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Corporate dissonance

According to Elisabeth Knight at the SMH: If BHP’s management is to be criticised for this offer it should be on the basis of potentially under- estimating the political backlash from the Canadians. It is too early to make that call, given the final adjudication has not yet been made. BHP knows from recent experience

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4

No wood, all trees…

According to Banking Day: In a speech to a Finsia financial services conference, [RBA boffin Luci] Ellis argued that far from being complacent about a bubble, the RBA was searching for danger signs. But, she said, it was important to go beyond statistical averages to understand the housing market. As an example, she set out

6

US Housing Market: From Bad to Diabolical

We all know that the US housing market is in bad shape. Following the onset of the sub-prime turned ‘Global Financial Crisis’ (GFC), US house prices have tanked to be near their long-run trend: Some markets where supply restrictions were present – most notably California, Nevada and Florida – have fallen hardest, whereas those with liberal land

3

Unpleasant scenarios

The blowoff in gold and oil must mean that we are rapidly approaching the zenith of this charming QE2 rally, which has morphed swiftly into outright currency war. Helicopter Ben is now completely boxed in by the stock market which has rightly interpreted his Jackson Hole pledge to print money “if” needed as a rock

1

Housing velocity

Population growth is often cited as a causal factor in the overvaluation of Australian real estate. And indeed, strong population growth is a factor, particularly in recent years when housing starts have diminished, most especially in NSW. But one infrequently quoted housing statistic that calls into question the strength of population growth causation is what

15

Kohler Turns Spruiker

Has anyone else found Alan Kohler’s recent spruiking of Australian residential property annoying? Twice in the past week Kohler fronted  the ABC News Finance Report claiming that Australia has a chronic housing shortage that would prevent house prices from falling. In Kohler’s first finance report, from Monday 27 September, he provides the below chart (shown from 1.18 in the video) claiming that Australia’s housing shortage will reach a

5

Is Aussie Mac real?

Robert Gottliebsen today takes on government guarantees of Australian banks. It is more than welcome that this topic gets greater public scrutiny. It is nothing short of bizarre that the very foundation upon which Australian banks operate has shifted and yet we carry on as if nothing has changed. Nonetheless, there are a series of

14

The CentralBankopian perspective

Given quite a few articles we have been reading over the last few weeks, we have decided it is time for another little visit to CentralBankopia and get another perspective on things.If you are not already aware of CentralBankopia we recommend you firstly read this and this and this Most traditionally educated economists and economic

8

Canadian Housing: Another Debt-Fuelled Bubble?

Canada and Australia have a lot in common. Both economies are commodity exporters. Both countries largely dodged the global recession that has recently shocked the developed world. And both countries are said to have world-beating banking systems, with Canada’s ranked as the strongest and Australia’s ranked third strongest in the world by the World Economic Forum’s Global Competitiveness Report 2009-2010. As

22

Safe as (straw) houses

Whilst I was on vacation escaping the bitter Melbourne cold, Morgan Stanley Chief Strategist, Gerard Minack, released an excellent research article on the Australian housing market, entitled Living in a Bubble. Mr Minack’s article received widespread coverage in the press (for example, see here and here), so it is likely that many Australian readers are aware of his analysis already. And fellow

15

China’s Colossal Housing Bubble

There has been a lot of reports recently that China is in the midst of a colossal housing bubble. In March this year Edward Chancellor, financial historian and bubble expert from Boston-based global investment management firm GMO, released an article entitled China’s Red Flags (available on the GMO website after registration). In this article, Mr Chancellor offers a checklist for

1

Cliff or plateau?

This week saw the release of the RBA’s June credit aggregates, as well as the first concrete evidence that house prices are rolling over from RPData. Neither was terrifying but neither also was reassuring. As usual, the mainstream media offered up a plate of bullish slop, preferring to quote quarterly growth figures over the much