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Sunday Macro, June 29

Sunday Macro –  Issues du jour….. China Beijing to back United States over new Fatca law against tax evasion (SCMP)  ..of course that would be a reciprocal basis for the US telling China who has what in the US system too wouldn’t it? Coming soon to a country near Australia?…. Property tycoon Zeng Wei jailed

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Weekend Macro June 28

  Weekend Macro Housing, the ultimate momentum trade (Reuters) …Edward Hadas with some good points… A Cheat Sheet for Understanding the Different Schools of Economics (Pragmatic Capitalism) …very good… Russia, Iraq, China and Europe – The Four Horsemen of the Geopolitical Apocalypse  (Market Oracle) Does cheap money mean governments care about the future? (SCMP) WTO

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Weekend Links June 28-29

China Party boss of China’s Guangzhou investigated for graft (Reuters) Doubling of Beijing’s cancer rate spurs pollution fears (MarketWatch) China’s Real-Estate Wrongs (Project-Syndicate) Moody’s warns Hong Kong banks over increased loans exposure to mainland (SCMP) China Pulling the Plug on Foreign Mainframes (Caixin) China’s Wealthy Should Move More Money Abroad, Investment Bank Says  (Caixin) Beijing-Tianjin-Hebei

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ASX at the close

Chris Weston, Chief Market Strategist at IG Markets Asia is mostly weaker, with Japan leading the losses after the yen strengthened on the back of a set of better-than-expected CPI data. The leads from US trade were actually quite mixed with most of the major Asian bourses pointing to a flat start. As a result

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O’Dwyer flags stricter foreign property regime

By Leith van Onselen Liberal chair of the House of Representatives inquiry into foreign property investment, Kelly O’Dwyer, has today flagged stricter rules and tighter enforcement of foreign property purchases, amid admissions that the current monitoring and enforcement system is failing. From the ABC: O’Dwyer, told the ABC criminal penalties were in place but no

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Premature celebration on carbon renegade

It seems the Abbott Government’s celebrations upon repealing the carbon tax might have been premature (via MB reader Disco Stu): According to The Australian today, several Senate cross-benchers have threatened to vote against the carbon tax’s repeal unless the Government extends subsidies to the automotive industry, which are slated for abolition once the local industry

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Retail pain will be prolonged

By Leith van Onselen The Fairfax dailies are running an article today on the $430 million blow to Australian retailers following the release of the May Federal Budget: Nearly $480 million has been wiped off the value of Australian retailers since the May budget was delivered… More than half a dozen retailers including Kathmandu Holdings,

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RBA: Housing woes are home grown

By Leith van Onselen The Reserve of Australia (RBA) assistant governor, Christopher Kent, has injected some good sense into the housing debate, arguing that Australia’s affordability woes are primarily home grown, rather than caused by foreign investment. From The AFR: …arduous planning processes, a lack of land and residents unwilling to accept higher-density housing in

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Bloxo pushes out rate rises

From Bloxo today: Growth in Australia had strong momentum around the turn of the year. Q1 GDP increased by +1.1% in the quarter and +3.5% y-o-y, which is above trend growth for Australia. GDP was supported by very strong growth in resources exports to China, as new mining and export capacity came on-line. At the

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Carbon #$%!&

I’m in danger of blowing a gasket today. Here are the free-market-loving young Libs celebrating the destruction of the carbon price, a market-based mechanism to address climate change: Apologies to Mike Bowers but what a bunch of #$%!&.

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Australian governance sinks to new low

Finance Minister Mathias Cormann appeared at the ABC this morning to reiterate his objections to a CBA Royal Commission and again referred any investigation to David Murray who is heading the current financial inquiry, even though Mr Murray’s tenure at the CBA is relevant to any investigation. What’s he going to do, Mathias, interview the mirror? For some

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PC warns on trade agreements’ hidden costs

By Leith van Onselen The Productivity Commission (PC) has issued a warning about potential deleterious costs for competition and business stemming from Australia’s so-call “free trade agreements” (FTAs). From The AFR: “Trade agreements can distort ­comparative advantage between nations and consequently reduce ­efficient resource allocation”… Building on its 2010 report which found the benefits to

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Daily iron ore price update (surge)

Here are the iron ore price charts for July 26, 2014: So! The paper market short squeeze tightens. The Dalian 6 month was especially impressive, limit up at one point,  and rebar futures were up 1% too. However, physical remains mixed. Spot is up firmly, although nothing like the 5-7% daily jumps we saw in

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Moodys warns house prices “overheating”

From Moodys last night: Moody‘s Investors Service says that Australia’s economic growth in 2014 has so far been resilient and expects expansion of2.6%-3.0% per annum over the next five years. Moreover, Moody‘s believes that near-term growth appears to be driven primarily by domestic consumption, rather than exports and resource investment.Moody‘s conclusions were contained in its just-released credit analysis “Australia”, which looks

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What hope of a CBA Royal Commission?

What a day. The senate is calling for a Royal Commission into the Commonwealth Bank of Australia (CBA) planner scandal. From the AFR: …“In effect, the CBA managed, for some considerable time, to keep the committee, ASIC and its clients in the dark,” said the report, tabled on the last sitting day of the current Senate.

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Basel lights Australian banks’s heart of darkness

From Banking Day: Quarterly “pillar 3” disclosures by banks may become more complex and also have to be produced on a more timely basis, if proposals from the Basel Committee on Banking Supervision come into force in Australia.The BCBS said this week that “in the wake of the 2007-2009 financial crisis, it became apparent that

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Links 27 June 2014

North America: Are auto loans a sub-prime crisis in the making? – Yahoo U.S. second-quarter growth forecasts cut on tepid consumer spending – Reuters Job Growth Is Up, Production Down – New York Times City Loses Final Appeal on Limiting Sales of Large Sodas – New York Times Butter is back, as Americans for the

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ASX at the close

Chris Weston, Chief Market Strategist at IG Markets Price action in capital markets overnight once again highlights traders’ love affair with stimulus and an easy stance towards monetary policy from certain developed market central banks. This concept still feels wrong, and one would have hoped that at this stage in the cycle we would be

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WA business confidence rolls downhill

The WA Chamber of Commerce has released it quarterly  survey of members today and it shows sentiment rolling steadily downhill: Business confidence in the WA economy has softened further according to the latest Westpac – CCI Survey of Business Expectations. The June quarter survey showed that 46 per cent of respondents expect conditions to deteriorate over

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Australia’s top ten plutocrats

From the newly released book of Mammon comes Australia’s top ten most wealthy totaling $73 billion: 1. GINA RINEHART: $20.01 billion, mining 2. ANTHONY PRATT: $7.64 billion, packaging 3. JAMES PACKER: $7.19 billion, gambling 4. FRANK LOWY: $6.87 billion, shopping centres 5. IVAN GLASENBERG: ? mining 6. HUI WING MAU: $6.35 billion, property 7. ANDREW