Latest posts

15

Spiralling into the moussaka

From the morning links: Explosive growth of unemployment recorded in Greece, with a total number of unemployed is at 733,645, according to data from the Greek Statistical Authority (ELSTAT) that were released Wednesday. The percentage of registered unemployed reached 14.8% in December 2010 an increase of one percentage point compared with November. The number of

3

The Neck is broken? ASX200 drops below 4750

Well that didn’t take long – the ASX200 has corrected again this morning, with an intraday level at 4714 points. Readers may have noticed that I am still wrong about a possible rally! In my last regular weekly analysis I did mention however: But basic charting analysis suggests a more bearish stance: a classic head

2

The Aussie and technicals

Technical analysis is the study of patterns of movements in price action of a market or asset as a predictive tool for the future movement of those prices. Technical analysis recognises that price volatility is greater than fundamental volatility and for me technical analysis is a really important tool in the armoury of a trader

1

Links March 10: Relative calm

More pain for PIIGS:  Greece run. Ireland, Portugal, Spain, Italy, Belgium. Obama’s no fly zone is looking like PR. FT Libyan war. FT $US sideways. Grains futures flogged. Metals crushed. Energies, gold flat. Greece reaches do or die. To Vima (h/t Calculated Risk) Ireland up for haircuts. Labour (h/t Calculated Risk) PIMCO dumps all Treasuries. Zero Hedge No OPEC capacity increase. Reuters

10

When a Donkey Meets a Thoroughbred

After a quick holiday across the pond in NZ (luckily not near Christchurch), your blogger returned to Australia to the news that West Australia Newspaper Holdings (WAN) is going to buy the Seven Media Group from Seven Group Holdings (SVM). So a WA media monopoly is marrying the TV sideshow of a Caterpillar servicing business. I can’t wait to see their kids.

4

Bad day for tough words

Houses and Holes noted today that the RBA looks as if it is trying to talk tough on interest rates. I assume that was before 11:30am when the ABS figures for housing finance appeared. JANUARY KEY POINTS VALUE OF DWELLING COMMITMENTS January 2011 compared with December 2010: The trend estimate for the total value of dwelling finance

34

House prices, gold, and long-term investing

One thing I’ve always believed about investing (as opposed to speculating) is that it’s important to step back and take a look at the long-term picture. In the shorter term, markets are subject to periodic “manias, panics and crashes”, as Charles Kindleberger put it in his classic study of financial crises. But in the long-term,

2

Shocked consumers

In my previous post on Phil Lowe’s speech, I noted that the RBA is hawkish and clearly still concerned that consumers will binge as mining boom income passes through the economy. The killer quote was: Not unexpectedly, this decline in the relative price of manufactured goods has caught the attention of the household sector. In

0

In the carbon crosshairs

Amidst the heat and confusion about the carbon price, it does seem increasingly likely that some sort of tax will be applied. What does it mean for stocks? “Don’t know yet,” is the commonest answer, and not unreasonably so. But it is likely to hit the big emitters. The steel companies, BlueScope Steel and OneSteel

2

The RBA shows an iron hand

Assistant Governor Philip Lowe has delivered a fantastic speech for those wishing to understand the current transition of the Australian economy and how the RBA thinks about it. It’s a very long speech and I suggest you read it in full. But here, at least, are a few highlights. First on inflation and purchasing power

29

Theories .. Anyone ?

The AFG monthly mortgage report is something I follow. AFG claim to represent between 10% to 20% of the mortgage market and release their raw data every month in a fairly consistent manner. They are a brokerage service so they are able to get their data out earlier than most. As they are not an actual

0

Revenge of the PIIGS

Overnight, markets received a boost from OPEC member’s declaration that they’ll fill any existing or potential supply gap. Later, there was some doubt about the veracity of the claim. The energy complex nonetheless retreated a little, as did gold, and equities jumped. Metals were sold off early then bounced to be even. However, other markets remain

6

Oiling the portfolio

Having read with fear, bordering on terror, the percipient Houses and Holes’ blog Sell Signal, I am struck by how different broking analysis is from H&H’s dire world of lightning strikes and imminent turmoil. Grains, H&H informs us, may be decoupling. Metals are getting “smashed”. Wheat may be a give away. But none of that

5

Gold, Silver and Oil Ratio

As part of my “Crashlist” I regularly follow the spot price (in USD) for gold, silver and oil as they are the three benchmarks that measure the strength of the global economy, the value of the US dollar and the speculative excess inherent in modern global markets. Bullion Baron has some great insight into these

0

The Aussie and trade data

As you know,  your currency blogger reckons that on any time frame you can group the key drivers of the AUD into 5 categories or drivers. The difference is that depending on the time frame being looking at you need to change the subjective weighting you give each set of variables. Technicals are much more

8

Have the banks’ rate increases peaked?

From Banking Day today: Westpac’s chief executive, Gail Kelly, said yesterday that she intends to make out-of-cycle interest rate cuts when lower funding costs permit, which she hopes will be in 2013 or 2014. Speaking on the ABC’s 7.30 program, Kelly said she expected the bank’s average cost of funds to plateau towards the end of

6

Sell signal

I don’t know if you trade, but if you do, there are clear reasons to get cautious. There is a gathering storm over the global economy and market patterns are now making it plain that the risk of a lightening strike is outweighing the benefits of remaining outdoors. Regular readers will know that I have

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The Economist: Bricks and Slaughter

The Economist has published an excellent article entitled Bricks and Slaughter (h/t Financial Insights for the link). It is part of a series by the Economist exploring the lessons to be learned from the global housing bubble. Below are some key extracts; although I recommend that you read the article in full for yourself. A

10

Trouble spreading ?

As I have been commenting on recently the “edges” of the real estate market are showing sure signs of capitulation. I was going to begin my week with a bit of an inspection of first home buyer areas because I had heard some anecdotal evidence that housing stress is becoming very apparent. However I need not have concerned myself with

6

Weekly Market Analysis: a close below 4800

Weekly Summary Apologies for not posting my regular end-week summary, but this blogger is feeling the combined effects of moving house and re-valuing the avalanche of HY earnings reports. What follows is my analysis from last week but with notes on today’s correction and what it may mean looking ahead for the rest of this

5

Carr’s wrong turn

All right you lot, no more reference to myself in the third person. Today Adam Carr takes on the RBA (h/t The Lorax) in arguing that: So how is it that the household savings ratio has risen so sharply then? Surely consumption must have fallen to facilitate this? Okay, that sounds reasonable and I’m hearing

8

Greenspan takes a trip to Fantasy Land

Alan Greenspan has come in for some pretty harsh criticism in the past couple of years about the role he played in inflating the bubble that led to the global financial crisis of 2008. There are two serious charges against Greenspan. The first is the claim that the Fed ran an excessively loose monetary policy

16

Ken Henry’s lucky country

On Friday evening, Treasury boss Ken Henry delivered his final public address before stepping down in March. At the University of Tasmania Giblin Lecture, Henry delivered his magnum opus, a broad review of Australian economic history spanning three centuries (full transcript below, h/t The Lorax). The document is a must read in full, but the

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Jumping the urban growth boundary

Australia’s state and local governments rely on a variety of regulatory devices to limit suburban growth. One measure that has been implemented in all of Australia’s major cities and some towns (many within the past decade) is the Urban Growth Boundary or UGB.  A UGB is a form of large-scale zoning whereby the government effectively draws a ring around a

3

Guest post: Derivatives regulation Part II

By Satyajit Das A question of values … Derivative contracts are valued on a mark-to-market (“MtM”) basis. This requires valuation of the contracts based on the current market price. OTC derivatives trade privately. Market prices for specific transactions are not directly available. This means current valuations rely on pricing models. In current accounting argot, most derivatives are Level 2

8

The cost of capital

The chronically low interest rates in the developed world – Britain has the lowest interest rates in the Bank of England’s 300 year history – are a symptom of a deep sickness in global capitalism. It is a sickness that may be long term. The problem afflicts most economies, including China, but for different reasons.

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Guest Post: FHOG: Proudly Ripping Off Young Aussies since 2000

Sam Birmingham runs a top quality networking site for young professionals called WeBe, which provides up-to-date information on financial matters, work-related issues, lifestyle news and reviews, and current affairs and opinion pieces. WeBe also provides a platform where members can have their voices heard, express opinions and share ideas with other like-minded Young Professionals. With the last week’s Mortgage Choice data indicating

32

Friday Boganomics: Jump in my carbon

The announcement this week by the Federal Government of a fixed carbon price to be set next year, followed by an ETS has been met with the predictable ill-informed back-and-forth that we’ve come to expect from any major policy announcement, whether or not any actual information has been imparted. No doubt, the news has sparked

1

The Aussie & petrodollars

The FT’s Lex column has an interesting take on why the USD has not benefited from the “risk aversion” trade. The other day I hypothesised that perhaps there just wasn’t that many big “risk” positions on in the past few months so there was no observable impact on the USD. But Lex reckons its about