Weekend Chartfest, 14-15 July, 2018

Australia       Major City House Values over last 25 years       House Price growth – Major Cities       Population Increase and Dwelling Investment       Population Growth       Net Overseas Migration by Visa – From July 5 Presentation made in Wollongong by Alexandra Heath    

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Weekend Reading: 14-15 July 2018

Global Macro / Markets / Investing: The Lifecycle of Greed and Fear – Collaborative Fund U.S. Yield Curve to Invert in Mid-2019, Morgan Stanley Says – Bloomberg Hell for Elon Musk Is a Mid-Size Sedan – Bloomberg It’s not wage rises that are a problem for the economy – The Guardian Are BlackRock’s Core Funds


Macro Afternoon

Asia finishes the week on a relatively upbeat note despite the continued trade war and ructions in Europe over Trump’s barnstorm visit. Stocks put on gains everywhere but mainland China as the trade data print came in mixed. The USD remains elevated against everything, especially Pound Sterling which continues to feel the heat of a


HSBC: Australian dollar to fall to 70 cents by year end

Via HSBC: USD rally to continue as the Fed tightens; Other central banks have delayed hiking creating asymmetric risk for the USD; Tumbling emerging markets are adding more upwards pressure the USD, and Neither USD valuations nor positioning is yet stretched. I would add a slowing China, falling commodity prices (especially bulks which are weakest in the


Bendigo Bank hikes mortgage rates

From Bendigo Bank: Variable interest rates across home loans and lines of credit will increase for owner occupiers and investors as follows: Owner occupier principal and interest loans will increase by 0.10% pa; Owner occupier interest only loans will increase by 0.16% pa; Investment loans will increase by 0.10% pa; Lines of credit will increase


Ray Dalio on universal basic income

Via Ray Dalio of Bridgewater: What is Universal Basic Income (UBI)? In general, UBI is a type of cash transfer that is: Universal: every citizen receives the transfer regardless of employment status or income. Unconditional: recipients have no restrictions on how they can spend the cash. Basic: the amount will cover “basic needs” and will constitute


CBA tightens mortgage expense checks

Via the AFR: Commonwealth Bank home loan applicants will from next week be subject to two rounds of detailed quizzing about their weekly spending on everything from school fees to gym memberships, children and pets. The formal categories cover: children; pets; clothing and personal care; communication; education; food and groceries; housing and property expenses; insurance; medical,


Why ‘skills shortages’ are good

By Leith van Onselen Thoughout the years, the chair of the Migration Council of Australia and big business lobbyist for the Australian Industry Group (AIG), Innes Willox, has urged the government not to cut immigration because of so-called ‘skills shortages’. For example, here’s Innes Willox writing in The Australian: Australia does not have a population problem


Treasury’s John Fraser warns against lifting interest rates

By Leith van Onselen Outgoing secretary of the Australian Treasury has thrown a wet blanket over economists’ calls for the RBA to raise interest rates. From The AFR: [Fraser] said “considerable care” needed to be taken to unwind the extreme fiscal and monetary policy interventions of the past decade. “As we all know, these interventions


Toronto house prices rebounding after sharp plunge

By Leith van Onselen Toronto’s housing market is showing signs of live after both prices and sales abruptly plunged. The Teranet-National Bank House Price Index for June was released overnight, which shows that house prices in Toronto have begun to rebound after plunging 7.4% between July and December 2017: As at June, Toronto values were 4.8%


Coalition lies about cutting immigration

By Leith van Onselen The Australian reports that Immigration Minister, Peter Dutton’s, “tough” vetting of migrants has slashed Australia’s permanent migrant intake: The annual permanent migration intake has fallen by more than 10 per cent to less than 163,000, marking the lowest level for more than a decade on the back of a crackdown on fraudulent


GetUp and Greenpeace right to trash the NEG

Via The Guardian: The Queensland and Victorian governments will be hit with a new television advertising campaign in an effort to persuade them to torpedo the national energy guarantee at a critical meeting in early August. The activist group GetUp has combined with Greenpeace to bankroll what it describes as hard-hitting television advertisements targeting the


ACCC energy idiocy exposed

From Bartho today: It is a measure of the complexity of the issues, the scale and number of the deficiencies and the difficulty of responding to them that the Australian Competition and Consumer Commission’s inquiry into energy affordability has come up with 56 recommendations. It is also a pointer to the convoluted nature of our


Is “The West” dead?

Via The Australian: Donald Trump created “utter panic’’ among NATO allies — who have agreed to pay more, and on a quicker timeline — after he warned the US could withdraw from the ­organisation in January if other wealthy countries did not ­immediately increase their spending on defence to 2 per cent of gross domestic


Younger Aussies trashed by migrant visa rort

By Leith van Onselen Analyst Conrad Liveris has picked apart the ABS’ quarterly employment data and revealed that younger Australian’s are finding it incredibly difficult to gain secure employment. From BuzzFeed: Nine out of every ten jobs created for Australians under the age of 25 in the last year were part-time, according to research… While


Chinese property buyers are GONE

From NAB’s quarterly property industry survey yesterday: -Survey-Q2-2018 NAB’s survey results have highlighted to a trend decline in foreign buying activity in recent quarters resulting from policy changes in China on foreign investment outflows and tighter restrictions on foreign property buyers in Australia. In Q2 2018, there were fewer foreign buyers in the market for


Westconnex has NSW taxpayers bent over a barrel

By Leith van Onselen MB has frequently questioned the efficacy of Sydney’s WestConnex toll road and tunnel project – the $17 billion 33 kilometre motorway under construction that is more expensive per kilometre than the Chanel Tunnel. This hideously expensive project will see existing free public roads like the state-owned M4 (that have already been paid


The Treasury is about to become even more politicised

By Leith van Onselen This site has previously lamented the gradual denuding of Australia’s public service, which has been stripped raw by decades of government outsourcing, waves of senior redundancies, as well as a preference for governments to seek advice from paid consultants, erroneously named ‘think tanks’, and political staffers. The end result has been


CoreLogic weekly Australian house price update: more falls

By Leith van Onselen In the week ended 12 July 2018, the CoreLogic 5-city daily dwelling price index, which covers the five major capital city markets, declined another 0.11%: Values fell across all major markets except Adelaide: So far in 2018, home values have declined by 1.93%, with only Brisbane and Adelaide recording a value


MB Fund Webinar: Assessing Safe Havens

Yesterday on MB Fund Webinar, Good Defence is the Best Offence, David Llewellyn-Smith, Damien Klassen and Tim Fuller examined: Can volatility be viewed as a whole or a sum of many parts?   Assessing the traditional safe havens: cash, bonds, gold, USD How stock selection can help insulate a portfolio in volatile times Tactics used at Nucleus


Links 13 July 2018

Global Macro / Markets / Investing: Mobius Says Trade War Is Just a Warm-Up Act for Financial Crisis – Bloomberg Stocks Quants Are Reeling From the Worst Run in 8 Years – Bloomberg Why bitcoin uses so much energy – The Economist A carbon tax would be less regressive than energy efficiency standards – VOX Taxing


Macro Afternoon

Another strange day here in Asia as risk does a turnaround as the focus of Trump’s ire moved to Europe and away from China ever so briefly. This caught the shorts short (guilty as charged) and lead a rally across the region with Chinese stocks leading the way. The Shanghai Composite has recovered its previous loss to


US and China mull new trade talks

Via Bloomie: After the U.S. unveiled a list of Chinese imports worth $200 billion that could face higher duties, China’s Vice Minister of Commerce Wang Shouwen called on his U.S. counterparts to resolve the conflict through a new round of bilateral negotiations. While that came amid fresh threats of retaliationfrom Beijing, it matches a willingness from