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It’s called systemic risk

Today a couple of readers have sent us some more information about oversupply. It seems that the oversupply of houses is turning up all over the place. (Hat tip to Brandon and Kara for the story about perth) The idea that there is a housing shortage in Perth has been shot down by a leading

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Last redoubt of the cowboy capitalists

Der Spiegel published a brilliant study of the current pricing dynamics in the copper market this week. It is a fascinating and terrifying glimpse of the evolution of global capital’s shiny new bubble: metals. From the piece: In Manhattan, only one block from Ground Zero, 12 men are sitting at a round table in a

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No Joe (updated)

Here’s a scorecard for Joe Hockey’s nine point plan on bank re-regulation. This blogger can see why the Australian Bankers Association responded positively. Not much to fear here. 1. Let’s give the ACCC power to investigate collusive price signalling (that is, oligopolistic behaviour), which is exactly what Graeme Samuel has called for. H&H: And what’s

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Links October 26: Commerce not capital

Joe’s nine point plan to nowhere. Joe HockeyWhat copper can tell us about the dollar. Der SpeigelWhy capital controls rock. FTNYC as a microcosm of ForeclsoureGate. Naked CapitalismBill Black as a macrocosm of ForeclosureGate. MSNBCToo small the stimulus. Paul KrugmanUS housing inventory. Calculated RiskResentments between the rising and falling. FTSoft bids for ore. Reuters

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Howard and shoes.

What a shame !! ….. he missed. However John Howard’s publisher just took another order for 10,000 books. 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

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Non-Enrolment contagion

A couple of weeks ago we talked about the fact that tertiary enrolments, especially from India, were collapsing. Today we note that crickey has an article that non-enrolment is spreading. Students from India constitute the second biggest group of foreign fee-payers in Australian higher education but are still well behind those from China. In August,

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The US banks tried to play it down..

.. But the problem just keeps getting bigger. Thousands of foreclosures across the city [New York] are in question because paperwork used to justify the seizure of homes is riddled with flaws, a Daily News probe has found. Banks have suspended some 4,450 foreclosures in all five boroughs because of paperwork problems like missing and

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Queenslands’ perfect storm

As our readers would be well aware , Queensland is the Miami or California of the Australian property market. It is the canary in the coal mine, and the poor little bugger is choking on fumes. Today we note that the perfect storm has formed around the cage. Melbourne and Brisbane have closed the gap

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Not Macfarlane

The more things change the more they stay the same. From the SMH: The shadow treasurer, Joe Hockey, will call for an inquiry into the banking system today with the National Australia Bank, Westpac and the ANZ all expected to reveal record profits. In an address to the Australian Industry Group entitled ”It’s time to

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American housing resumes its crash

Those who believe that the danger of a double-dip recession has passed should take pause today to register an American housing market plunging with renewed vigor. As Calculated Risk reported over the weekend: Clear Capital™ Reports Sudden and Dramatic Drop in U.S. Home Prices “Clear Capital’s latest data through October 22 shows even more pronounced

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If Vic is the goose then Qld isn’t the gander

We note over the weekend that Victoria had it Super Saturday auctions and, although once again the clearance rates quoted by many in the industry fails the basic maths test, we can see that there are still many people inside the Victorian economic envelope willing to pay ever increasing prices for housing. HOME buyers were

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Services won’t save us

Two pieces today give you the bitter flavour of what is ahead for Australian exports. The first is a spot-on diatribe by Martin Feil at The Age. ACCORDING to many pundits and politicians, expanding the Australian services sector is the correct (if not the only) long-term strategic direction for the Australian economy. We have completely

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One honest man

So the G20 isn’t going to engage in the currency war that’s already raging. The US wants a “strong dollar” and China “market-determined exchange rates”. All countries are going to consider the Geithner imbalances plan already rejected. Is it this blog or did the G20 just hit new heights of Orwellian double-speak? Anyway, came across

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Links Oct 25: Services will save us!

Services no answer to Dutch Disease. Martin Feil CEOs won’t invest overseas despite high dollar. BloombergUS house prices resume their plunge. Calculated RiskThat’s before ForeclosureGate hits the market. FTMarket is about…oh…halfway down. CNBCForeclosureGate: Unimaginable amount of litigation. NYTFitch prepares downgrade for Wall St on Volcker. Zero HedgeG20’s Sino kiss: Imbalance paralysis, new IMF powers. FT,

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Weekend Mailbag

We are getting quite a bit of e-mail from readers these days so we thought we would start a weekend mailbag to answer some questions and share some information with the broader audience. We will not be providing any identifying information except first name (which is probably fake anyway :)) Peter Asked: Do you think

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Weekend Reading

Australian houses: highest in the known universe. The EconomistInteractive chart of global house prices. The EconomistRMBS guarantee alert: GSEs still hemorrhaging. NYT, Calculated RiskFOMC & QEII. Calculated RiskG20 flips bird at Geithner rebalancing plan (surprise!). ReutersIronic, US canned Keynes’ similar plan at Bretton Woods. MonbiotGod save austerity (or, QEIII). UK debt costs collapse. FTAustralia Post

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The economic conversation must be broader

We recommend our readers pop over to Houses and Holes for a very good analysis of the current Australian Banking environment and why Joe Hockey (the shadow treasure of Australia) is ruffling feathers. As noted by David, and a number of other sources , Joe Hockey has made a fair call to ask that Australia

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Go Joe

Yesterday, Shadow Treasurer, Joe Hockey, was torn to shreds for making the most sensible suggestion regarding Australian banks that this nation has heard since the global financial crisis. First on ABC radio and then again in a doorstop interview, Hockey made the case that the government needs to act to rein in unilateral interest rate

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Links Oct 22: Post haste

Australia Post to take on banks. The AgeBritain slashes. Washington PostForeclosureGate and systemic risk. Baseline ScenarioA first for China. GDP down, CPI up. EconompicAnd here’s why. John GarnautGlobal steel production falling. Steel OrbisThe road to tariffs. John TaylorUS needs help breaking yuan peg. FT Interesting question, this. If the US is going to start with

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Reverse engineering ore prices

A couple of excellent pieces are available today on the looming iron ore glut. The first is by Malcolm Maiden of The Age on Australian miners and their plans to expand production. The second is by Australasian Investment Review via the IBT on broader statistics in the global seaborne trade. Both are worth your time.

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No wood, all trees…

According to Banking Day: In a speech to a Finsia financial services conference, [RBA boffin Luci] Ellis argued that far from being complacent about a bubble, the RBA was searching for danger signs. But, she said, it was important to go beyond statistical averages to understand the housing market. As an example, she set out

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Links Oct 21: Iron fist

Fall out from China’s rate rise. John GarnautThe big supply-side iron response. Malcolm MaidenThe coming ore glut. IBTShort term Chinese ore demand. Steel OrbisBHP: ore pricing to go monthly. Trading MarketsCoal boom ahead. Mining WeeklyChina gettin’ nasty on rare earths. NYT American plutocracy. Robert ReichCapital controls debated. FTbeyondbricsSaskatchewan hands Feds excuse to reject BHP bid.

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Qld regional RE worse than we thought.

A busy day today, so we have no time to comment on any of the big issues. However we were sent a report today by a reader ( hat tip to “jess”) about the Queensland Real Estate market. It is a little old, but it is quite interesting because it shows that Queensland prices have

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Chinas’ adjustment, the AUD and Oz.

China confused the credit driven crazy world last night by doing something odd, actually trying to do something about a credit bubble and its not-so-hidden inflation problem. China sent global markets reeling after its central bank announced that it was lifting interest rates for the first time in nearly three years. The move pushed the

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In the dark

According to Reuters, Luci Ellis of the RBA said today that: Financial institutions will have to share more information on their activities with authorities to lessen the risk of another global financial crisis… it was important that regulators could detect the build-up of risk and leverage as it happened and where the risk was concentrated.

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It begins !!

As we mentioned on monday. We note today that the stink of death is leaking from the foreclosuregate pit. It doesn’t seem to have hit the markets yet, but we think it is only a matter of time Well it looks like that time started last night. As we said in regards to PIMCOs actions

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Irrational policy

For the past few years, we’ve heard a great deal about the irrationality of punters in the “market”. And rightly so. We humans are a bunch of hysterical children driven crazy by bouts of greed and fear. Not to mention other feelings. But we never hear about the same irrationality effecting policy-makers. Somehow our regulators

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Links Oct 20: Policy chaos

US QEII fail. Joseph StiglitzUS QEII fail. II. Stephen RoachBOE QEIII fail. BloombergRBA fail. Stephen BartholomeuszChina raises interest rates. BloombergA good idea. Michael PettisQEII bad for China says Yu Yongding. BloombergThe political economy of QEII. The EconomistChina still buying Treasuries (hint for Gotti). EconomipicForeclosureGate gets serious. Zero Hedge I, IIRisk off: I, II, IIIGreat news: