohn Durie on ACCC powersScott Murdoch’s blahLenore Taylor supports Hockey’s nine pointsTerry McCrann & Stephen Bartholomeusz apologise for WestpacExcept Glenn Milne, who gets that it’s much bigger.Fed goes for $600 billion. BloombergQEII pushed RBA’s hand. WSJ, BloombergEmerging


Stage 1 – Panic and escape

Well the RBA came out and surprised everyone yesterday by putting up rates by a teenie weenie 25 bps. Setting off the gougies, as we expected, and frothing up the pollies who handed the same banks their position of power. Before we give some further analysis of what we think is going to happen next,


Hats off to a real banker

The SMH reports that today the chairman of Adelaide/Bendigo Bank Robert Johnon has called for a new Inquiry into banking: Bendigo and Adelaide Bank Ltd has called for another parliamentary inquiry into Australia’s financial system to address the banking system’s reliance on offshore funding. Bank chairman Robert Johanson told shareholders he hoped the Senate’s inquiry


The death of housing

For many years this blogger has tracked the great Australian housing bubble with increasing incredulity. It eventually concluded that is was so vast, so institutionalised and so vital to the savings of the middle class that the bubble was only going to burst when all of its many supports faced no available choice to keep


On their knees

If you want to understand how and why the Australian banks can flip the bird at the nation with impunity, you need look no further than the pathetic response of the senior commentators of the fourth estate. Their combined lack of imagination, curiosity, intellect and, above all, cohones, is the banks impunity. Responses vary from


Links November 3: Bank bashing, my butt

Piss weak bank fallout. Tim Colebatch, Peter Martin, Elizabeth Knight, Matthew Stevens, Michael Stutchbury, Stephen Bartholomeusz, Lenore Taylor, Rob Burgess.QEII risks end of the dollar. Ambrose Evans-Pritchard PIGS on a spit. Calculated Risk, EurointelligenceIreland bailed out in a month. Businessweek.No currency war here, pffft. EconompicHow China can win it. ReutersPotashCorp in the bag? SMHManufacturing leading


Happy gouging day.. Again

Last month we decided it was gouging day. We got it wrong because the RBA didn’t move; however this month they did. We were a month early on our call, but the effect is much the same. We knew as soon as the RBA did move that the banks would pile on the additional bps.


0 for 3 and the fallout

Well … this blog has lost its interest rate touch, that’s for sure. It has now blown it two months in a row and underestimated the banks to boot. As a contrarian it should have known better than to bet with the pack. The statement on monetary policy is kind of interesting. It meanders through


Today’s tips

Macro-economically – RBA to hold Micro-economically Shocking Americain Descarado We expect to be at least 100% wrong. Disclaimer: The content on this blog is the opinion of the author only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation, no matter how much it


Canada right to rebuff BHP

As a liberal and believer in functional markets, this blog reckons that from time-to-time it is necessary for policy to shape appropriate competition. Australia has always prided itself on “punching above its diplomatic weight”. The narrative of Australian foreign affairs is littered with this interpretation of the twentieth century. Some have interpreted this as a


Links November 2: The China punt

The China question. John GarnautChina’s property plateau. Money Game h/t Naked CapitalismChina exporters upset already. Washington PostChina’s aging to slow growth dramatically. BloombergBut not yet. PragCapPotashCorp slipping away. FT, BloombergMore Dutch Disease for tourism & manufacturing.Zombie ideas. John QuigginCup and handle exhausted in BDI. BDIWhy the RBA should raise rates. Henry ThorntonThe future of iron:


Property delusion on tour.

We note that Australians near religious love affair with housing is sending them off to foreign shores, delusion in hand. “America represents an opportunity, and Australians have just jumped all over it,” said Andrew Allen, founder of My USA Property, who was leading the tour. Allen’s firm, which has an office in Orlando, Fla., brokers


The "P" in PIIGS joins in.

We note today that after a little argy bargy Portugal has joined its other friends in the economic delusion club by finally initiating an Austerity budget. Portugal’s government and biggest opposition party agreed to let next year’s budget pass in a vote this week, aiming to stem the euro region’s fourth-biggest fiscal shortfall with cuts


Three financialisations

This post arose from today’s assessment of the September credit aggregate statistics. As noted in the post, lending is still a mix of consumer strength and business weakness. From a longer run perspective, this blogger is interested in this ongoing divergence because it reinforces an historic trend toward consumer lending, completely dominated by mortgages, and


Wallis on, Wallis off

Alan Kohler offers a confused take on the prospect of a new Wallis inquiry today. First, he argues rightly that: The big problem lies not with the banks and “collusive price signalling” as Joe Hockey calls it, but with the refusal of politicians to acknowledge that 40 per cent of bank funding comes from offshore.