Links March 18: Worse than thought

Cooling spent rods to take weeks. FT Japan shuts supply chain. NYT Canberra panics late. The Age Japan and the global economy.¬†FT Japan’s damaged ports to hit bulk commodities. The Oz Action in Libya suddenly possible. FT Was it my article that changed Obama’s mind? ūüėČ Gaddafi threatens everything in response. Reuters Weak:¬†Aussie,¬†$US. Flat:¬†¬†Ore. Up

Latest posts



After¬†publishing my latest¬†post¬†I received the following e-mail from a reader. I suspect you may be interpreting this REIV move incorrectly. If history is any guide the Real Estate Agents are in the process of “switching sides” figuratively speaking (as they are really on their own “side” at all times and everywhere). ¬† If the REA’s


How Japan will hit local growth

I am surprised at the resilience of Australian equities to the global sell-off. Either the local market is confident that the crisis can be contained (for some reason I can’t fathom, it’s behaving irrationally, or, it has assessed any economic fallout from the disaster to be minimal for Australia and already priced in). The only


Risk is off, but China is still on

Houses and Holes is right on the AUD we need to be careful what we wish for. We do not want to be a reserve currency Рalready we are seeing the strength of the AUD reallocating resources around the economy. HH’s post on Dutch disease a week or two back highlighted this and it


Has the REIV destroyed the evidence?

Earlier in the week,¬†a reader sent me a link to¬†a recent Real Estate Institute of Victoria’s (REIV)¬†news release. The release contained the following quote [my emphasis]: Members report positive expectations for market activity in the March quarter at the same time as a drop of 3‚Äď5 per cent in the median house price is expected.


Sell finance

With global markets facing a period of sustained uncertainty, it is worth taking a longer perspective, comparing the current conditions with the so-called “Goldilocks” economy that existed just prior to the GFC. It turned out then to be a case of all the three bears instead of Goldilocks, but at the time things seemed robust


Japan’s critical moment

An hour ago the IAEA released the following: Temperature of Spent Fuel Pools at Fukushima Daiichi Nuclear Power Plant Spent fuel that has been removed from a nuclear reactor generates intense heat and is typically stored in a water-filled spent fuel pool to cool it and provide protection from its radioactivity. Water in a spent


Links March 17: Worst case scenario

Reactor 2 containment rupture. NYT Spent rods exposed at reactor 3 and 4. IAEA Radiation hampering containment efforts. FT US, Britain advise flight. BBC Tokyo closed. Reuters PBS Newshour video on radiation in Japan. Describes how problems are containable, except if radiation prevents workers from being able to do so. Precisely what appears to be happening:


Japan Update 2

The situation in Japan seems to have just got considerably worse. From the BBC live feed. 0325:More on that news conference by Chief Cabinet Secretary Yukio Edano. He said: “At around 0830 today, at Fukushima Daiichi nuclear power plant, white smoke has been seen coming out of reactor three. And regarding this, currently we are


Stocks for Bears

It’s a scary and volatile world at the moment:  floods, cyclones, earthquakes, tsunamis, US housing crashes, Aussie housing bubbles, the GFC, QEII, PIIGS, Japanese debt, revolution in the Middle East and Charlie Sheen.  As the Chinese curse goes, we are living in interesting times. So what’s a bear to do?  I’ve never been the “head


Wow! – The MSM on FHBG

I am starting to think I have woken up in the twilight zone. Something very odd seems to be suddenly happening in the Australian mainstream media. Last week the Unconventional Economist posted about the MSM’s foray into anti-REIX journalism with a well researched opinion piece about the failings of negative gearing. Today I note that


The RBA airbrushes history

Deputy Governor of the RBA, Guy Debelle, yesterday delivered an¬†analysis of Australia’s recent financial history that left a few things out. Let’s take a look: Over much of the past two decades, demand for credit outpaced the growth in deposits, so that banks accessed wholesale funding markets to support growth in lending. This outcome reflected


Spruiking as they exit

You’d seriously think that the Real Estate Industry sponsored media in Queensland would have given up by now. With north Queensland, the Gold and Sunshine coast going through well publicised correction you wonder why they would bother spending the money. But I guess old habits die hard. So once again we are subjected to the


Will this cat bounce?

Today’s strong uptrend in almost all risk markets is not that surprising. In trader’s parlance, this may just be a “dead cat’s bounce“. Sorry for the awful terminology, but there it is. This broad correction offers both risks and opportunities for trader’s and investor’s alike. For the latter, it offers excellent buying opportunities in “Very


History resumes

I remember the nineties fondly. They were the years before housing bubbles. The years when cricket still had meaning and moustaches were not yet the gimmick of some new age fad. The years when talent still determined who became famous. And the years when the singularity of American might gave the world a moral centre,


Links March 16: Risk hydra

Monstered: metals, grains, energy, Aussie . Ore eases. $US pop. Trouble at all six reactors now. FT Foreign nationals, companies, flee. FT Reactor core cooling. All Things Nuclear (h/t Naked Capitalism) Excellent Al Jazeera description (all those years of Curiosity Show paying off, though spelling is a problem): Economic fallout. Alphaville China to get hit. Alphaville Ireland will threaten default.


Japan Update

Update: European markets are also getting hammered . See BBC for more. It seems that only the stock market has realised what the hell is going on. I captured this on my phone earlier in the day, the Nikkei closed down 10.55%  after BOJ intervention. But it just seems absolutely bizarre that I am even discussing


More mangy data

There is more bad credit and sales data out today from the ABS. First, Motor Vehicle Sales: Trend – The February 2011 trend estimate (84 485) has shown a decrease of 0.3% when compared with January 2011. Seasonally Adjusted – The February 2011 seasonally adjusted estimate for new motor vehicle sales (84 122) increased by


The RBA’s message on debt

In today’s Minutes of the March 2011 Monetary Policy Meeting, RBA members had something of a coming out: The household and business sectors in Australia did not appear to be under financial stress, though both continued to show more caution in their borrowing behaviour, as evidenced in slower rates of credit growth over the past


Risk off event

Financial markets lack sentiment as shown by today’s price action. Japanese Prime Minister Nato Kan reignited the risk off rally today and send the Nikkei and AUD tumbling after discussing the rising fears of nuclear meltdown after a new fire at the Fukushima reactors. It is no understatement to say that this was the catalyst


Japan: Suddenly it seems much worse

There is a now  constant stream of slowly worsening news coming out of Japan.  As H&H linked to in a recent post the expected outcome of the Boiling Water Reactors should be far less worrying than what is being reported. A quick check of the BBC feed shows some chilling details of what is believed


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


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 ‚Äď its massive scale ‚Äď 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