QBE shaken

Given the enormity of what is happening in Japan, it seems a little trivial to be tracking the possible effects on Australian shares. The greatest concern will be the long term impacts on the world’s third largest economy and one of the power houses of the Asian region. Japan is a heavy consumer of Australian

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High risks

The US equity market held up pretty well last night but looks to me to be are underestimating risks all around. Poor Japan seems headed toward mutliple meltdowns. Live coverage is available at the BBC. New Scientist reports that assuming meltdowns are occurring then it is only a question of whether containment of the radioactivity


March 15: Crisis resolutions

Meltdown under way at three plants. AP Coverage. BBC Japan’s impact on LNG. Alphaville Reconstruction could be $1 trillion. Zero Hedge Japan’s impact on LNG. Alphaville Metals mixed, copper slumps. Grains, Energy futures stable, gas jumps. Ore eases. $US crunched. Aussie flat. PIIGS relief: Greece, Ireland, Portugal, Spain, Italy, Belgium. Europe fixed! Naah. Naked Capitalism Saudi, UAE troops flood Bahrain. NYT Well … that was quick. Invasion alert. Stratfor (h/t


The Economist on housing supply

I was disappointed with The Economist’s recent special reports on housing. Whilst the reports captured the psychology and the demand-drivers of bubbles well (discussed in an earlier post), they failed to adequately capture the role of supply-side constraints. As far as I could see, the only reference to the supply-side of the housing market were


Not today

There is so much to say on the financial front about what is happening in the world right now. China finally seems to be making the right noises about its movement towards consumer led economic growth, take it or leave it.  Bahrain has erupted again and is now asking for its much larger neighbour to step


Macquarie bursts the China bubble

The pressure is growing for China to open up its capital markets as a way to solve its internal bubbles. The question is: how will that affect the rest of the world? The greatest impact of China – its massive scale – is so far largely confined to trade and global production chains. What happens if


Will Japan rout the Aussie?

Not surprisingly the markets in Japan are under pressure in the aftermath of the earthquake and the massive destruction. The Nikkei is down 5.14% as I write and USD/JPY has bounced off a low for the day of 80.60, no doubt on the back of some intervention from Japanese authorities. The moves in Japan and


Japan and Chernobyl (updated)

From The Automatic Earth and author Nicole Foss who has a “master thesis at the law faculty of Warwick University in Coventry, England, where she studied International Law in Development”, in nuclear safety research. She later became a Research Fellow at the Oxford Institute for Energy Studies, where her research field was power systems, with a specific


The great Aussie battle

Is the AUD weak or strong? It’s hard to tell because it seems to find support above .9950, like it did Friday night, but can’t get through 1.02. This tight trading range has been in force for about 6 weeks now and has the bulls and the bears excited in equal measure each camp expecting


Should the US balance its budget?

Deficit hysteria is alive and well in the United States as calls grow to slash spending and return the budget to a “sustainable” position. Today I am going to ask what may seem like a very obvious question: should the US quickly balance its budget or even return it to surplus? Of course it should,


Into the maelstrom

Let me begin my reiterating my sympathies for the Japanese. There are a number of very big cross currents at work for markets today. The first, of course, if the suffering of the Japanese. Across the world, the coverage is remarkably alike, a result perhaps of diminishing foreign correspondent budgets and the secrecy of the


Links March 14: Cross currents

Japanese tension mounts. The Economist Partial meltdowns. FT Japan before and after. ABC Insurance fallout. Adele Ferguson Corrections. Tim Boreham Metals hit. Bloomberg Japan will need more energy. WSJ Ziggy tilts at the windmill. The Age So does Hamish Macdonald Bahrain edging toward civil war. Komo, FT Europe finds a deal. FT FOMC preview. Calculated Risk


NAB warns on offshore funding risks

The Australian banks’ heavy reliance on offshore funding has received limited coverage in the press lately. On Thursday, the Australian Financial Review (AFR) ran a story entitled Clyne sounds funding alarm, where NAB’s CEO warned about funding challenges facing Australia’s banks and the risks inherent to the Australian economy. Surprisingly, however, Clyne’s comments were not


Japan fallout

Right now we do not know what is happening in Japan’s nuclear reactors. According to CNN, however, the news is very worrying: A meltdown may be under way at one of Fukushima Daiichi’s nuclear power reactors in northern Japan, an official with Japan’s Nuclear and Industrial Safety Agency told CNN Sunday. “There is a possibility,


The property market is right

One of the best stockbrokers I have ever known once said to me, in characteristically gruff fashion” “Mate, the market is always right. Even when it is wrong, it is always bloody right.” He was a great broker because he understood crowd psychology and the limited utility of numerical analysis. A great lesson in humility.


Weekend Reading: Confusion

Metals, Grains, Energy futures crushed. Ore smashed. $US crunched. Aussie rocket. Bifurcating PIIGS: Greece, Ireland, Portugal record wides; Spain, Italy, Belgium relief. All tsunami news. FT Drunken skyscrapers. You Tube Saudi’s day of saturation police presence. FT Forget Saudi’s increasing production. Jim Hamilton Gaddafi to prevail. FT Kuwaiti protesters gassed. Zero Hedge US job openings fall, consumer confidence hit. Calculated Risk US still deleveraging. Zero Hedge More


Japan tsunami

  Update 1:30am: Large wave hitting Hawaii again. Maui harbour bouy rising 7ft. Nikkei was down 170 for day, futures are currently down 200. Update 12:48am: Hawaii has been hit by second wave, water over roads(?), water has receeded out 200ft or so and seems to be rising. Water is moving up the beaches !!


Will the Five Year Plan kill commodities?

A couple of pieces from around the world in the last few days set up an interesting and crucial debate for Australia vis-a-vis China’s new Five Year Plan. The first is by long-term China watcher and economic heavy-weight, Barry Eichengreen: China has been able to grow so rapidly by shifting large numbers of underemployed workers


Links March 11: Pick your poison

Metals solid. Grain futures spanked. Energy futures crushed. Ore eases. $US rocket. Aussie smashed. It’s China’s fault. Bloomberg It’s oil’s fault. FT Portugal, Greece, Ireland to default. Eurointelligence PIIGS relief. Greece, Ireland, Portugal, Spain, Italy, Belgium. German idiocy. Zero Hedge More planning for no fly zone. Bloomberg Gaddafi gains. Reuters US housing plunges to new low. Calculated Risk US deficit yawning. Calculated Risk Fed to


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


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


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


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


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.


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


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,


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


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


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