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“Out of control” Ebola rages

From the FT: The death toll from the outbreak of Ebola virus in west Africa has climbed to 826, nearly double the number of fatalities of the previous worst-ever epidemic, according to figures released by the World Health Organisation. The update suggests the outbreak is spinning out of control, with more than 50 deaths reported in three days from

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MB Members Report: Gerard Minack on the great ASX lag

Australian equities are not expensive by global standards.  However, the key investment issue is earnings, not valuation:  profits increased sharply through the resource boom, and remain high in domestic sectors.  If profits normalise, Australian equities will likely under-perform. The valuation of Australian equities is mid-range amongst global markets (although most markets do not appear cheap). 

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Links 5 August 2014

Global Macro / Markets / Investing: The false choice between equality and globalization – VOX Junk bond illiquidity rears its ugly head – Wall Street Journal Investors blow froth off junk bond market – Financial Times Forex market volatility is at record lows – MoneyBeat Warren Buffett is sitting up on his largest cash pile

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ASX at the close

Chris Weston, Chief Market Strategist at IG Markets Despite certain developed markets getting smashed last week, global stock funds still attracted $11.3 billion in new cash. Emerging markets attracted a fair portion of these funds, recording the biggest inflows in 18 months. Europe had a shocker, taking the falls in the Eurostoxx 600 index to

19

PBOC: No more stimulus

I’ve been warning for some time that Chinese stimulus is likely to be temporary and fade before long. The head of the People’s Bank of China agrees. From Bloomberg: The People’s Bank of China warned that the country’s credit and money supply have increased rapidly and indicated that it will refrain from broader monetary easing to support

0

Retail sales to weigh on June quarter GDP

By Leith van Onselen While today’s retail sales result beat analyst’s expectations, they are still likely to detract from the country’s June quarter GDP. As reported earlier, monthly sales values registered 0.6% growth in June on a seasonally-adjusted basis, which was above analyst’s expectations of 0.3% growth. However, in quarterly real chain volume terms, retail

0

More Chinese stimulus scuttlebutt supports miners

The China Securities Journal today reported that China GDP may rise by about 7.4% in the second half citing a State information Center report, which has an affiliation with National Development and Reform Commission. Forexlive is also reporting from MNI that: Suggests the central bank will cut the system-wide reserve requirement ratio by a small margin Said regulators could

2

Retail sales rebound in June

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released retail sales figures for the month of June, which registered a 0.6% seasonally-adjusted rise in sales over the month, beating economist’s expectations of a 0.3% rise. Annual sales growth clocked in at a solid 5.5%: The below chart maps out seasonally-adjusted sales

0

ANZ job ads flat

ANZ job ads are out for July and rose 0.3% to 133,292 per week. That’s down from June’s 4.4% increase which followed a big drop in May. From Warren Hogan: “Labour demand has continued to improve this year. Over the past six months, each of the main job ads measures has strengthened, although the pace of the upswing remains quite moderate compared

82

Treasury reveals Coalition Budget class warfare

By Leith van Onselen A Freedom of Information (FOI) request lodged by Fairfax Media has revealed Treasury modelling showing that the measures introduced in the May Budget would be highly inequitable and punish lower income workers. From The Brisbane Times: The Treasury analysis reveals the spending cuts cost an average of $842 a year for

62

Portugal seizes its largest bank

Risk markets might get a fillip from this today: Portugal will spend 4.9 billion euros ($6.58 billion) to rescue its largest listed bank, testing the euro zone’s resilience to another banking crisis just months after Lisbon exited an international bailout. The rescue of Banco Espirito Santo, which was unveiled after a frenzied weekend of discussions between Portuguese

0

TD Securities monthly inflation peaks

TD Securities/Melbourne Institute (MI) Inflation Gauge for July,  0.2% month on month and  2.6% year on year. The trimmed mean came in at 0.4% month on month and 2.6%  year on year. Last month was 3%. From the SMH blog: Ongoing caution from RBA in recent weeks speak to us that the Board can pause for

31

Melbourne’s great big tunnel of pork

By Leith van Onselen Fairfax’s Michael West has thrown a great big hand grenade at Melbourne’s East-West Link – Melbourne’s controversial road tunnel project – which according to West could cost an incredible $1 billion per kilometre, making it one of the more expensive road projects in the world: Guess which road in Australia is shaping up

17

Put the PPL dog down, Tony

By Leith van Onselen It was revealed over the weekend that the Government has shelved Tony Abbott’s signature paid parental leave (PPL) scheme for fear that several Coalition backbenchers would cross-the-floor and vote against the scheme, causing embarrassment for Tony Abbott.  From The Canberra Times: Several… sources said a message had been discreetly sent to Mr

9

Boston blows the population ponzi horn

By Leith van Onselen The AFR is running a story today summarising a new report from Boston Consulting Group (BCG), which claims that Australia will experience labour shortages within five years and acute shortages by 2020: Australia faces a shortage of 2.3 million workers by 2030 – one of the worst in the developed world, according

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How to deflate the housing bubble without killing the economy (members)

Back in 2003, when Ian Macfarlane’s RBA had been running overly easing monetary policy for years, he suddenly noticed that he had a housing bubble growing in Sydney. He repeated his benchmarks for such recently: “we had lending for housing and prices rising at 20 per cent, half of it speculative lending, negatively geared. There

28

Shadow RBA wants tighening on bubble, inflation

From the Shadow RBA today: New inflation and growth data suggest that the RBA’s low interest rate setting ought to come to an end soon. Inflation is close to the upper target band, consumer confidence has bounced back from the temporary drop in May and GDP growth remains solid. Though some weakness in the labour

0

RP Data weekend property market update (members)

Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 3 August 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New

1

Auction clearances rise

By Leith van Onselen The national auction clearance rate rose over the weekend on the back of increases in Sydney and Melbourne. According to RP Data, the national weighted average preliminary auction clearance rate was 69.7% over the weekend, which was up 2.4% from the 67.3% preliminary clearance rate reported last weekend. Sydney’s clearance rate

18

Welcome to the carbon price gouge

From the ABC: The WA Government has refused to commit to removing an extra charge added to public transport fares when the carbon tax was introduced. In 2012, the Government said public transport fares would jump 1.5 per cent to recover the estimated cost of the carbon tax. Opposition transport spokesman Ken Travers said it

2

Gorgon bids farewell to contracts

The AFR reported over the weekend that: Chevron has insisted it will take the risk of selling a chunk of LNG from its $US54 billion Gorgon project in Western Australia into the spot market rather than accept lower prices under contract sales as it struggles to sign up long-term customers who are holding out for