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Paul Krugman versus the world

Paul Krugman has set off a storm of debate in the US blogosphere this week, with a post in the New York Times that raised the possibility of hyperinflation in the US. Right now, deficits don’t matter — a point borne out by all the evidence. But there’s a school of thought — the modern

Latest posts

1

Too pricey for M&A

One of the recent stock market puzzles is that, since it became obvious Australia would not be hammered by GFC, there has not been a significant rise in M&A activity. Over $100 billion in capital was raised on the market in response to the GFC. The supposed reason was to “maintain balance sheet strength” (translation:

12

Quantitative unease

Any critical analysis of the period leading up to the GFC lays some of the blame of the bubble that built at the length of time that Chairman Greenspan left rates in the US incredibly low after the September 11 attacks. Certainly there were many other and much more important drivers of the debacle that

4

March 30 links: Rolling on

Up: Aussie, ore, grains, energy. Flat:  $US, metals. Libya’s future. FT Yemen. Reuters Syrian government resigns. FT QE2 will run its course. Tim Duy US real house prices. Calculated Risk Covered bonds headed for Level 1 liquidity status. Alphaville Yang Hengjun goes missing. FT, John Garnaut We sell them dirt but throw in bloggers. Oil risk is upside. PragCap Groundhog Day

44

It is 2008 again

It is beginning to feel eerily like 2008 in Queensland. In case you were asleep back then this is what was occurring in the land of real estate. Average house price values have fallen for the first time in 17 months as interest rate hikes begin to bite. Prices across the nation’s capital cities fell 0.7

17

Leigh Harkness on debt saturation

In a follow up to his previous post please enjoy Leigh Harkness’s latest guest post on “Debt Saturation”. Many years ago, I tried to identify the relationship between money and inflation. I could not find a general rule for all situations, but for certain countries who adopted “pure” float, I found that inflation was equal

3

Telstra – still a telegraph pole stock

The Future Fund announced recently that is has reduced its holding in Telstra (TLS) to below 5%, and is still selling. Future Fund, I salute you. TLS is still a telegraph pole stock – as in, any sane, rational investor shouldn’t touch it with a ten foot or even a telegraph pole. In this post,

25

The aliens have landed

An alien has landed in Australia and is confusing the hell out of everyone. That alien’s name is lack of system growth. In the old system, as the pie got bigger, there were no losers, only degrees of winners. Corporations in Australia’s dominant finance, realty and retail sectors could swap 2 per cent market share

2

March 29 links: Trouble in paradise

Up: Aussie, ore. Flat:  $US, grains. Whacked: energy. Double top on the CRB? Radioactive pool found. NYT, Kyodo News Latest Japanese supply chain decoupling. Zero Hedge Is intervention right in Libya? Guardian. (h/t Naked Capitalism) Syria won’t fall. Roger Shanahan Portugese yields hit record. Bloomberg The Bernanke oil shock paper. Zero Hedge The GFC trade collapse. Alphaville China’s huge copper

19

The bulls circle the wagons

Today on Smart Company, Craig James of Commonwealth Bank offered this brief article: The Reserve Bank Governor was asked a question on Australian home prices when he delivered a speech in London on March 10. The comments weren’t well reported, but he highlighted the fact that home prices aren’t rising strongly at present, that arrears

4

Tough day for banks

Banking Day today has a string of interesting articles that dramatically underline the increasingly dour future for the major banks, not to mention the broader services deconomy. First up, the possibility that the banks will, after all, be dragged into the new international measures demanding extra capital for systemically important financial institutions: Global financial regulators

13

Should the RBA sell the Aussie?

As readers know the AUD/USD exchange rate hit a new post float high of 1.0290 on Friday night and it seems that traders and investors just can’t get enough of what I used to call the “battler”. This non de plume was one that many of us in currency land used to call the Aussie

8

Retail woes

Picking the direction of retail demand is an issue assuming considerable importance for investors in the stock market.  It is a matter of deciding between two reversions to “normal” behaviour — consumption norms or savings norms. Many brokers are anticipating that consumer demand will be lower, but return to normal, which is why they have

0

March 28 links: Dollar dazzler

Rebels move west. Bloomberg Mission Accomplished. Barack Obama Ugly radiation. Zero Hedge Ireland going for haircuts. Reuters UK folk going for broke. FT Week ahead for the DOW. Calculated Risk Bullard swings to QE2 end. Bloomberg Uber-hawks now control Fed. Jack Barnes Wartering down Dodd-Frank. NYT Corrupting covered bonds. FT ASIC shrinking. SMH Dollar to

21

Now it’s on the box

It is sunday so I will keep it short. I know this isn’t new to anyone who has been reading my posts for any length of time. But as a good friend of mine used to say “it isn’t real until it is on TV”. I suspect this is just another piece of strategic capitulation

26

The trouble with fund management

Open the money section of any newspaper and you will be bombarded with stock tips, tables of the best performing funds, and interviews with fund managers who claim they are “beating the market.” Most of this advice and commentary is misleading at best, and, at its worst, downright dangerous to your financial health. In fact,

2

Weekly Market Analysis: Risk is up!

The S&P/ASX200 index closed 0.91 per cent higher to 4,742.6 points on Friday, after a strong rebound rally. The index is up 116 points or 2.5% for the week, but still down 1.75% since the start of March and no movement at all for the year. For a primer on how I do my analysis,

19

Hyper-inflation is here

Last weekend, the MacroBusiness New York bloggerspondent, Rotten Apple, mounted an interesting critique of the dominance of neo-liberal economics in the face of mounting evidence to the contrary.  It details the hypocrisy of our times: how a global debauch by the financial sector — one of the most irresponsible collective acts, or thefts, ever seen

4

Weekend Reading: Two-pace, two-face, too much

Rockets: $US, Aussie. Flat:  Metals, energy, grains. Fukushima bleeding. New Scientist Not over. BusinessWeek Why I now love nuclear. George Monbiot Now Syria. FT Bahrain simmers. FT Endgame chimera. Paul McGeogh Oil to stay high. Credit Writedowns Is Spain next? WSJ IMF loosens the purse strings. Zero Hedge The RBA is very happy. The Source The FED’s lovely

14

Tick Tock goes the clock

For those of you who don’t happen to live in Brisbane you probably will not know who Michael Matusik is. He is an old property bull turned bear who then picked up a job as the property blogger at the Courier mail. It seems however that his time at the newspaper has spurred him back

16

Here come the rate cuts, not

From Banking Day: The Australian Government will set the cap on the percentage of assets that can be used to support covered bonds at eight per cent, the Financial Review reports – up from the cap of five per cent suggested by the Government back in December. For some weeks, talk in banking and government

5

Two-up on the Aussie

Years of experience in financial markets has taught me never to crow to loudly on victories as Hubris is an always close stalker. But equally I’ve learnt not to despair to much if you get it wrong. That’s what stop losses are for. There are two sides to every trade and my selling sees someone

60

The carbon tax bunyip (updated)

When Tony Windsor, MP, said that he would like to see the carbon debate in this country move beyond the words “tax” and the word “lie”, it really struck a chord with me. We seem to be stuck in this Groundhog Day style conversation where each issue is immediately translated into a one line pro

18

That’s not a first home owner grant!

This is a first home buyer grant. From the UK Telegraph: [A] controversial new mortgage deal is being launched by five local authorities and backed by Lloyds Banking Group, one of the lenders bailed out by the taxpayer during the credit crisis. The scheme is aimed at struggling first-time buyers who are unable to afford the

1

March 25 Links: Tax flack

Rockets: Aussie, grains. Up:  Ore. Flat:  $US, metals, energy. Struggle at Fukushima goes on. Bloomberg Toyota, Honda extend shut downs. Detroit Free Press Portugese debt. Alphaville, Bloomberg Suppressing Tripoli. FT Sorry, can’t buy the rebels oil. Alphaville MENA crisis and Egypt stocks. Money Game Good, bad US data. Bloomberg Trashing the inflation panic. Tim Duy Era of cheap China

1

Oh, that’s what he said

This morning I posted a message from a reader about statements by the member for Gaven. I said at the time I couldn’t find the transcript  of his statements so I couldn’t verify the claims. Well our reader has got back to us with some more information, and what Alex Douglas actually said is even

14

RBA warns banks on expanding risks

Back in March 2009, former Reserve Bank Governor Ian Macfarlane gave a now famous speech in which he outlined why Australian banks had avoided the worst consequences of the GFC, because of dumb luck. One of his principle insights in drawing this conclusion was that the banks had benefited from the ebbing of competitive pressures

1

Gold: Global currencies and demand

Guest post from The Bullion Baron An interesting article was posted on Mineweb earlier this week comparing the performance of Gold over several currencies. The 4 currencies it was compared in were the US Dollar, Renminbi, Indian Rupee and Euro. With the growth of three tied so closely it was almost just a comparison of

10

What did he just say?

We received an e-mail from a reader last night about something they had heard on ABC local radio in Brisbane as they were driving home. On the way home from work today, on 612 ABC Brisbane’s news, there was a story about the member for Gaven, Alex Douglas (shown above) suggesting that the state and

0

Rio’s iron cross

Rio Tinto is complaining that governments are seeking rents when the rents should obviously go to Rio Tinto, as my co-blogger Houses and Holes pointed out. More pragmatically, is the stock accurately priced? Brokers are mostly putting buys on it, because that is the obvious thing to do. Yes, its very, very big — big