Links November 30th

Global Macro: This is a bear market in disguise says Richard Russell Business Insider some disguise Reading the market through beer goggles James Montier via Pragmatic Capitalism 10 Themes for 2013 – brought to you by the Squid Business Insider – guess: growth, printing, yield chasing, etc. The Americas: Pending home sales rise in October

Latest posts


Capex triggers renewed talk of rate cuts

Find below Westpac’s and ANZ’s takes on today’s capex report. Both fall in behind my assessment of the release earlier today and both are calling for a December rate cut. The same is apparent at the AFR. As I said earlier, the report was one for the doves. Quick Reaction – CAPEX Q3.pdf er20121129BullCAPEXQ3.pdf


New house sales fall again, units boom

From the HIA: New home sales climbed off the mat in October following a very weak period in mid-2012, said the Housing Industry Association, the voice of Australia’s residential building industry. “A 3.4 per cent increase in new home sales in October is a modest result, but at least it is a move in the right direction,”


Spain’s banking migraine

Back in July this year I mentioned that the new Memorandum of Understanding for the bailout of the Spanish banking system was going to include a special purpose vehicle  ( a “bad bank” ) which would allow the banking system to offload non-performing assets. In October I posted on the structure of that bank, which would


Treasury softens up SMSF for regulation

  By Chris Becker The Treasury has added to the campaign to take the “self” away from Self-Managed Super Funds (SMSF or DIY) with some very interesting comments coming out Association of Superannuation Funds of Australia conference yesterday. From Fairfax: THE head of the federal Treasury has warned that self-managed super funds have become so popular that


Rio cuts (but what?)

But what exactly? The AFR and BS are reporting it’s all about productivity: Rio said it had boosted the size of the expansion plans to 360 million tonnes from 353 million tonnes previously through de-bottlenecking and productivity improvements with minimal spend. It has a current production capacity of 237 million tonnes and expects to reach 360 million


Macro Morning: Fiscal rollercoaster

The fiscal cliff roller coaster continued overnight with early stock market losses in Europe and the US reversing after  Republican leader and House Speaker John Boehner said that he is willing to put revenue on the table and is hopeful that a deal can be done over the fiscal cliff. This helped stocks turn around


APRA to apply ‘too big to fail’ charge

From Banking Day: The Australian Prudential Regulatory Authority has finally confirmed that it will impose additional capital requirements on Australia’s biggest banks. Speaking at an Australian Financial Review conference in Sydney yesterday, APRA’s chairman, John Laker, was reported as saying APRA would apply tougher capital requirements to domestic systemically important banks, or D-SIBs. An APRA


Sales crash in Melbourne housing estates

By Leith van Onselen The Age’s Chris Vedelego continued his fine form in a report yesterday on the looming disaster facing new housing estates on Melbourne’s fringe. Below are the main extracts, although I highly recommend that you read the full article for yourself: Melbourne’s outer-suburban property market is facing a serious slump as distressed


Swiss pile into Australian dollars

From Bloomberg comes the news that the Swiss are buying Australian dollars as a part of an explicit mercantilist strategy: The Swiss central bank pledged to keep defending its franc cap and left borrowing costs at zero to protect the economy from “exceptionally high” risks as the euro area’s crisis intensifies. …The central bank, which


Banks call the housing construction bottom

By Leith van Onselen The release yesterday of quarterly construction data by the Australian Bureau of Statistics (ABS) seems to have piqued the interest of Australia’s banks, who were quick to call the bottom of Australia’s housing construction downturn and proclaim the beginning of an upswing. From Property Observer: Westpac says the September quarter figures


Links for 29 November 2012

Global Macro: SocGen’s 2013 Global Investment Outlook – Business Insider Safe or junk, bonds in bubble trouble – Reuters The Americas: California Shows Signs of Resurgence – New York Times Federal Lending Push Swells Student Debt – Wall Street Journal Fed’s Evans wants more easing, Fisher wants limits – Reuters Fed: Consumer Deleveraging Continued in


ASX Shares Daily – November 28th

By Chris Becker Uncertainty from US markets overnight extended into Asia with the ASX200 the best off (Ok, NZX50 was up) only down 0.2% or 9 points recovering from its recent dip – check out below for a full roundup below. The Nikkei 225 came off by over 1% mainly because of the USD/JPY cross which has been overbought


APRA: Housing a structural problem

From the AFR‘s little banking event today comes the following from John Laker, head of APRA: 1.11 pm: Commenting on some of the items on the regulator’s agenda, Laker says APRA’s focus includes keeping credit quality standards in place and keeping a close eye on liquidity levels, among others. We will be talking to the institutions


NAB online sales index accelerates

From NAB: National Australia Bank’s (NAB) latest Online Retail Sales Index was released today valuing online sales in Australia in the year to October 2012 at $12.3 billion. The rate of online growth has strengthened considerably over the past six months, growing by 26% year-on-year compared with just 14% year-on-year in May. The Index found


Greece leads Europe’s economic decline

So Greece got a deal yesterday and , as expected, it was a range of financial and political concessions that will provide temporary relief  in the hope that it will fall off the radar throughout 2013. It must be remembered, however, that this is the second major adjustment to the second bailout for Greece which


Macro Morning: Caution

It was a positive day for most of Asia and Europe with stocks up and the US dollar on the retreat after the Greek deal was announced in our morning yesterday. But US traders preferred, or had no choice, but to worry about the fiscal cliff. It would be easy to dismiss what seems to be


Daily iron ore price update (Nev powers back)

Here is today’s iron ore complex chart, where the correction continues: And the chart: Still no spread compression, which tends to happen during decent corrections,  so plenty more downside potential for spot. Today’s news is the fightback offered by Fortescue’s CEO, Nev Power, yesterday. From The Australian: FORTESCUE Metals Group chief executive Nev Power has


Much ado about an OECD nothing

The OECD released its November economic outlook last night. It included a full two page summary of the Australian economy, enough to trigger a frenzy of hand-waving and hand-wringing across the media. The OECD said with admirable brevity that: mining will be OK next year the dollar will stay high we need tax reform to


Grantham on the end of (growth) days

Jeremy Grantham’s November newsletter is out and is another suicide note for the world, this time aimed at the limits to Western growth. Sadly, Grantham’s insights cannot be dismissed lightly so I suggest reading this with a stiff drink. On the upside, as a net commodity producer, Australia is better placed than many but it


FLNG reveals all

The great LNG whine got more interesting this morning. From The Australian: WEST Australian Premier Colin Barnett has confirmed for the first time that Royal Dutch Shell is pushing to develop the enormous Browse gasfield through its revolutionary floating liquefied natural gas solution, as tensions between the state government and the international oil and gas giant


Finally some much needed auction reform

By Leith van Onselen This week’s SQM Research Newsletter contained some welcome news for those that believe Australia’s property auction system is rigged and in dire need of reform. Here’s SQM’s managing director, Louis Christopher, explaining the changes taking place: “There have been some big developments in recent days over auctions, which I think is


NZ’s economic omen for Oz

By Leith van Onselen Please find below an interesting economics research note from the Bank of New Zealand (BNZ) on the growing economic imbalances developing in the New Zealand economy, which is encapsulated by the -11% fall in exports over the past year and the 33% increase in home sales. The note provides a stark