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Here we go again

Well here we are again. Not that it wasn’t obvious, I have previously talked about why, and also about the Greek mess, this is no different. Europe’s wealthy countries looked to Portugal to resolve the year-old euro debt crisis by coming up with “sustainable” deficit cuts to pave the way to an 80 billion-euro ($116 billion)

Latest posts

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April 11 Links: Plans gone astray

You’re still with DE Week ahead for the DOW Calculated Risk PIMCO goes even more cash Zero Hedge Icelanders say No Again WSJ Europe sues SMH Troika in Portugal with a new “plan” News.com.au. I am sure I have seen that plan somewhere else Europes banks stampede for capital The economist UN all in at Ivory Coast 

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Lessons from the UK housing crash

It’s time for another trip down memory lane. It’s September 2007 and home prices in London have just started to fall, but are still holding up nationally (see below chart). UK households are growing increasingly nervous. After embarking on an almighty borrowing binge over the 2000s, as evident by household debt to disposable incomes rising

10

Collateral damage

A recent article in Smartcompany commented on signs that the banks are starting to lend for business as the residential, negative gearing property rort shows signs of slowing. Not likely. What this does not factor in is the relationship between business credit and the heavy dependence on lending against property. According to the Australian Prudential Regulation

15

Aussie dollar weekly wrap

A big week for the Australian dollar ended with it for the first time in the modern era above 1.05. The actual New York close of 1.0564 is more than 2.5 cents above the low for the week registered on Tuesday. Up until the employment figures on  Thursday, the Aussie’s strength reflected a weak USD,

7

EIU report on China’s housing bubble

Below find the executive summary of a new report into China’s housing bubble from The Economist Intelligence Unit. It has some terrific stats and is well worth your time, even though its analysis and conclusion add up to the intensely suspicious conclusion that ‘this time it’s different’. One particular claim I’ll take umbrage with is

6

Weekend Links with DE

While H&H is away I get to play 🙂 Anything you can dig up is UP: ore, metals.  I was going to buy silver when it was $US15 Silverprice Doh ! Copper can’t stop forexyard Moonlanding with the Aussie. Mostly Up: grains.  US Congress play chicken CNN Ivory Coast boils BBC Japan won’t stop shaking BBC Hiding the nuke

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RPData on population

RPData produce a weekly report about the housing market. Their latest offerring  has some very interesting data on Australia’s population growth. I do not totally agree with their conclusions from the data but that doesn’t change its usefulness. Australia’s population growth slowing as migrant numbers fade With cuts to the migration intake, Australia’s annual rate

13

Lucky they’ve got the government

Real estate agent watching is becoming a bit of a sport in Queensland. As the market turns the level of desperation is slowly rising. I get quite a few e-mails from readers informing me of their local agents antics. It may surprise you just how much your local agent knows about macroeconomics, microeconomics, forex markets,

14

Swannie Mac

Hot from the office of the Treasuer:  More Support for a Competitive Lending Market Today I announce that I have directed the Australian Office of Financial Management (AOFM) to invest a further $4 billion in high-quality, AAA-rated Australian residential mortgage-backed securities (RMBS) to help smaller lenders continue to offer competitive loans to families and small

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Weekly Markets Analysis: 8th April

Lots of charts to look at today, first the usual fractal look at the Australian market, and then a quick look at the major components of my “Crashlist”. This is a select list of equity, FX and PM markets that I watch each evening as they open and analyse each morning before the Australian market

0

Donkey, thoroughbred marry

On Monday, at an Extraordinary General Meeting, Western Australian Newspaper (WAN) shareholders will likely approve the purchase of Seven Media Group (SMG) for $4.1 billion. The Seven Group forms part of SVM, which consists of the Seven Group and Westrac (a heavy machinery servicing group).  Aside from the free-to-air (FTA) channels 7, 7two and 7mate,

17

The underemployment question

Yesterday’s strong employment numbers from the ABS stoked an interesting debate in the comments about what degree of underemployment Australia suffers. To help the debate along I’ve drawn up the following table from the ABS Underemployed Workers report. It is annual only and from Spetember 2010 It clearly shows two things. First, that labour markets in

10

Cyrano de Boganac

During the week, Woolworths announced that its CEO, Michael Luscombe, was stepping down in favour of some fresh blood in Grant O’Brien. The local media, desperate to get into a flurry over something other than Kevin Rudd telling the country what it already knew, began flailing wildly for an angle, settling on one of two

15

The mad, bad commodity rally

There’s something wrong with this rally. To be honest, beyond some vague notion of Japanese reconstruction demand, I can’t find any real cause for it. With China clearly not done with tightening, QE2 about to cease, the ECB hiking rates, global growth past its prime and oil punching through $1.10 on Gaddafi’s scorched earth policy,

3

Picking winners

A few commentators to my Picking Losers blog earlier in the week quite rightly pointed out the potential for gas-fired CCGT plant to be a sensible baseload replacement for brown coal-fired power. I have looked at the numbers, and agree. Taking the cost of new gas CCGT at around $1million per MW, replacing 6GW of

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April 8 links: Commodity peak

Dear reader, I’ll being going off grid for the next week. Links will be still be available, compiled by Delusional Economics. I’ll still be posting but probably not in the morning’s. Back soon. David Rockets: ore, metals, energy. Up: Aussie. Down: grains. Flat: $US Commodity inflation hitting US expectations. Bloomberg Core Logic registers new plunge in US housing. Calculated Risk These are

12

Tax stats unmask investors

The 2008-09 Australian Taxation Office (ATO) Taxation Statistics were released yesterday (available here), and the data on property investment was very interesting. First, the number of property investors reporting to the ATO fell by 34,000 or 2% from the previous year (see below chart). Second, after rising steadily since 1999-00, the overall value of net

1

Small is beautiful

Analysts’ resources and attention mostly goes on the top 50 stocks, because they are liquid, institutions like them because they can defend their decisions, and brokers can sell their research more easily. It leads to an unhealthy relationship between the fund managers overseeing super funds and the big cartels. Cosy, comfortable, often compromised. For investors

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Hollowing out

Washington Consensus and Dutch Disease – yesterday saw an interesting convergence of these two ideas which are vitally important to the debate, or lack thereof about the structure of the Australian economy and the changes being wrought by mining and the high Australian dollar. Briefly, the Washington Consensus was the set of “rules” which replaced

17

Will the RBA cut?

Right now, the economy is far weaker than media and bank economist blather is letting on, or understands. For that matter it’s far more weak than global markets are assuming. The reason is simple and goes back to a piece I wrote ten weeks ago: So, let’s take a closer look at where we are

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March 7 links: A QE timeline

Rockets: ore, metals, Aussie. Mixed: grains. Flat: energy. Down: $US A QE timeline. Calculated Risk Must read QE and commodities. Alphaville QE and commodities II. Alphaville More hawkish rhetoric. Tim Duy The US natural gas boon. Carpe Diem Global economy slowing. PragCap Waiting for the great rebalancing. Martin Wolf Maiden wakes up. SMH Port Douglas fire sale. The Oz Ore market dynamics. Reuters

15

AFG – Mortgages bouncing in March

February’s data for housing was obviously terrible. However if we can take AFG’s latest report on mortgage issuance for March the market may still have a bit of a run left in it. Well at least in NSW. Mortgage sales during March saw a recovery from the record lows of January and February, but figures were

15

SQM Research on the housing finance data

As my fellow MacroBusiness bloggers have already pointed out, Australia’s housing finance data released today by the ABS was bad, real bad. One of Australia’s few truely independent property analysts, the Managing Director of SQM Research, Louis Christopher, offered perhaps the most damning assessment via a series of Tweets: Home loans drop on weak demand

17

It’s still 2008

As H&H reported today the housing finance data for February is simply plain bad. This is not a surprise to me as I have been warning about this for some time now. As I have been saying recently I simply could not see any drivers for new credit and it looks like I was correct

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Housing finance shocker

The drumbeat of crappy housing data is getting louder and more frequent. From the ABS February Housing Finance we get the following: Here are a string of graphs to give you a feel for how bad the trends are: I call them bad, yuk, crap and foul. And here’s one last one to drive home the

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Priced in

The Australian market’s S&P/ASX 200 only rallied 1% in the first three months of the year, compared with 5.4% for the S&P 500 in America. With the $A seemingly headed to $1.10, foreign investors, abut two fifths of the market, are likely to get nervous, and the strengths of the Australian market are probably priced

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Troubles with Fund Management – An Absolute Return View

This is a reply to Rotten Apple’s post about the “trouble” with the Australian fund management industry. The author of this article is a co-founder of an Australian-based private investment company, Empire Investing, and a former financial adviser and portfolio manager for a boutique financial services company. It’s all Absolutely Relative
 Let me start with

20

Golden rocket

As gold again surged to record highs last night on dovish Bernanke comments and weak data, it’s time to revisit the rally. I first began recommending gold to anyone that would listen in early 2001. I was laughed at. Later that year, my friends laughed at me again. This time, it was a running joke