The main conclusion was that Australia would see rising export earnings on higher volumes but moderating commodity prices. In other words, the China boom will drive export volumes for the next five years. But you won’t see any more mammoth increases in commodity prices.
March 3rd, 2010 | Dan Denning | 2 comments | ContinuedArchive for Dan Denning
Dan Denning is the author of 2005's best-selling The Bull Hunter (John Wiley & Sons). Dan draws on his network of global contacts from his base in Melbourne. He’s the managing editor of resource newsletter Diggers and Drillers and the editor of The Daily Reckoning Australia.
Statistical Models Can’t Predict the Future
But we do know that financial markets are getting more volatile in recent years, not less. Is it globalization? Is it the digitalization of trading data and continuous, algorithmic trading models? Does the pursuit of an informational advantage (or the belief that one is possible) drive people to trade more?
March 2nd, 2010 | Dan Denning | 6 comments | Continued
Bernanke Calls U.S. Economic Recovery “Nascent”
But remember, the central bankers telling us that America’s recovery is “nascent” and that Australia will benefit for many years from a “very big” investment boom in the resources industry are the same blokes who did not give you a single warning about what was coming in 2007 and 2008. Why is that?
February 25th, 2010 | Dan Denning | 18 comments | Continued
Economy of China to Decelerate?
But there are plenty of sceptics on the China story already. Our old friend Marc Faber told Bloomberg that, “It does not make sense for China to build more empty buildings and add to capacities in industries…
February 24th, 2010 | Dan Denning | 7 comments | Continued
U.S. Bonds Better than Greek or Other Sovereign Bonds
But as we’ve said before, the rally in the U.S. dollar and in U.S. sovereign debt is driven more by a preference for short-term liquidity than anything else. You can tell this is true because for longer-dated bonds, demand is weak. No one wants to lend to the Nation State for 30 years anymore.
February 24th, 2010 | Dan Denning | 2 comments | Continued
The Euro is a Symptom of Centralisation
But whether he’s right about Greece or not remains to be seen. Stock markets are meandering through February as if no clear signal about the pending sovereign debt crisis has been issued. Everyone seems to believe – assuming they are thinking at all – that Europe will get its fiscal house in order…
February 23rd, 2010 | Dan Denning | 1 comment | Continued
Hike in Fed Funds Rate Would Cause Damage to Collateral on Books of America’s Banks
It’s not the big money-centre banks in Wall Street you have to worry about. It’s the smaller regional and community banks. The Federal Deposit Insurance Corporation shut four more of them over the weekend. That’s 20 for this year, which is a lot less than the 140 last year. But if you wanted to see a spike in U.S. bank failures, you’d definitely raise interest rates.
February 22nd, 2010 | Dan Denning | 41 comments | Continued
The U.S. Dollar is Not the Euro
As the main rival (amongst paper currencies) to the dollar as a global reserve currency, the euro’s coming collapse has to, almost by definition, equal dollar strength. There just aren’t that many more liquid alternatives for large institutions and central banks.
February 19th, 2010 | Dan Denning | 4 comments | Continued
Banks Could Face Serious Trouble from Losses on Residential and Commercial Real Estate
“For the North Atlantic economies,” Debelle concludes, “this was a big recession which, combined with large falls in both commercial and housing property prices, should result in large losses.” He goes on to point out that the government-guaranteed larger lenders might survive these larger losses. But smaller regional banks might not.
February 18th, 2010 | Dan Denning | 50 comments | Continued
Comrade Conroy
Dear Dan,
I am replying to your email referring to the communications minister as “Comrade Conroy”. It saddens me to hear people using COLD WAR terminology to refer to anyone that they don’t agree with.
February 17th, 2010 | Dan Denning | 16 comments | Continued