World Bank warns China (Canberra)

The World Bank has damned the lifeboats in its China Quarterly Update and called out multiple risks including a housing bubble, inflation and external imbalances. Here is the money excerpt: Inflation is unlikely to escalate but there are risks. Food price increases seem to have slowed for now, sequentially, and the (yoy) rate of increase in

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Special Investigation: The Big Spruik

I have previously spoken about my annoyance with the liberties available to the Real Estate industry because their agents are do not have to conform with the Australian Financial Services Licencing Act. I find this a bizarre legal exception, most especially because the housing market represents $4 trillion of national wealth versus $1.2 trillion in


April 29 Links: AUD rockets for Royals

Up: metals,  Down: grains, $US Mixed: energy Up Again: Aussie new new  new new new record to 1.0947  Business Day Portugal’s turn today Bloomberg Analysis Bloomberg US growth slows to 1.8% in Q1 Bloomberg Weekly Initial Jobless claims increase CalculatedRisk Tornado season in US worst in 4 decades, 259 dead Reuters Syria still boiling CNN


Housing credit to remain subdued

A joint report from JPMorgan and Fujitsu Australia predicts that housing credit growth will remain subdued for an extended period: The three-month annualised growth rate [of housing credit] dropped from nine per cent in September 2010 to 6.7 per cent in February 2011 and is unlikely to return to double-digit growth rates seen before the


Trading Day 28th April

Yesterday’s inflation figures weighed heavily on the market as it dropped almost 1%, but found support at the pre-Easter opening level (4870). Overnight, news from The Bernank that everything is fine, but its not, so we will continue to stimulate, rallied all risk markets (except silver), and the Aussie market has opened up on digestion


Stronger for longer

As readers know the USD, as the other side of the AUD/USD coin, is one of my 5 key drivers of the Aussie as I have discussed before. So where it’s going and what it’s doing is a key to divining the future of the Australia dollar.  Since the mid-1990’s, starting with Robert Rubin, US


Dollar downgrades

The impact of the high Australian dollar is becoming a feature in broker forecasts and broker sentiment. Southern Cross, having blamed the Federal government for all Australia’s problems, now seems to believe that some of it is due to the high currency. Perhaps they have woken to the joys of reading MacroBusiness. A Southern Cross report today


Housing corrections & shares

We talk a lot on MacroBusiness about an Australian housing bubble.  H&H, UE and DE are doing a sterling job of demonstrating Australian house prices are historically high by any meaningful measure.  Plenty of people – in fact most in the mainstream media and real estate industry – disagree with them, some vehemently so. But


Westpac’s hidden message

Back on the 31st of March Bill Evans from Westpac presented a talk to the Real Estate Institute of Queensland(REIQ).  However I am unsure whether anyone liked what he actually said, because the only reference I can find to the presentation’s contents is on some obscure websites such as this one. As the Reserve Bank of Australia


Inflation expectations my butt

So, Bernanke has given markets what they need to hear. First, it’s damn the lifeboats on commodities inflation: Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The unemployment rate remains elevated, and measures of underlying inflation continue to be somewhat low, relative to levels that the Committee judges to


April 28 Links: Bernanke High

Up: metals, energy Down: grains, $US Up Again: Aussie new  new new new record Greek two-year smells worse. Bloomberg Contagion: Portugal, Italy, Belgium Lucky the UK isn’t in the Euro Telegraph UK Bernanke: US recovery “moderate”, bond buying stops in June Bloomberg But he will still be there Reuters And the “markets” love it WSJ Gold hits record as


Negative gearing on the nose

Over the past two months, the calls to wind-back negative gearing have grown louder, spearheaded by Fairfax media. In early March, Fairfax’s Michael McNamara wrote a fantastic article arguing to abolish negative gearing. This article was followed up in Fairfax by Saul Eslake, who lambasted Australia’s dysfunctional tax system, especially negative gearing, for the way in which it


Will the RBA hike?

So, Adam Carr is enjoying a spectacular victory lap having been the only one who dared contemplate a June rate rise. And fair enough too. Here’s is a sample: The bottom line is that inflation is on the march – in addition to food, health costs are rising, as are the costs of education, rents,


Inflation stirring

Find above details of today’s ABS CPI release for the March quarter. Broadly speaking, I have two observations. First, if you look at the above bar graph, it is entirely clear that this is an outlying result vis-a-vis the trend. Roughly 23% of the jump came from fruit and vegetables alone, which is clearly flood related


Trading Day – 27th April

Summary After peaking sharply on the open, the market has settled slightly up after the almost week long Easter/ANZAC break, at 4918 points. NOTE: as I was compiling this report, the PPI figures came out and the market has sunk over 20 points after midday. The short term trend remains weak but positive on momentum,


Victorian troubles

In my recent budget analysis piece I spoke about public final demand. Forecast 6: Public final demand, having risen strongly in 2009‑10, is forecast to moderate in 2010‑11 and 2011‑12, reflecting the unwinding of the Government’s fiscal stimulus measures and a broader moderation in spending growth across other levels of government. Analysis: I am going


Pettis on yuan

From Michael Pettis this week: On Friday last week the National Bureau of Statistics released the eagerly anticipated first quarter data.  As has been widely reported, first quarter GDP was up 9.7% year on year. CPI inflation 5.4% in March, a 32-month high, and up from 4.9% for the first two months of this year.  For the first


April 27 links: Of greed and fools

Down: metals, energy, grains Flat: $US, Aussie Shock! Greek deficit gets worse. Calculated Risk Spain too. Business Insider Shanghai breaks 50 DMA. Bespoke What Bernanke should say. Gavyn Davies US is slowing. Gavyn Davies Grantham on the commodity paradigm shift. Alphaville Son of Wallis lite draws to laughable conclusion. SMH Manufacturers turn to protectionism. The Oz Miners want


“Negative equity” hits thousands of WA homeowners

Earlier this month, the Western Australian (WA) Chamber of Commerce noted that the WA economy had fallen into technical recession, experiencing two successive quarters of negative economic growth in the last six months of 2010:  Western Australia is generally regarded as Australia’s economic engine room with its booming resources sector, but its manufacturing and retail sectors are struggling. The WA Chamber


April 26 Links: A few surprises

DE Again Week ahead for the DOW Calculated Risk Up: gold, metals, grains Down: energy, Aussie  Flat: $US Analysis Bloomberg , Reuters Syria Crisis BBC US mulling sanctions Reuters Yemen still bubbling CNN China raising capital requirements again Bloomberg Gillard is there ABC Oz Government confident of free trade deal with Sth Korea ABC Japan’s car production down 60% ABC Portugal’s


A warning to Canberra

From the ANU’s East Asia Forum comes this sobering assessment of the challenges facing the Chinese economy: China recently wrapped up the National People’s Congress (NPC) and Chinese People’s Political Consultation Conference (CPPCC) with the approval of the 12th Five Year Plan (FYP) (2011-2015). At the top of the new blueprint is a commitment to


More on NCCP (Updated)

I first mentioned National Consumer Credit Protection back in early January when I suggested it could have an effect on the housing market. This certainly reads like it should improve credit standards, especially if any of these things were actually allowed previous to this new legislation; and we applaud this legislation if this is the


Here comes the budget pain

Last week’s article, Hooked on property, provided some detailed facts and figures from RP Data highlighting how Australia’s state and local governments are addicted to property-related taxes, and discussed how these revenues are expected to fall precipitously as housing sales decline and prices stagnate. The article concluded with the following statement: Over the past decade,


Australian Dollar Weekly Wrap

Another stellar week for the AUD, if you are a bull or long, and another new post float high and weekly close at 1.0738. The combination of a weak USD after the warning by Standard and Poors about the future of the United States AAA rating combined with solid terms of trade data and a


Looking beyond interest rates

Sam Birmingham runs a top quality networking site for young professionals called WeBe, which provides up-to-date information on financial matters, work-related issues, lifestyle news and reviews, and current affairs and opinion pieces. WeBe also provides a platform where members can have their voices heard, express opinions and share ideas with other like-minded Young Professionals. Yesterday,


Easter Friday Links: AUD High

DE Again, Up: gold, metals, energy, ore , grains Aussie Up too , with a new new new record Down: $US Analysis Bloomberg Obama looking for fraud in US energy Reuters Robots to do US dirty work in Libya News.com.au As Libyan rebel push on BBC $1b axe to fall on  Oz Fed public service  SMH Origin signs $90b LNG


Triguboff sounds the alarm

I haven’t mentioned Harry Triguboff previously. For those who aren’t aware he is also known as “High rise Harry” and is the head of Meriton. Meriton are the largest developer of apartments in Australia with around 50,000 under their name. Harry is a huge supporter of “Big” Australia and is obviously a person who would


Will the RBA step in front of the train?

I’ve raged against the fact that the AUD is hollowing out our import competing industries and our non-mining exports but today, as the AUD careens towards 1.10, I want to focus on whether the RBA is going to do anything about it.   Just now, the dollar is being buoyed by two major themes. The