12

The sickening state of modern real estate reporting.

Yes, we know it is Christmas season, and we are supposed to be having some Christmas cheer, but the vested interest dribble passing off as news in the Australian newspapers is bringing us to the point of vomiting on ourselves. The real story about the current property market in Australia is that young people are

Latest posts

0

Happy Debtmas

Fitch is once again reporting on mortgage stress on the run up to Christmas. Overall, delinquencies have considerably increased across all six states in Australia. As of September 2010, 1% of borrowers were one month or more behind on their scheduled balance. Delinquent borrowers tend to be in arrears on higher-than average outstanding loan balances

4

Risk 2011

For those that don’t know, every year Saxo, a Danish investment bank, publishes a list of ten “outrageous predictions” for the following year. This year’s are out and they contain a nasty surprise for Australia. At number 5 is this little doozy: AUSSIE-STERLING DIVES 25%The UK returns to the values of the old days; they

1

Links December 21: China in 2011

What is credit creation. Qfinance (h/t nakedcapitalism)Ten economic questions for 2011. Calculated RiskOther big bond moves. Alphaville Brazil financial crisis. BloombergContagion today: IrelandChinese chess. Weekly StandardGold rush. BloombergChina cracks down on land prices. China DailySaxo’s ten outrageous predictions for 2011. AlphavilleChinese growth for 2011. Michael PettisDon’t buy commodities. AlphavilleDon’t buy the Aussie. BloombergShift 25% of

9

China: the Bull Case

A reader has sent me the below email, which comes from the President & CEO of CapitaLand, Mr LIEW Mun Leong, and was sent to all staff in July this year. CapitaLand has apparently been the major residential developer in China for the past 15 years. The email presents a rather bullish view of China,

2

RPData admits it has all gone bad lately

In what can only be described as a “turn up for the books” RPData’s latest newsletter is heavy reading for the property bulls. Australia’s housing market changed direction in June 2010 according to rpdata.com research director Tim Lawless. He confirmed that capital growth actually ground to a halt on the back of seventeen months of

3

Still can’t see the debt for the trees

As we have been concentrating on recently the fall in debt issuance is having a dramatic effect on the economy. Only today we note that the trend continues. The value of credit and debit card transactions dropped for the 12th straight month in November, but retail broker CommSec says there’s light at the end of

7

Up against it

The RBA’s great experiment of attempting to shift Australia from unproductive investment and overspending to productive investment and saving is about to confront a new challenge. One of the more powerful sectors in the gun is retail. The rumblings of household heros such as Gerry Harvey and Solomon Lew are congealing into an RSPT-like campaign

0

Links December 20: Retail rent-seeking

Here comes the retailing rent-seekers. The Oz, SMHFinancial vs sovereign interests. Michael Hudson (h/t nakedcapitalism)Before you get too excited about the US ‘recovery’. Calculated RiskWeek ahead for the DOW. Calculated RiskThe 2011 bullish consensus. Bespoke, EconompicWhy long rates are rising. macroblogNo more immigration. Gittins!Haunted by slowing China. The Age

3

China Bubble: More interesting data and analysis

Following on from my earlier post on China’s empty cities, more interesting analysis and data has come out about China’s bubble economy. These reports seem to add further weight to recent bearish arguments put forward by Jim Chanos and Vitaliy Katsenelson (amongst others). First, Dan Denning has written a cracking post in the Daily Reckoning explaining how China’s

7

Regional Queensland choking on years of oversupply

It seems the news about the collapse of the Queensland property market is coming in thick and fast. On Thursday we had the news from the Gold Coast that a $850 million dollar complex had fallen into receivership due to trouble with settlement of over 80% of the units. Today we note another startling piece

1

Anecdotes of debt issuance contagion in retail.

As we have been talking about lately, as the level of debt issuance falls in a debt driven economy then slowly but surely the effects flow from the market driven by that debt to the wider economy. As we noted this week, the Gold Coast is the frontier of this contagion, but it is also

0

"Return to normal" coming and a BDI revisit

Not many e-mails this week that contain topics that we haven’t already discussed, but still a big thanks to everyone sending us e-mails with comments and topics that they would like discussed.Given that it is Christmas next weekend the mailbag won’t be back until the new year. In the meantime a couple of interesting things

0

Weekend reading

Merkel wins, Europe loses. EurointelligenceEQE ramp for Spain. TelegraphContagion today: Ireland, Italy, US inventory rebuild done. And how. Zero HedgeUS leading indicators going nuts. ECRI, LEIMultipolarity is here. Phillip StevensChina’s aircraft carrier. FTInflation under control says China. FTWA surplus boom on ore. SMHBank’s crocodile tears. Michael WestMore ore. Robyn Bromby

5

Something that seems to have been ignored by others.

On Wednesday we noted this NAB chief Cameron Clyne said that the treasury and the RBA don’t know what they are on about, and that the banks should move their cash rates independently of the RBA so everyone understood that they were no longer linked. Once they had done that everyone would understand it, and

3

Illiquid

You can see what regulators have been trying to do for eighteen months. And clearly, they are well intentioned doing it. Having reduced Australian banks’ reliance on short-term funding by $140 billion or so, pushed up interest rates and talked down housing, and recently pushed back a credit-mad government, they have now announced a new

1

The GC moves to the next level

We have said previously, as credit issuance falls the market collapses, this in turns takes down businesses , which takes down the economy and then the banks. As we showed last week credit issuance in Queensland has been trending downwards since the GFC. Now that the short-lived government supported debt bubble caused by the first

3

AOFM risk

As Delusional Economics mentioned in his brilliant assessment of the senate inquiry into banking competition yesterday, the AOFM very recently supported a Wide Bay Ltd securitisation. Wide Bay is a largely Queensland based building society with considerable exposure to the Gold Coast and Cairns. Needless to say, ground zero for the correction that is underway

4

Links December 17: US recovery

Buiter of Europe. AlphavilleUS bad news. Good news.Growl of a bear. Zero HedgeIs America sick? ReutersCommodity speculation. PragCapFarm bubble. BPACommodities for pros only. Gavyn DaviesLapping up IMF drivel. SMHChaney defends sovereign rating. Of course. NAB’s sunk without it. The OzToday’s contagion worst in: Spain, Italy

0

Goodbye and Good luck to a fellow blogger

We noted today that a fellow blogger has signed off to pursue other endeavours. We just thought we would say a final goodbye and a big thanks to Cameron as he was a big influence and a great help to this blog in the early days. Hopefully he will start a new blog in the

2

The flog just can’t help themselves

We note today that even in the face of overwhelming evidence to the counter, the Australian mainstream flog just can’t help but repeat the same dribble that is being proved wrong right in front of their eyes. The frightening state of negative equity is looming large in some regional centres and in areas that have

3

The great straddle inches wider

In the last two days, both the FT and WSJ have carried stories about a burgeoning global trade in the yuan. The FT was first out of the blocks: In spite of its infancy, interest in the market is growing quickly. Caterpillar, the US-based maker of earthmoving equipment, launched a Rmb1bn ($150m) bond issue last

2

Link December 16: US data

Bullish Roubini. But more QE. TelegraphBullish Tim Duy. But no more QE. Tim DuyWhen will the Fed hike? EconompicChina cash squeeze. Zero HedgeChina still pilin’ into Treasuries (via UK). Zero HedgeChina’s empty cities. The Unconventional EconomistGermany stiffens against bailout. BloombergContagion today: Portugal, GreeceGlobal mining boom. FTOil joins the rush. BarchartWine gets Dutch Disease. SMHDeclining productivity.

2

The circus so far.

The senate enquiry into the banking sector has been rolling along for a few days and seems to have become a bit of an embarassment for the Treasurer as it is getting harder and harder to find anyone, on either side of the fence, who thinks any of his latest ideas are any good. But

18

China’s Empty Cities

In an interview last week on CNBC, Jim Chanos said the following about China: “Construction is 60-plus percent of GDP, compared to exports of 5 percent… The problem is that consumption as a percentage of Chinese economy has declined in the last 10 years, from 40 to 35 percent. It’s all real estate…When construction is 60 percent

4

Gittins!

Regular readers will know that this blogger’s arch nemesis is Ross Gittins! As a member of Generation X, some of that enmity arises from the naturally hostile posture one should adopt towards ones baby-boomer betters. But, in all honestly, this blogger cannot hold himself entirely responsible for his Gittins! rage. The man himself must take

4

Pascoe’s bank failure

Michael Pascoe has an entertaining piece today on banks. He begins with the sharp observation that once again this Labor government has completely stuffed the politics of reform: For the usual petty political reasons, Wayne Swan dumbly tried to pre-empt the Senate banking competition inquiry – a decision that has come back to bite him

3

Is Victoria going for bust?

Today we note once again that the oversupply in Victoria is in the news. Thousands of off-the-plan apartment buyers could face losses as a glut forces many Melbourne projects into limbo. Two major property players have broken industry ranks to warn buyers about an oversupply of poorly located apartments in the development pipeline aimed at

1

Symond versus Laker

Yesterday at the Senate Inquiry into bank competition John Symond, the household name behind Aussie Home Loans, gave the new banking reforms a roasting. Symond, the jocular non-banker renowned for his forthrightness, delivered on cue: I’m disappointed that the Treasurer, in announcing his initiatives, has failed to consult with that sector that brought on competition,

7

Links December 15: China readies yuan

Global yuan trade. FT, WSJUS/China trade pressure. FTHedge funds are psychopath factories. HBR (h/t nakedcapitalism)US retail approaches 2007 peak. Calculated RiskOn petrol prices. EconompicExposure to PIGS. Zero HedgeContagion rife: Ireland, Portugal, Greece, Spain, Italy, Belgium5 biggest 2011 risks. PragCapMore credit juice for China. FTSoros backs Munchau plan for Europe. FTGittins: No Dutch Disease, commodities boom