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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:

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Nothing bold about that.

With a bit of hope we read the first paragraph. ANZ Banking Group Ltd chief Mike Smith has called for bold economic reform, saying Australia’s growth cannot be sustained without a leadership push to liberalise markets and improve productivity and innovation. Yes !! Finally one of the banking Admirals admitting that pinning Australia’s hopes to

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RBA and the soft landing theory

We note the RBA has released the minutes of its RBA meeting today, and the news still is not good for the indebted. In the central bank’s minutes of its October 5 board meeting, during which it surprised the market by keeping the official cash rate steady at 4.5 per cent, the RBA said members

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Can you find the exit nearest you ?

We have discussed the declining prospects for Oz housing over the last few months as it becomes apparent that the last decade of debt driven government supported growth looks like it is finally coming to an end. Without further government intervention the market seems destined to take the tour towards the bottom. This is a

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The gold bubble

Ten years ago, when the NASDAQ bubble came a-cropper, this blogger was a day trader. And yes, like many others it took a bath. It was an invaluable lesson. It offered an inside glimpse of bubble psychology. How a market can dislocate and seize the collective imagination. And how, afterwards, the whole thing appears so

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Links Oct 19: Gold rush

ROK joins gold rush. FTGold over the long run. EconompicGold’s bull market. PragCapWhen the gold bubble bursts. FTFed wants equities bubble. David RosenbergAnd from 2009, when Greenspan confessed the same. FTBut can only get it through emerging markets. Doug NolandWho’s buying the US Treasury’s in the UK? (take a guess) Zero HedgeROK rocked by currency

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QE2 and the stink leaking from the pit

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. Earlier last week we asked: The loans on these foreclosed properties were on-sold ( in some cases many times ) into the

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Simple Solution .. Decriminalise crime

In the ongoing story that is the US housing debacle we noted on the weekend that the banking analysts have decided the best outcome for everyone is to decriminalise any crimes that the banks or their agents may perpetrated. There is also a persistent concern that the crisis could cast a pall over the fragile

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Oversupply of Oversupply

It only took one real estate agent to claim “we have a problem”, now they can’t stop themselves. We noted over the weekend that Western Australian Real estate agents have now decided they can declare their issues too. HOUSE prices in Perth are on a downward trend with sellers reducing asking prices by 6 per

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Enemy mine (updated)

Any regular reader of this blog will know two things for certain. The first is that it is intensely concerned about the effects of Dutch Disease. The second is that it finds Ross Gittins’s smug baby-boomer prattle intensely annoying. So, when you put those two things together, spleen hits the screen. From Gittins today: Our

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Links Oct 18: Give me Dutch Disease

Gittins all in for Dutch Disease. Ross Gittins, Alan KohlerParity porn from the Treasurer. SMHI will post on these three later today.ForclosureGate smashes everyone. Megan McardleWeek ahead for the DOW. Calculated RiskSolving Ireland’s pain. Businessweek, FT AlphavilleSun King shadows Obama. FTDot-com over again. Robin BrombyBan these now. FTOPEC and the weak dollar. AFPShark chewing through

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BHP to get shafted?

And now for something completely different. As you know, BHP is bidding for Canada’s dominant potash producer, PotashCorp. On Saturday, the only other mooted bidder, Sinochem backed out. So the way is open for the Big Australian. Or is it? This blogger had a spare moment to peruse the Investment Canada Act and its National

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One graph to rule them all

Say no more !! ( from the RBA ) Hat tip to traveller. 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 it seems to make sense,

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Weekend Reading: Currency war, but not here

Currency crisis is now. AlphavilleAnd how. Michael HudsonRoubini agrees. Nouriel RoubiniNow it’s bovine shrinkage. FT Don’t worry, keep eating, little sheep. Barf. Ross Gittins2008 redux complete. Banks smashed. All else up. Bloomberg Bill Gross telegraphing MBS bailout. Zero HedgeBut baby steps on QE2. FT, Calculated RiskPhysical-backed metal ETFs. Be afraid of this. ETFdbQuarterly ore contract

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Here comes the oversupply.

As we talked about way back in May, at end of every bubble there comes an admission that the “undersupply” of housing was in fact a debt driven myth that only really existed because there was an oversupply of speculators. As the market collapses these people disappear and all of a sudden there are too

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Tasmania joins Qld and WA..

In what has become an almost inevitable conclusion we note that other states are joining Queensland and Western Australia into the pit of despair created by reckless economic delusional stupidity. TASMANIA’S real estate industry is at its lowest ebb since the economic doldrums of the late 1990s, industry veteran Deanne Lamprey believes. Research by The

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Fitch as a fiddle

This week’s Fitch report on stress-testing the banks in the event of a housing crash has produced a muted response but one divided equally between consternation and joy. On the one hand, the idea that Australia can escape a 40% house price crash with a simple $15 billion loss, divided between banks and mortgage insurers,

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Blame it on the chicks

Jessica Irvine of the SMH takes on the bubble today and, well…lets down her sisters. According to Irvine: The basic argument of bubble theorists is that prices must return to their historic average as compared to incomes. On most measures, house price growth has far outstripped growth in incomes. The crudest way to measure this

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Links Oct 14: Ship’n steel

We’re rich. Econompic.And here’s why. EconompicOre spits upward from cup and handle. BloombergRio at capacity. ReutersFortescue not. Steel OrbisPort Headland powering. Steel OrbisFor how long? ReutersUS bank CDS foreclosed. ZeroHedgeMore on ForeclosureGate divergence. Abnormal ReturnsMore ForeclosureGate than you can handle. Barry Ritholz Emerging market bubble. NYT and Henry Thornton (from recently)No bubble. Yes bubble. Yada,

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Still building the housing time bomb

The first page of the housing time bomb recipe reads. Ingredients: Unrestrained credit growth Central Bank denial Government incentives Government intervention. False promises; containing 1 parts population, 1 part underlying demand and 1 part undersupply. Method: Allow unrestrained credit to outgrow income by a factor of 6 adding government incentives and central bank denial as

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De-securitisation.

As we mentioned a few days ago about the next stages of the US housing debacle. The loans on these foreclosed properties were on-sold ( in some cases many times ) into the MBS market. Given that the title documentation was not legally complete, then this should never have been allowed to happen. If there

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The effects of QEII

Yesterday Karen Maley parroted a newsletter from Hoisington Investment Management that argued that efforts around QEII “…may not prove any more successful than their previous attempts. Even worse, they may prove extremely harmful.” According to Maley, “The authors point out that the most likely outcome is that it fails to boost economic activity: “It should

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Bust or flatline?

Two recent stories have this blogger reconfirming its assessment of the bust ahead for Australian housing. It has argued that we are facing not the ultimate Waterloo for the bubble but a replay of 2003, when the first FHBG inspired frenzy ceased. As it has argued before, the dynamics then were similar to now, the

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Question to our Australia based readers.

For some reason we are seeing US political campaign ads on our blog today even though we are viewing from Australia. Is anyone else in OZ seeing them? They are actually quite surreal, and an interesting demonstration of the difference in political culture between Australia and the US. Disclaimer: The content on this blog is