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Picking winners

A few commentators to my Picking Losers blog earlier in the week quite rightly pointed out the potential for gas-fired CCGT plant to be a sensible baseload replacement for brown coal-fired power. I have looked at the numbers, and agree. Taking the cost of new gas CCGT at around $1million per MW, replacing 6GW of

Latest posts

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Tax stats unmask investors

The 2008-09 Australian Taxation Office (ATO) Taxation Statistics were released yesterday (available here), and the data on property investment was very interesting. First, the number of property investors reporting to the ATO fell by 34,000 or 2% from the previous year (see below chart). Second, after rising steadily since 1999-00, the overall value of net

1

Small is beautiful

Analysts’ resources and attention mostly goes on the top 50 stocks, because they are liquid, institutions like them because they can defend their decisions, and brokers can sell their research more easily. It leads to an unhealthy relationship between the fund managers overseeing super funds and the big cartels. Cosy, comfortable, often compromised. For investors

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Hollowing out

Washington Consensus and Dutch Disease – yesterday saw an interesting convergence of these two ideas which are vitally important to the debate, or lack thereof about the structure of the Australian economy and the changes being wrought by mining and the high Australian dollar. Briefly, the Washington Consensus was the set of “rules” which replaced

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Will the RBA cut?

Right now, the economy is far weaker than media and bank economist blather is letting on, or understands. For that matter it’s far more weak than global markets are assuming. The reason is simple and goes back to a piece I wrote ten weeks ago: So, let’s take a closer look at where we are

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AFG – Mortgages bouncing in March

February’s data for housing was obviously terrible. However if we can take AFG’s latest report on mortgage issuance for March the market may still have a bit of a run left in it. Well at least in NSW. Mortgage sales during March saw a recovery from the record lows of January and February, but figures were

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SQM Research on the housing finance data

As my fellow MacroBusiness bloggers have already pointed out, Australia’s housing finance data released today by the ABS was bad, real bad. One of Australia’s few truely independent property analysts, the Managing Director of SQM Research, Louis Christopher, offered perhaps the most damning assessment via a series of Tweets: Home loans drop on weak demand

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It’s still 2008

As H&H reported today the housing finance data for February is simply plain bad. This is not a surprise to me as I have been warning about this for some time now. As I have been saying recently I simply could not see any drivers for new credit and it looks like I was correct

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Housing finance shocker

The drumbeat of crappy housing data is getting louder and more frequent. From the ABS February Housing Finance we get the following: Here are a string of graphs to give you a feel for how bad the trends are: I call them bad, yuk, crap and foul. And here’s one last one to drive home the

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Priced in

The Australian market’s S&P/ASX 200 only rallied 1% in the first three months of the year, compared with 5.4% for the S&P 500 in America. With the $A seemingly headed to $1.10, foreign investors, abut two fifths of the market, are likely to get nervous, and the strengths of the Australian market are probably priced

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Troubles with Fund Management – An Absolute Return View

This is a reply to Rotten Apple’s post about the “trouble” with the Australian fund management industry. The author of this article is a co-founder of an Australian-based private investment company, Empire Investing, and a former financial adviser and portfolio manager for a boutique financial services company. It’s all Absolutely Relative
 Let me start with

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Golden rocket

As gold again surged to record highs last night on dovish Bernanke comments and weak data, it’s time to revisit the rally. I first began recommending gold to anyone that would listen in early 2001. I was laughed at. Later that year, my friends laughed at me again. This time, it was a running joke

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Let’s get real

There’s a notion going around that an Australian carbon tax will raise more tax in its first three months than the EU ETS has generated in six years. Mr Seamus French’s column in The Australian on Monday included this idea. No numbers have been put forward to justify this assertion, and it can’t go unchallenged.

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Hong Kong’s housing headed for a crash?

This years Demographia International Housing Affordability Survey ranked Hong Kong as the most unaffordable housing market out of the seven countries surveyed, with median home prices a whopping 11.4 times incomes. After falling some 23% over 6 months in the wake of the global financial crisis, Hong Kong’s housing market has been on a tear,

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The line moves closer

The latest NAB “survey” of vested interests on what they hope is going to happen to the housing market is out as reported in yahoo finance. Even though it would seem that the chief of the bank has given up on housing others still seem to want to find the glass half full. Survey Highlights:

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Canberra please read: Roubini calls time on China

From Nouriel Roubini at RGE Monitor: I’m writing on the heels of two trips to China during which I met with senior policy makers, bank executives and academics, just as the government launched its 12th Five-Year Plan, intended to rebalance the long-term growth model. My meetings deepened my own impression and RGE’s long-standing house view of

3

Buying miners and groceries

Two events have the market buzzing today: the bid by China’s Minmetals Resources to buy Equinox for $7, and the announcement that Grant O’Brien will replace Michael Luscombe as CEO of Woolworths. A bit from each side of the two speed economy. The bid for Equinox is below the traded price of $7.35 and brokers

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We’ve lost our way

Over the weekend I was reading the local newspaper which contained a 3 page spread about  families who are struggling with day to day life because of the rising cost of living, mostly energy. In the same week it was determined that the new carbon tax would cost Australian families approximately $900/year and oil approaching

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Hawks and doves

So, it’s rates day. The usual suspects are out pounding the pavement. All over the media, currency boffins are calling for hawkish rhetoric from the RBA. But they’re all outdone by Australia’s one-man inflation fighter, former deputy governor of RBA, Henry Thornton, who calls for a hike today: Wage claims are on the march, with

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So much for the Californian housing shortage

Let’s take a trip down memory lane. It’s early 2006 and the median house price in Los Angeles-Orange County, California has hit $582,000. Demographia has just released its latest International Housing Affordability Survey showing that Southern California has the most expensive housing market out of the six nations surveyed. Property speculation is at fever pitched.

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Building Revival Forum 2011

No it is not a Hillsong fundamentalist production , although I could easily find some parallels. The Building Revival Forum 2011 is in fact a Queensland government initiative. On 12 April, a Building Revival Forum will be held with key industry stakeholders to brainstorm ways to kick start Queensland’s vital construction industry, which is still suffering

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Leigh Harkness on Bank Welfare

Leigh Harkness is back with his unique perspective on the Australian macro-economy for another guest post, this time on “Bank Welfare”. Banks have prospered under the floating exchange rate system.  They have been able to lend as much as they like without any concern about affecting the balance of payments.  The exchange rate adjusts to

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Gear down for stocks

The global financial crisis was largely confined to a bloated and increasingly reckless financial sector. Yes, government debt positions worsened and excessive household debt was exposed. But non-financial corporations are in pretty good shape. Unlike the 1990 and 2000 economic downturns, business gearing was kept low.  The top 100 American corporates have almost $US2 trillion in

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NZ moves to limit exposure to housing

New Zealand has undertaken two policy actions lately aimed indirectly at reducing the economy’s exposure to the housing market. The first measure, called the Open Bank Resolution (OBR) Policy, has been initiated by the Reserve Bank of New Zealand (RBNZ) and seeks to protect taxpayers from funding future bank bailouts. The OBR is intended to

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Picking losers

For some time now, there has been bipartisan support for a 5% reduction in emissions from 2000 levels, and Australia has committed this abatement effort under the Cancun agreement. Although it may sound small, a 5% reduction actually represents a very substantial abatement effort. In absence of mitigation policy, emissions under a “business as usual”

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Boom and bust is back

With Brent and WTI crude both surging to post-GFC highs Friday, I’m beginning to suspect that the world has entered a new era of oil price and growth volatility that spells the end of the Great Moderation. Why so? Supply and demand are the key to all things economic.  Previously at this site, the Unconventional

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Fresh calls for housing stimulus

Yesterday’s Australian Financial Review published an article entitled Capital house prices slide, which provided a sobering assessment of the housing market, particularly in Brisbane, Perth and Melbourne. House prices fell in most capitals in February and analysts expect poor affordability to prevent any real recovery for at least a year… Rp Data senior research analyst

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Weekend musing: What’s a crash?

The saturday morning ritual of moving the yard apes between their various activities is over so it time to sit back for an afternoon of musings. Firstly, after yesterday’s little bomb drop from NAB on housing I note that Bill Evans from Westpac has joined in (h/t janet) with a bearish post on Business Spectator. A sustained relaxation and

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Weekly Market Analysis – 1st April 2011

Conceal me what I am, and be my aid For such disguise as haply shall become The form of my intent. Shakespeare Summary Stocks rallied hard last night on the US and European markets after – well, choose your reason and stick to it really. Jobs? Corporate profits? No new meltdown? Cow mutilations are up?

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Power hungry China

Analyst presentations can be tedious affairs, often an equal mix of the obvious and the dubious. But one I saw about China’s Five Year Plan’s implications of Australia really had me listening closely. The visiting China-based analyst was showing a slide of the projections of the growth in “low carbon” energy out to 2015. It