July 15 links: QE gone

Flat: gold, metals, grains, ore, euro, Aussie, $US, Smashed: CRB, energy 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 2

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Downgrading the crashed

If Macrobusiness readers are less than surprised by the downgrade of David Jones, the same cannot be said for the broking community. In their usual stampede to discover the self evident after the fact, they are turning very bearish. Sentiment, accordingly, is likely to turn ugly for the stock. Morgan Stanley says that there is


Hurtling towards a debt ceiling disaster

Another day passes without any progress in negotiations on raising the US debt ceiling… And the stakes are rising. From Thursday’s Wall Street Journal: Credit rating agencies moved closer to an unprecedented downgrade of the U.S. government’s debt amid deteriorating talks in Washington, with President Barack Obama abruptly walking out of a key meeting Wednesday with


Trading Day: 14th July

The S&P/ASX 200 fell slightly on the open, after digesting QE-easiness from overnight markets. The market has fallen further and is now 0.57% or 25 points lower just after midday to 4489 points. Other Asian markets are also down slightly, with the Nikkei 225 down 0.37% at 9926 points, and the Hang Seng down 0.22%


Property insiders losing faith

Typically, I don’t take much notice of the NAB quarterly property survey. It’s packed with industry representatives and as such risks reflecting the cognative biases so obvious across the industry. However, for the same reason, it is surely significant that the June quarter survey has printed a negative result, with even the property industry itself


Trade or bust

Overnight, volatility reinforced an old axiom to me that I used to use when I was doing the currency strategy thing full-time at NAB and Westpac. That is don’t mix up your time frames. When you are in a strategy role your job is to make calls on the market across multi-time frames and for different


Let retail burn

The MSM is full of shock and awe at last night’s David Jones profit warning. Farifax and News are as bad as one another. Of course, this is absolutely NO surprise to MB readers, who have known all year that retail is in the gun. The question now is should the sector be bailed out


Bernanke’s full testimony

Chairman Ben S. Bernanke Semiannual Monetary Policy Report to the Congress Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C. July 13, 2011 Chairman Bachus, Ranking Member Frank, and other members of the Committee, I am pleased to present the Federal Reserve’s semiannual Monetary Policy Report to the Congress (PDF). I will


Milky wilkies

What can I tell you? The great boob has delivered. The great baby is lapping it up. QE3 is coming! That’s the simple truth screamed by markets following Ben Bernanke’s testimony last night. The Dow went berko, the $US got trashed, gold hit record highs and commodities (oh commodities!) went limit up in everything from


July 14 links: QE dawn

Rockets: gold, CRB, metals, grains, ore, energy, euro, Aussie Smashed: $US 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 2


The case against home ownership

“The business of the United States used to be business. But somehow with all these Government programs, we turned the business of America into housing”… The above is just one of the great quotes from yesterday’s debate on Canada’s The Agenda (video below). The debate subject was The case against home ownership, and the panel


Is a rate cut coming?

Weak global markets, fears about European defaults, a weakening global economic outlook and business and consumer confidence that is very weak have all conspired to fundamentally change the market’s expectations about the course of interest rates in Australia. Here are a couple of charts which show what the market is now pricing into the interest


China booms on

This morning, Chinese National Bureau of Statistics published economic data for June and for the first half of the year. China second quarter GDP increased by 9.5% in real term over the same period a year ago, beating estimates of 9.3%, and slowing only slightly from 9.7% of the first quarter.  For the first half


Trading Day: 13th July

The S&P/ASX 200 jumped slightly on the open, after digesting a poor performance of overnight equity markets. The market is now .47% or 21 points higher just after midday to 4516 points. Other Asian markets have also up slightly, with the Nikkei 225 steady at 9926 points, and the Hang Seng up 1% at 21,882


The great immoderation

To what extent do share valuation trends reflect the rises and fall of economies and countries? That is the question that occurs when reading a report from Morgan Stanley’s Gerard Minack on long term trends. It says that the last 30 years were exceptional for shares: The past 30 years were exceptional, for a number


The rampaging golden bull

With gold almost rising to a new all time high in USD per ounce (Europeans get that tag for today) it’s time for another close look at the shiny metal. This will be a technical and chart heavy look at gold from a fractal viewpoint – i.e from the very long term (secular), then long


Lending finance not bad

ABS Lending Finance for May is out and the news looks better than Consumer Confidence suggests. All major categories (with the exception of leasing) rose modestly, with business finance looking strongest. These figures look more robust than the RBA’s credit aggregates for business lending, which showed a flat result for May overall. Nonetheless, there has


Consumer confidence smashed

The Westpac/Melbourne Institute Consumer Sentiment survey is out and boy it looks like Australians really do not like their new economy. Excerpts with commentary below. • The Westpac–Melbourne Institute Index of Consumer Sentiment fell by 8.3% in July from 101.2 in June to 92.8 in July. This is a surprisingly weak result. This is the lowest level for


Feeling QEeeeesy

Last night’s market action should leave us in no doubt. Equities and commodities are caught in a paradox of US Fed front running. The market rout emanating from the structural debt problems of the EU and US was arrested briefly last night with the release of new Federal Reserve minutes, which showed, unsurprisingly, a willingness


Chinese lending at trend

The People’s Bank of China just published the latest set of monetary statistics for June 2011. As of the end of June, M2 money supply reached RMB78.08 trillion, increased by 15.9% over a year earlier, vs. 15.1% in May and consensus of 15.3%.  M1 money supply increased by 13.1% over a year ago to RMB27.27


Not in my backyard

In 2002, the Victorian Labor Government launched Melbourne 2030 – a strategic planning policy framework for greater Melbourne aimed at reducing urban sprawl and car dependence by shifting new housing development away from Melbourne’s fringe (“greenfield development”) towards pre-existing urban areas (‘brownfield development’), where public transport is already established. Central to Melbourne 2030 was: the


July 13 links: Fed hope

Rockets: gold, CRB, metals, grains, ore, energy Up: $US Flat: euro, Aussie Contagion easing: 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


Melbourne leads supply glut

Following on from today’s post, Avoid Melbourne housing, SQM Research has just released its latest weekly newsletter  again showing Melbourne as the epicentre of the nation’s housing supply glut. According to SQM, Melbourne’s stock on market has increased a whopping 47% since June 2010 (see below table). The only ‘good’ news coming out of the newsletter is


Deepening crisis

Houses and Holes defined the growing Western policy chaos this morning and right on cue the new IMF boss Christine Lagarde has thrown her two cents worth into the mess that is Europe with comments this afternoon that the “IMF hasn’t yet discussed New Greek aid details with EU, nothing should be taken for granted


Pitchford makes a comeback

I make no secret of my disdain for the Pitchford Thesis, that doctrine that says that current account deficits (CAD) don’t matter in an era of floating exchange rates, so long as the resulting debt is in the private sector. This was the notion that led Canberran policy-makers to turn a blind eye to Australia’s


The trouble with mainstream media

One of the reasons I first started blogging was a feeling that the mainstream media is doing a terrible job educating people about some of the biggest issues that we face today. I suspect that most of my colleagues at MacroBusiness feel the same way. Having spent several years as a financial journalist earlier in


Trading Day: the sell off continues

The S&P/ASX 200 slumped again on the open, from the very poor performance of overnight equity markets. The market is now 1.7% or 77 points lower just after midday to 4505 points. Other Asian markets have similar losses, with the Nikkei 225 down 1.5% at 9914 points, and the Hang Seng down 1.75% at 21,957


Carbon companies

The release of the government’s carbon tax has had brokers rushing to calculate the impact on stocks. Much of it would already be priced in, of course, but now that it is (semi) official the effect on fundamentals needs to be assessed. Deutsche Bank says the impact on FY13 earnings will be modest for many carbon-intensive


NAB Survey: Retail hits GFC levels

The June NAB Business Survey again makes pretty ordinary reading with Australia’s so called two-speed economy, other wise known to the sane as Dutch Disease, turning virulent. Here’s the commentary: Domestic sector struggling to gain momentum as confidence slumps. Forecasts for growth lowered and rate rises delayed – reflecting current slowdown and, in the medium


The Macarthur Coal bid

MacArthur Coal (MCC) has received a take over bid from US energy company Peabody in conjunction with ArcelorMittal – the world’s largest steel maker.  The offer is for $15.50 per share, minus whatever dividend MCC pays this year. MCC has three operating coal mines which are all situated in central Queensland – Moorvale, Coppabella and