27

Sydney investors drive housing finance

ABS Housing Finance for Spetember is out and shows some recovery in the headline numbers: SEPTEMBER KEY POINTS VALUE OF DWELLING COMMITMENTS September 2011 compared with August 2011: The trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 0.9%. Investment housing commitments rose 1.0% and owner occupied housing commitments

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76

Peter Costello confesses

There is a terrific piece of rhetoric from Peter Costello today at Fairfax. It is a must read in terms of historical revisionism and politicking: Imagine an investment portfolio – say your superannuation fund – which has a whole bunch of assets that are going sideways and one prime asset that is growing strongly. Imagine

28

Europe reaches its bogus goal

There is one thing you can say about Europe, they never waste a crisis, the side show soap opera spectacular continued last night.  It has been going on for so long now that the market seems to have set itself false goals and then managed to convince itself that they equate to something important when

57

Unemployment looks set to jump

Tomorrow the ABS releases its October Labour Force survey and the chances are growing that we’ll see a jump in unemployment.  The August report wasn’t bad, with the unemployment rate falling from from 5.2862044% to 5.2477873%. But despite the decent month, the trend for unemployment is firmly up: Another measure that appears to have crossed an

34

WA Budget’s housing black hole

On Monday, I showed how the Victorian State Budget is likely to get hit hard from declining stamp duty receipts as house prices and transaction volumes fall. Thanks to reader aushousingcrash, I was able to source some interesting data on Western Australian (WA) housing transaction volumes which, when combined with falling home prices, paints a

1

Wielding China’s reserves

I have argued a number of times that the Chinese yuan could depreciate, against the consensus. Now, according to the Financial Times, Fan Jianping, chief economist of the State Information Center, thinks that yuan should be allowed to weaken: Fan Jianping, chief economist of the State Information Center, a think-tank within the powerful state planning bureau,

0

Chart of the Day: S&P earnings record

Another chart on the US S&P500 stock index, is from Bespoke Investment Group (via Seeking Alpha). US stock markets report earnings quarterly, as opposed to half yearly in Australia, and with almost 90% of companies in the S&P500 having reported for the third quarter (Q3), Bespoke estimate earnings at $25.42, or on a year’s trailing basis

19

November 9 links: Berlusconi goes

Up:  CRB, energy, ore, gold Mixed:  grains, metals, euro, Aussie, $US, Treasuries 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

6

Trading Day

The S&P/ASX 200 Index closed up 20 points or 0.48% higher to 4293 points today. In after hours trading, the index has given back on these gains and is down 20 points, with Euro and US markets are pointing to slightly lower or steady opens. Asian markets had a mixed day, with Japan’s Nikkei 225

19

Confidence trick

It takes a certain quantity of chutzpah to be a blogger. You need to know your subject well and be able to bat away your critics with good arguments. You can’t be afraid to stick your head out. In sum you might say you need a fair dollop of confidence. Especially if you’re going to

9

Lower rates means lower stocks

An interesting piece by Gerard Minack at Morgan Stanley today which provides some pointers to how to think about investing in such distressed and unusual conditions. Minack notes what has become obvious in a world with such low interest rates: that the customary relationship between interest rates and the stock market has been broken. Lower

21

The bailout softening begins

Can someone, anyone, please explain to me why liability management is no longer a part of banking? That seems to be what CBA Chairman David Turner thinks. In his address to shareholders today he said: Ladies and Gentlemen, I am very pleased that we have had another very good result. And this is notwithstanding the difficult environment

21

No joy for tourism

The ABS released its September Overseas Arrivals and Departures report today and sadly there is no joy to report for tourism with arrivals down 2400 and departures up 2100: We saw in the export figures earlier that manufacturing exports has bounced quickly on the back of a falling dollar. It is perhaps no surprise that

6

Golden hammer bashes trade suplus

The ABS September trade figures are out and show a $400 million hit to the surplus: SEPTEMBER KEY POINTS BALANCE ON GOODS AND SERVICES The trend estimate of the balance on goods and services was a surplus of $2,718m in September 2011, a rise of $122m on the surplus in August 2011. In seasonally adjusted terms,

2

NAB Survey soft on jobs

The October NAB Business Survey is out and shows a retracement of much of September’s gain. The most important of the numbers above are the employment index, which dropped to -1 following the incongruous jump in September and the clear easing in labour costs, down to 0.6, more than halving in two months. I suspect

14

Berlusconi’s last days

The European sideshow soap opera continued overnight with the two main focal points, Greece and Italy, doing their best to provide some quality entertainment. Greece now seems to be reaching some form a political stability with Papandreou out of the picture and a new unity government forming even though at this point it isn’t too

28

How big the ore bounce?

So, with a temporary floor under the ore price, it’s time to ask how big is the bounce likely to be? We have had a solid rebound so far with spot up another 1.7% last night to $125, 12 month swaps are at $129.50 unchanged and Shanghai rebar is also flat. According to Reuters, traders

12

Chart of the Day: S&P500 and the Fed

Continuing our series of charts on the US S&P500 stock index, is today’s from Doug Short, plotting the US Federal Reserve’s (the Fed) intervention via the Fed Funds Rate and other programs that has arguably sustained asset prices. The intervention has been a series of programs, emergency at first (TARP, TALF etc), then a series

17

Limited rate effect

Back in late October Sell on News posted a note from Deutsche Bank explaining that an interest rate cut was unlikely to have much affect on equity values. In a similar vein I note that Gail Kelly said as much about the rest of the economy on the this week’s inside business from the ABC: ALAN KOHLER:

2

Expect falls in Chinese inflation

China’s inflation figures for October will be out on Wednesday.  The consensus is looking for a 5.4% yoy rise of the headline CPI, vs. 6.1% in September. China’s consumer prices inflation has been driven pretty much by food prices, and food prices have been stubbornly high for a while, which pushed the CPI inflation high, and indeed,

20

ECRI sticks to US recession call

The CNBC folk gave the ECRI chief, Lakshman Achuthan, a pretty serious grilling last night. I can’t say he held up that well. Not because he lost any argument but because there wasn’t one. The ECRI methodology is a black box. As I’ve said many times, I’m quite suspicious of “Leading Indexes” in general, at

19

Xtranormal urban planning

The above video has been adapted from a satirical article written by Ross Elliott, who runs the blog The Pulse. Readers seeking further information on these matters are encouraged to read the below articles: Jumping the urban growth boundary Block sizes shrinking. Blame government policy Rethinking urban planning

2

November 8 links: Wen wants ’em lower

Up:  CRB, energy, $US, Treasuries, ore, gold Mixed:  grains, metals, euro, Aussie 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

3

Trading Day

An interesting day on the S&P/ASX 200 Index, closing down 7 points or 0.18% lower to 4272 points after being down more than half a percent all day. In after hours trading, the index is steady, with Euro and US markets are pointing to slightly higher or steady opens. Asian markets experienced similar losses, with

17

Grilling Qantas

The hansard of last Friday’s Qantas Senate hearing was released today and it’s a real eye-opener.  I recommend you read it cover to cover because you’re unlikely to find anything quite so darkly amusing for some time. What it shows is that there is something very weird happening in relations between government and business these days.

7

Australian dollar is headed lower

What’s your view on equities, the S&P 500 or the bourses of Europe? The reason I ask you this question is because if you can riddle me that then you know where the Australian dollar is going to head in the next week or so. As the Prince showed earlier today in C0TD, whether its

6

Busting some NAB myths

I’ve been thinking about and doing a bit of digging around the move by NAB move to not pass on the full rate cut and have come to two interlinked conclusions. The first is that it should come as no surprise that NAB did what it did.  It is quite difficult to judge where the various

9

ANZ job ads down again

ANZ job ads were down again in October by 0.7% in, the sixth fall in seven months. Annual growth in total job advertisements slowed to 1.8% y/y. Here are the charts: And here is a chart of job ads (inverted) against the unemployment rate: And further details from the release: Here’s what ANZ has to say: ANZ

3

ASX value trap

Downwards earnings revisions are widely being predicted, which of course makes the market subject to the double whammy of investment fear due to the travails of Western developed markets, and the growing evidence that many of the non-resources stocks, plus a few of the resources companies, are coming under pressure. Merrill Lynch reckons growth forecasts for

77

Swan is right to keep cutting

Speaking to the ABC this morning, Treasurer Wayne Swan maintained his commitment to a 2012/13 budget surplus despite the growing realisation that revenue is going to fall well short, as forecast here weeks ago: WAYNE SWAN: Well it’s a forecast from Access Economics. I can’t say that it’s accurate. What we are going to do