Trading Day

The S&P/ASX 200 closed slightly lower today, down 12 points or 0.3% to exactly 4200 points, recovering most of this week’s losses. Asian markets experienced similar caution, with the Nikkei 225 closing 0.29% higher at 8797 points, and the Hang Seng down 0.16% at 19720 points. In other risk assets, the AUD increased a little

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Next Week: QE or not to QE?

The week ahead should really start tonight with Ben Bernanke’s speech at Jackson Hole (2am AEST). But looking past the market volatility, earnings reports and more – what’s coming up next week? Locally, housing data will be key with new home sales, building approvals and RP Data house price figures released. Earnings season winds down,


Rates still to rise…yada, yada, yada

Like dogs with a bone, the banks just can’t let go of rate rises. Both CBA and NAB have issued notes indicating that the next move in interest rates will be up. Just…er…later. First CBA: Key Points The Governor repeated the favourable medium term growth outlook outlined in the August Statement on Monetary Policy (SMP).


Perth takes another hit

Over the late few weeks both the Unconventional Economist and I have highlighted the on going delusion in Western Australian real estate. Today I note that Perth is taking another hit from the MSM: Perth’s ailing property market is causing home owners to maintain a firm grip on their properties, waiting on average two years


It’s all good

Below find Glenn Stevens testimony in parliament today with a bit of commentary thrown in: Opening Statement to House of Representatives Standing Committee on Economics Glenn Stevens Governor Melbourne – 26 August 2011 Quite a bit has happened in both the global and local economies since we last met with the Committee. In February, we had seen


Fitch debunks decoupling

A new Fitch and Oxford Economics report nicely models the global knock-on effects in the event of a US recession. And its bye bye decoupling, even though the assumptions used are quite conservative. To begin, Fitch lays out a moderate recession scenario: Although a “double-dip” recession in the US is not Fitch’s base case, the agency


Cry Wulff

The German President looks to be attempting to single handedly destroy what is left of European economic stability. Yesterday, in front of  Nobel economics laureates and other financial experts, he opened the European economic conference with a speech that obviously was not proof read by anyone from the EU: In a cannon shot across Europe’s bows,


Chart of the Day

I’ll switch back to housing today, where I thought it would be interesting to show the long term run of house prices for the US, both in nominal and real (adjusted for inflation) terms. The chart comes from JParsons blog: And for a longer term comparison (adjusted for inflation only) using the S&P/Case-Shiller Index (this


Groundhog day

So, here is what I wrote on the eve of the Jackson Hole conference last year: The S&P500 tilted at the the key 1040 level again today, the neckline of a scary head-and-shoulders top pattern, and held. The Dow is sitting right at the psychologically potent 10,000 level. Gold is sitting right below all time


China will slow

In this week’s China post. I want to direct readers to some interesting recent reports on the Chinese economy. The first report, entitled China’s Empty Apartments, is a fascinating two-part series of posts on China’s housing market, written by freelance writer Michael Gsovski, who is a New Yorker that recently spent a year living in


August 26 links: Waiting for Bernanke

Up: $US Flat: Treasuries, gold, grains, metals, energy, Euro, Aussie Down:  CCI Greece, Portugal burn: 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


Trading Day

The S&P/ASX 200 closed higher today, up 45.2 points or 1.07% at 4212 points, recovering most of this week’s losses. Asian markets experienced similar gains, with the Nikkei 225 closing 1.5% higher at 8772 points, and the Hang Seng up 1.33% at 19724 points. In other risk assets, the AUD remained steady against the USD


Gold falls – to last week’s price

I’ve been following the gold price on MacroBusiness for sometime now, with my most recent piece a few weeks ago (and other comprehensive posts here and here) I placed the context of the move in the gold price in a weekly chart. Here is a better and larger view of that chart (click to enlarge


Did the media condemn us to Dutch disease?

Yesterday Paul Kelly wrote at The Australian that: The crisis now engulfing Australian manufacturing has been long predicted and much foreseen yet the inescapable impression is that our decision-makers have been taken by surprise and are scrambling to do something. …Yes, the government has been acting. The critique, however, is it has not acted enough.


Wenzou’s secret credit

As the People’s Bank of China tightens monetary policy, small and medium sized businesses are having a hard time borrowing from the formal banking system.  As a result, many turn to the underground banking system which basically consists of loan sharks and pawnshops. Last week, I posted on the early phases of run on property assets in Wenzou. Now, a new Caijing report


CBA trumps BofA

An interesting statistic from Bell Potter this morning. Bank of America, the bank that takes in a quarter of America’s deposits is worth less than Commonwealth Bank of Australia. Even adjusting for various factors, such as the obvious stress in the US banking system, which has not happened in Australia, the part nationalisation and the


Chart of the Day

Today’s chart comes via Cameron Murray’s blog post on savings and investment, which was prompted by a discussion started at Econompic. This chart shows the household savings rate for several developed countries – note how high and stable the German households saving’s rate is and how the UK (like Australia) dipped into negative territory. The


Red gold rush

So, BHP has announced a profit of epic proportions. The Age sets the scene nicely: BHP Billiton has vaulted into the ranks of the world’s top 10 earning companies – and sparked fresh debate over how much tax Australia should collect from its booming mining sector – after the resources giant posted a staggering $A22.46


Europe’s banker bloodbath

Well the news for the Germans didn’t get any better after the horrible ZEW: German business morale posted its steepest drop this month since the aftermath of the Lehman Brothers collapse in late 2008, raising fresh doubts about the broader European economy as it grapples with a crippling debt crisis. The Munich-based Ifo think tank said on


Dr Wilson you’re almost there

Anyone who has followed the Australian property market for any length of time would know the name Dr Andrew Wilson. He is an economist at Australian Property Monitors and a well known as someone who likes to talk up the market. He is quite well known for declaring any current weakness in housing activity as


A housing whodunit

Earlier this week, I posted an article, The Texas housing miracle, which once again argued that housing markets with responsive land/housing supply are both more affordable and less prone to bubbles/busts than markets where land supply is constrained by physical and/or regulatory barriers. The article, whilst acknowledging other US states with similarly relaxed land-use regimes,


August 25 links: Politics trumps policy

Crash: gold Down: Treasuries Flat: $US, grains, metals, energy, Euro, Aussie Down:  CCI Greece, Portugal accident: 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


Trading Day

The S&P/ASX 200 closed slightly down today after a strong rally in the morning, to finish 5 points down at 4167. Asian markets experienced larger losses, with the Nikkei 225 closing down 1% at 8639 points, and the Hang Seng down 1.3% at 19619 points. In other risk assets, the AUD bounced back against the


Build it bigger

Here’s some good news. Today’s ABS Construction Work Done report for the June quarter showed decent activity in regular building work – housing and commercial realty – and stratospheric activity in engineering construction, which is all those major projects in mining:   The boom is most obvious in the private sector but public sector is


The bank cheer squad tunes up

Sigh…somebody shoot me. Bloomberg today has provided such a spectacular piece of selective reporting that I feel I’ve had a lobotomy: Bond markets are judging Australia’s banks to be the safest in at least a year relative to European and U.S. firms after the South Pacific nation’s lenders cut their dependence on overseas funding that


Parko puts ’em to sleep

Honestly, boring! After yesterday’s Battelino nothing speech, I’ve now managed to wade through Treasury Secretary Martin Parkinson’s effort last night at The Shann Memorial Lecture. Titled “Sustainable Wellbeing – an Economic Future for Australia” the thing is truly soporific, worthy of some Platonic form of bureaucratic perfection. The speech began poorly, citing a series of


The Battelino Q&A

Yesterday’s disappointing Battelino address – which seemed to have no purpose beyond blaming the banks for the rates overshoot (I thought the RBA took bank hikes into account?) and having a bit of a whinge about how hard central banking is – was followed by a Q&A session. And, here it is. (h/t the Lorax)


Bears proliferate

The reporting season is starting to reveal a pretty gloomy story. The cheery assertions that everything is fine in Australia because of high employment levels is about to get a caning. The Australian economy has had some protection from the travails of the developed economies because of the resources boom, but the full impact of