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Anatomy of a Crash

The mainstream media (MSM) have repeated verbatim their headlines of drastic downturns in stockmarkets, but what’s really going on around the world? In this post I want to illustrate the anatomy behind worldwide market ructions, placing them in context to the 2007/08 crash using some macro charts, and how its not just stock markets “suffering”.

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Another Crisis – Live

It looks as if European crises have now become a bi-monthly event with the previous one just 2 weeks ago. Once again the Daily Telegraph UK has supplied insomniac Schadenfreudalists with some riveting entertainment with another semi-live blog of the unfolding drama. Latest update 10.00 Italy‘s GDP figures are out, and they’ve come in as expected. Official

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Australian dollar downside targets

The AUD traded a 1.0390 to 1.0790 range for a couple of months before breaking out recently and trading all the way up to 1.1080. The ructions in markets have it threatening the bottom of this range as I write, with the AUD at 1.0442 as Europe has walked in and started selling in earnest

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Earnings Update: Resmed

Only one company reported earnings today on the ASX: Resmed (RMD). Macrobusiness will be reporting on earnings and valuing the key companies throughout the earnings season. Remember to bookmark the overall update here. Resmed(RMD) Resmed, a manufacturer and marketer of respiratory disorder products, announced year end revenue of US$1.2 billion, a 14% increase, resulting in

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Next Week: earnings continue

Amongst the market meltdowns, the data prints and earnings reports roll on – what’s coming up next week? Locally, housing and finance lending data will be closely scrutinized. The share market continues with full year earnings results – click here for my continually updated post on earnings, including links to news and valuations. Internationally, its

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RBA forecasts

Below find a series of charts illustrating the changes to the RBA’s forecast arising from today’s Statement on Monetary Policy. Somehow, I think the alterations we’ll see in the next SoMP may be somewhat greater…  

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Trading Day

The S&P/ASX 200 slumped on the open, down over 160 points or nearly 4% and is now at 4115 points. Other Asian markets are experiencing similar sharp losses, with the Nikkei 225 down 3.5% at 9319 points, and the Hang Seng falling further, down 4.5% at 20895 points. Other risk assets are getting walloped, with

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SoMP hedges its bets

Today’s quarterly Statement on Monetary Policy is, like the economy, a balancing act. The RBA’s confirmed its central medium term bias to raise interest rates by confirming its expects above average rates of growth ahead: In the short term, the GDP outcomes for the next few quarters are expected to be boosted by arecovery in

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Bank CDS holding up (down)

We noted recently that there had been a worrying blow-out in Australian bank CDS prices. Taking a look today, amidst the advancing global turmoil, we can see that things have not so far deteriorated: Over the longer term, however, prices remain quite elevated:

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Chart of the Day: bear is back

Today’s charts come from Avid Chartist, who has summarised last night (and in fact the whole week) bear action on his blog. This is a bear market – where rallies (on expectation of milky wilkies – QE, stimulus, rate cuts etc) will be sold short by traders. The most closely watched equity market – the

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Australian dollar is no safe haven

The AUD has been smashed in the past 36 hours as markets have gone off and fear and uncertainty has risen. From trading 1.1068 earlier in the week it sits at 1.0468 as I write. In many ways it is a resumption of usual transmission for the currency that I believe is the world’s favourite punt. This

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The centre cannot hold

It’s quaint you know. Analysts faith in the system, I mean. There are a couple of really smart articles out this morning from really smart people about really smart things. And they’re making reassuring noises that there is no recession coming and that you should stay in your trades, that yesterday’s money making strategy is

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AFG’s July data

Just so we are clear about this, I am no longer sure if I trust the AFG data after the data revisions I reported on in early July. But in crazy times such as these it is important that everyone gets all the data and makes the decisions for themselves. So for the sake of

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Will aged care exacerbate the baby boomer bust?

Yesterday, Fairfax published an interesting article, Sell the family home: PM’s aged care shake-up, which highlights one of the key longer-term challenges facing the Australian housing market: the impending retirement of the baby boomers. JULIA GILLARD will prepare the ground today for the biggest shake-up of aged care in decades with a speech calling for

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CBA’s returning storm

As a resident of Townsville in North Queensland during the pre-GFC stock market frenzy I witnessed first hand the madness that was Storm Financial. Many of my colleagues would strut around the office spruiking about their wealth and their up-and-coming all expenses paid holiday to Europe where Tina Arena would be doing a personal concert

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August 5: The crash we had to have

Rockets: $US Pulverised: CRB, energy Only smashed: Aussie, grains, metals, gold, euro Up: ore Ragin’ 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

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Earnings Update: RIO, TCL, ERA

Three companies reported earnings today on the ASX: Rio Tinto (RIO), Transurban (TCL) and Energy Resources Australia (ERA). Macrobusiness will be reporting on earnings and valuing the key companies throughout the earnings season. Remember to bookmark the overall update here. Energy Resources of Australia (ERA) ERA reported a loss of $121.7 million in the six

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PC report spanks online retail

In its monster retail report, the Productivity Commission has recommended (among a great many things) that the government lower the tax free threshold on online purchases of foreign goods. Thankfully, however, it has also amply demonstrated the practical foolishness of the idea with an assessment of the costs involved in monitoring the parcels at the

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Europe’s dominos

There is a now a well-worn path beaten out by European nations as they approach the alter of the markets to plead that they “are different” from the previous cast that have just made the same trek. The speech given to market gods  is always the same, “we are different”, “the market underestimates us”, “we

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Trading Day: QE reprieve?

The S&P/ASX 200 is down slightly after midday, 16 points or 0.3% at 4316, after digesting European market plunges and US market shenanigans overnight. Other Asian markets are experiencing gains, with the Nikkei 225 up 0.97% at 9724 points, and the Hang Seng steady at 22026 points. Other risk assets are generally down, with the

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Double Dutch continues for tourism

From the ABS, here are the June short term arrivals and departures. Wonder why tourism hasn’t tried a “Buy Australia” campaign yet. Double Dutch powers on: JUNE KEY POINTS SHORT-TERM VISITOR ARRIVALS TO AUSTRALIA Trend estimates: Short-term visitor arrivals during June 2011 (475,600 movements) decreased 0.5% compared with May 2011 (477,800 movements). This followed monthly

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SMEs unhappy too

Yesterday NAB released its quarterly SME Business Survey. It’s not generally something I follow but given my conjecture on the likelihood that we’ll see job losses ahead, I thought it might be useful to examine the report this morning. SMEs employ 7.3 million Australians, some 64% of the work force. Not surprisingly, the headline results

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Cost cutting is not a strategy

It’s going to be tough out there for Australian companies not in the mining sector. A Macquarie report shows that companies are battening down the hatches as they are faced with higher costs and weaker demand. While this is hardly a surprise finding in an economy, ex-mining, that is close to recession it is clear

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Chart of the Day: Current Account Deficit

Today’s chart comes from Cameron Murray’s recent expose on Australia’s persistent current account deficit. The chart (and Cameron’s analysis) highlights the key difference between Australia and Norway (and other stable advanced economies), if we were ever to attempt to create a SWF, or indeed change from a debt based economy to a productive one.

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Is unemployment about to jump?

Yesterday, Roy Morgan Research released their latest poll on unemployment and and it caused a minor stir amongst market watchers: In July 2011 Australia’s total unemployment as measured by Roy Morgan was 885,000 (7.6%), up 40,000 (0.6%) from June 2011, and up 148,000 (up 1.3%) since July 2010. The Roy Morgan July 2011 ‘underemployed’* estimate was virtually

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More rent hysteria

It’s been interesting watching the change in perceptions regarding the housing market. Around this time last year, several well-known housing commentators were predicting strong gains in home values, including: BIS Shrapnel, which in July 2010 forecast a 30% rise in home prices over 3 years; and Australian Property Monitors (APM), which in March 2011 forecast

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Market ahead of itself on rate cuts

It was only a couple of days ago that the RBA told us they had expressly discussed the prospect of tightening rates at this month’s Board meeting yet this morning as I write the market has 80 basis points, that’s three RBA cuts, of easing over the course of the next year. This is an

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ex-Fed trinity muse on QE3

  Below find the video that triggered last night’s equities bounce back. I’m not sure why it stimulated any such thing. There’s not much that’s bullish in it in my view. The phrase that comes to mind for me is ‘old men talk while young men die’:

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August 4 links: Dead cat sups the milkies

Rockets: Euro, gold Up: ore Down: $US, grains, Aussie, , CRB, energy, metals Italy, Spain ease: 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

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RPData’s August video

RPData’s August housing market overview video was released today and is available below. Although I don’t agree with some of conclusions there isn’t much need for additional comment as once again the data trends speak for themselves. I do wonder however, given the latest credit issuance data, if those are bulltraps I see forming/ed at the end of some