Shareholder confidence falls

It’s a slow data day today so for something a bit different here is the Global Proxy/Melbourne Institute Shareholder Confidence Survey for August. It doesn’t take Einstein to figure out that sentiment is falling but I guess some attempt to measure how far and fast is welcome. Doing so quarterly, however, isn’t terribly useful. GPS

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Good news for oil (and Libya)

The FT is reporting that: Colonel Muammer Gaddafi’s 41-year rule over Libya was collapsing as rebel forces advanced deep into the capital, capturing his son, Seif al-Islam. As jubilant crowds filled Green Square at the heart of Tripoli on Sunday night, the rebels said they would grant safe passage to Col Gaddafi and his family


Politics and markets collide

Political economy, once considered an interesting academic aside, is now front and centre in investment thinking. Decades of ideology masquerading as economic truism have resulted in the predictable polarisation of wealth, and that is now starting to become an unavoidable fact in anticipating the direction of markets. Even the investment bank Morgan Stanley is starting


10 steps to manufacturing annihilation

Poor, poor manufacturing. It’s on the ten steps to doom: 1. Resources boom drives up the dollar and crushes competitiveness. 2. Canberra consensus embraces manufacturing’s destruction in the name of “adjustment” towards greater resources output. 3. Australian Industry Group (AIG) adopts a genteel approach to defending its members from annihilation. 4. Ken Henry proposes byzantine resource


Big trouble ahead (posted by Leith van Onselen)

Back in May, former Reserve Bank of New Zealand advisor, Terry “Macca” McFadgen, wrote a guest post on MacroBusiness entitled: Will Aussie housing go bust?  Now Terry is back with another serving of ‘Maccanomics’. In this installment, Terry provides a sobering assessment of the global economy, and maps-out how events might unfold. This is a


What is Mike Smith up to?

Last Friday, the media was full of quotes from ANZ CEO Mike Smith about a coming crisis: “Europe is frankly a mess, with quite genuine concerns about the solvency of countries such as Greece, Ireland and Portugal [and] the contagion effect that has on countries such as Italy and Spain,” he said in a conference call. “In


Dividend hugging in harsh times

Throughout Friday, the azure blue sky above Brisbane was marred by the criss-cross pattern of contrails, as investors panicked and took the first flights to safety they could find.  Gold was a popular holiday spot, whilst Equityville and Commodity City were deserted come close of business. And really, who can blame them?  This graph shows


Messages from the front-line

Anyone that follows the Australian housing market will know that the South-East Queensland (SEQ) and Perth housing markets are in trouble. After registering above average house price growth in the years leading up to the global financial crisis, both regions are now underperforming, registering significant falls over the past 12 months. According to RP Data,



Anyone who has been following my posting for any length of time would know that I am certainly not a friend of the IMF. In my opinion their persistent “one plan fits all” ideology has been very damaging to the world’s economy and has made the recent crisis in Europe far worse. The IMF has


The block flop

Back in June I noted that Channel 9 had completely overestimated the housing market for this year’s production of “The Block”. The production company behind Channel 9′s hit, The Block, may have bitten off more than it can chew after paying $3.6 million for a row of rundown terraces in Richmond. As the property market


August 22 links: Libyan hope

Fighting erupts in Tripoli. WSJ, FT What will Bernanke say? Calculated Risk, FT, Gavyn Davies US growth and earnings. Zero Hedge US rail traffic flat. PragCap Profits of doom miss the mark. SMH LOL More bank discounts. The Age Here comes the manufacturing ‘crisis’. The Oz Hooray! Get ye to the Pilbara you bludgers. The Oz (Being sarcastic) The ‘natural’


Weekend special: Perverse Chinese banking

Take an hour today to view this spectacular discussion about the contemporary Chinese banking system from G+ (h/t Patrick Chovanec). It includes the history of reform, the epic fallout of the 08/09 stimulus, real levels of debt, off balance sheet and non-performing loans, asset bubbles, the role of inflation, triggers for crisis, durability of growth,


Data vault

Australian Data In a rather quiet week of local data we had a couple of key releases. The major highlight was wages data where had mixed outcomes. Over the long run however the leading indicators of employment continue to signal that there is further weakness ahead which should keep a lid on wage pressures much


Innovate or die

I have been reliably informed by Houses & Holes that we are “all going to die”, and rather sooner than we all imagined. Something to do with the economic meltdown in Europe and America, I believe. While I have no reason to doubt such potent insight — after all, death is the best one way


The buck stops here

Sam Burmingham, founder and editor of the WeMoney Newsletter, has written an entertaining article on his blog on attribution theory. Sam’s article is provided below for your reading pleasure. As always, comments are welcome. The events of the past few weeks have been the perfect reminder of a concept that struck a chord with me


Weekend Links: Another rough night

To the moon:  gold Up: grains,metals, CRB ,energy Flat: Treasuries, Euro, Aussie Down: $US Core 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


An exit plan for Europe

Over the last year or so Europe has been moving towards a “crunch” point where a decision must be made between fiscal-political unity and separation. I have explained at length that the austerity measures introduced to periphery nations would not work as suggested by the IMF and EU because the reduction of debt would lead


Technicals point down

In today’s charting post, I’ll cover some of the key markets to explain the context of last night’s breakdown in risk and possibly where we are heading. Currencies The AUD/JPY cross is closely correlated with the S&P/ASX200 and begins my analysis. This 18 month daily chart explains what has happened to the Yen from before


Squabbling over the carcass

I find it odd how equity markets move. The credit markets have been continually screaming about Europe for weeks and if you have been reading you would know that the economic system in Europe has been slowly collapsing inwards on the ECB’s balance sheet. None of this should have been a surprise to share markets,


This is not a test

Sadly I’ve been right. The US is plunging into recession. Not just idling in, plunging. Last night’s collapse in the Philly Fed leaves no room for doubt. Europe will follow. Next up in the US will be a new round of job losses. Look at this chart from Zero Hedge which compares the Philly Fed Index


US recession a certainty

From the excellent analysts at Forecast comes this note from yesterday: US recession a certainty on asset based probability model * Probability model currently arguing that a recession is a near certainty within next year * Backs up signals from the more coincident consumer confidence gauge * Argues for more ‘distribution’ as risk is unloaded


The stress in household credit

Yesterday, in a post about some long term housing data, I added an M3 chart that got a bit of attention. For those who don’t know, M3 is a broad measure of money in the Australian economy including all types of deposits in the lending institutions. As “loans create deposits” M3 is a good proxy


WA has no idea

On Wednesday, Delusional Economics posted a cracking article about a new mortgage product being offered by BankWest enabling first-time buyers to purchase a home with only a 3% deposit: First homebuyers will be able to borrow 97 per cent of a loan under a new Bankwest mortgage product. Bankwest managing director Jon Sutton announced the $500m loan strategy


Chinese house prices stall

Yesterday, the National Bureau of Statistics published the latest set of widely followed but wildly unreliable home prices indices for the 70 cities. For newly constructed homes, prices fell in 14 cities on a month-on-month basis (vs. 12 cities in June), while 17 cities recorded flat prices )vs. 14 cities in June).    On a year-on-year


August 19: Disastrous data

Rockets: Treasuries, $US, gold Smacked: Euro,  Aussie, grains, metals, CRB Thunderstruck:  energy 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 10 Year Germany


Do we have Dutch disease?

Well, obviously. But exactly what form it takes is open to question and fresh from the farm, Paul Bloxham of HSBC, takes the question on in a comprehensive new report. According to Bloxham, we aren’t ill at all (just as we have no housing bubble). However, we do face the following challenges: First, through banking


Trading Day

The S&P/ASX 200 closed today down 52 points or 1.26% to 4251 points. Asian markets experienced similar lossess, with the Nikkei 225 closing down 1.25% at 8943 points, and the Hang Seng down 0.5% at 20184 points. Other risk assets are mixed, with the AUD slipping against the USD, now at $1.0502, WTI crude down


Margin deleveraging

The RBA released the quarterly Margin Lending – D10 data tables today (XLS table), and its not a pretty picture for the Australian stock market. One of the key factors in a new bull market in stocks, just like property, is a propensity for investors to borrow more on expectation of higher earnings – alongside


The foolproof investment

I just noticed that the residex blog had a couple of interesting data tables containing the breakdown of growth in house and unit prices over various time periods according to their own indexes. Houses Area Median Value Growth Rent Sales Predictions 20 Years % p.a. 10 Years % p.a. Year Ending July 2011 Last Quarter