43

Bernanke chooses deflation

So, down we go. The last impediment to lower … well … everything (except the $US) has been removed. There’s no QE3. Markets didn’t muck around. Everything risk and $US sensitive took an instant pounding and the $US jumped. The equity market got smashed into the close and is signaling more to come. What we got

Latest posts

82

Real estate agent hysteria

A few weeks back, I published a post highlighting how real estate agents seem to have turned from ‘talking-up’ the housing market to ‘talking it down’ in order to boost sales. I provided some recent email reports from a Ray White real estate agent that set a new benchmark for bearishness. Well, today I want

2

RMBS arrears stabilising

The latest Fitch Rating fair dinkum report is out in what looks to be a few more streams of sunlight for the economy. Arrears on RMBS are still high by historic standards, but flat interest rates look to be providing some stability. Fitch Ratings said that the decision by the Reserve Bank of Australia (RBA)

7

Trading Day

The S&P/ASX 200 Index closed up 0.8% or 31 points to 4071, after recovering some mild losses in the morning. In after hours future trading, the market is steady whilst Euro and US futures point to similar gains. Asian markets experienced smaller moves, Japan’s Nikkei 225 closed up 0.2% to 8741 points, whilst the Hang

16

Home buyer confidence etc.

I was going to ignore today’s Genworth Home Buyer Confidence Survey. I saw the press release this morning and it was so loaded with positive spin that I didn’t think it credible enough to report upon. However, I’ve noticed that both Bloomberg and Fairfax are now running the release so I thought I’d better take

1

Fearful Symmetry sees a policy blunder

Fearful symmetry was disappointed that the RBI saw fit to raise interest rates at its mid-quarter review on September 16. One can evince from the statement that the cycle will now enter into an extended pause, which is moderately heartening. The disappointment stems from the fact that the Bank should not have raised interest rates

16

Myer leaves the building

An interesting hypothetical is posed in a Merrill Lynch report. What would happen to Westfield Retail Trust if Myer were to exit its portfolio? It shows just how much the department stores are struggling to hold their position. First, Merrill reckons it would lift the EPS quite substantially: We have been asked by clients what

75

All hail Swan!

As no doubt many of you are already aware, Wayne Swan has been declared Finance Minister of the Year by Euromoney magazine. As someone who has created and engineered similar types of magazine executions, let me establish first that I really don’t think this is worth the bally-hoo it has received. Such special issues are

10

Equities Spotlight – Newscorp

With the recent News of the World scandal and the Australian media inquiry it has prompted, today we’ll take a look at the media empire at the centre of it all – Newscorp. The Business Newscorp is a global, diversified media company which operates in the following areas: Cable Network Programming, Filmed Entertainment Television Direct

6

Europe’s minnows revolt

Late last week I said this: Over the last few days I have attempted to be positive in support of the political messages coming out of Europe even though I have been well aware that the economics of the situation simply don’t add up. The renewed issues in Portugal, Ireland and Cyprus and Italy add to the rational

13

IMF slashes Australian growth

I am more used to laughing at IMF prescriptions for solving financial crises than I am used to praising their work, but the latest World Economic Outlook is a breath of fresh air in more ways than one. It begins with an admission that the last WEO got it all wrong, something a few Australian

30

Australia needs a Tobin tax

But I see offhand no other way to prevent financial transactions disguised as trade – James Tobin In 1972, after the collapse of the Bretton Woods system (where currencies were pegged to the USD, which itself was backed by gold), economist James Tobin proposed a tax on the currency exchange. As he says: The tax

62

WA first home owner’s grant revealed

Back in March one of MacroBusiness’s gold star recipients, Saul Eslake, penned a stinging review of first home buyers grant schemes in the Sydney Morning Herald: It’s hard to think of any government policy that has been pursued for so long, in the face of such incontrovertible evidence that it doesn’t work, than the policy

130

Look to Texas to solve Australian housing supply

Following on from my recent articles on land-use regulations and housing affordability, I want to take readers through Texas’ deregulated and innovative urban planning system, and how this system has assisted in providing Texans with housing that is among the most affordable in the Western world despite very high population growth and easy access to

7

Trading Day

The S&P/ASX 200 Index closed down 1% or 41 points to 4040, after recovering some mild losses in the morning, slipped after lunch on news of Italy’s rating downgrade and RBA minutes indigestion. In after hours future trading, the market has slipped another 5 points whilst the Euro and US futures point to similar losses.

2

Banks on Minutes

Here’a a couple of bank takes on today’s RBA Minutes. Neither can bring themselves to say that the RBA will cut. And, in truth, there wasn’t much in the minutes to suggest that they will. I remain less convinced than my stablemate Deus Forex Machina that the RBA will cut on domestic weakness alone by

36

Beautiful one day, bust the next

There are a couple of areas around Australia that I consider interesting microcosms of the risks of non-diversified long term investment portfolios. There are obviously some regions in Australia, such as mining towns, that are currently booming and you would probably be laughed at to suggest that these places are in danger of having their

32

Parko: No such thing as Dutch disease

Yesterday Treasury Secretary, Martin Parkinson, gave a speech in the lions den of the Australian Industry Group National Forum (perhaps not lion’s den, more like cat’s basket). In it, the head of the Australian Treasury held forth on the benefits and risks of the mining boom. It was a very long speech and I won’t

26

Australian dollar caught in euro downdraft

Italy was downgraded by S&P this morning and it has served to underpin the poor price action in European equities overnight, knocked the Dow and S&P futures out of their slumber and whacked the AUD and EUR which look headed a couple of cents lower. I’ve been trying to post for a couple of hours

23

Commodities tell the tale

Last night, the Dow again escaped heavy losses on hope that the Europe will get its act together. Commodities, however told a different story. There were across the board losses and it is looking increasingly like the strongest of the global markets is inexorably, if slowly, breaking down on waning global growth. Barring full blown

11

Greece dials in hope

The world now waits to see what the Troika has to say about Greece, at this stage it is anyone’s guess: Greece said in a conference call tonight between Minister of Finance Evangelos Venizelos and high representatives of the European Central Bank, European Commission and International Monetary Fund “a productive and substantive discussion took place.” Tomorrow morning, the teams

4

London house prices surge on chaos

From Bloomberg yesterday came the below report stating that house prices in London surged in September after falling the previous month: London home sellers raised asking prices by the most in seven months in September as a lack of properties for sale and investors looking for safer assets amid financial-market turmoil bolstered values, Rightmove Plc

108

The housing production line

As regular readers would know, the debate continues about the role of planning regulations on housing supply and the resulting price implications.  Yesterday our favourite Unconventional Economist elaborated his views in an exploration of town planning and the UK housing market, so I feel it is an opportune time to elaborate the opposing argument – why the

5

Trading Day

The S&P/ASX 200 Index reversed Friday’s gains and closed down 1.6% or 68 points to 4081, possibly on reaction to President Obama’s deficit cuts and tax hike plan. In after hours trading, the market is steady whilst the Euro and US futures point to similar losses. Asian markets experienced similar moves, although the Nikkei 225

13

Australian dollar weekly wrap

Welcome to this week’s edition of the Australian Dollar weekly wrap and outlook. We’ve moved it to Monday to better sync with trade. The AUD traded down to a low around 1.0180 last week as concerns grew that Europe was going to be unable to get itself sorted and avoid a Greek bailout. The positive

24

Booting Geithner

Obviously the big news from Europe over the weekend was the exiling of Timaaaayyy! Anyone who has read Andrew Ross Sorkin’s account of the US GFC bailouts, Too big to fail (or seen the movie), will know that Tim Geithner is the ultimate pragmatist. From his position as the head of the New York Federal

19

Chart of the Day: Decoupled from reason

A meme that is making the rounds is that the growth trajectory of the developed markets (EU, US, Japan etc) don’t matter, as they now make up just under half of total world economic growth, the remaining half filled by the fast growing developing or emerging markets. Therefore, even a slowdown or outright recession can’t

49

Politico-housing complex goes on tour

There’s nothing like a breath of honesty. From the SMH today: As global investors curb their exposure to Europe’s troubled banks and governments, Australia’s biggest issuers of bonds plan to step up their marketing efforts in a meeting with key US fund managers this week. In the first co-ordinated roadshow of Australian credit market players,

201

The people want a mining tax

Per Capita is a small progressive thing tank run by former LEK consultant, David Hetherington. Today it released a new study of Australian attitudes towards the tax system. Hetherington says: The Per Capita Tax Survey for 2011 has asked 1,300 Australians for their views on personal tax contributions, overall taxation levels, public service spending and

30

UK moves to reform planning disaster

I have written previously on how the United Kingdom (UK) housing system is arguably the worst in the world because of a myriad of policies that work to severely restrict supply, pump demand, and make renting a highly undesirable substitute for home ownership. These policies have led to the UK housing market experiencing: 1) a