Having our flagship resources industry rely on foreign credit and politically driven Chinese demand is unstable enough. Now our house prices rely on them as well!
April 4th, 2010 | Nickolai Hubble | 9 comments | ContinuedAll Posts Tagged With: "Kris Sayce"
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
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
If Market Keeps this Way, There May Be More Beaten Down Stocks
It’s quickly becoming a market where you’re worried more about the preservation of your capital rather than capital appreciation or even dividends. Late last night we read the latest monthly report from Australian Wealth Gameplan, edited by Kris Sayce. Kris has come up with a way to hedge against the falling Aussie dollar and listed all the collateral damage that would occur if the currency falls more.
February 9th, 2010 | Dan Denning | 11 comments | Continued
Goldman Calling for US$100 Oil by 2011
Goldman’s oil analyst Jeffrey Currie is referring to what we termed last year, “The Long Aftershock.” It refers to the 2007 oil price crash sowing the seeds for the next oil bull market. Currie says his analysis leads to the conclusion that, “By 2011, the [oil] market is back to capacity constraints…The financial crisis created a collapse in company returns which has significantly interrupted the investment phase.”
January 19th, 2010 | Dan Denning | 4 comments | Continued
A Funds Industry Built on Turning Debt into an Income Paying Asset
The funding model for the funds industry was seriously strained by the outflows. As we understand it, the funds have three sources of funding: deposits, bank credit facilities, and the mortgage payments it receives from mortgagees (commercial and residential). The bank credit facilities are exercised either to make new mortgage loans or pay out withdrawals that exceed what the fund takes in via mortgage payments.
January 14th, 2010 | Dan Denning | 109 comments | Continued
Trickle of Chinese Money into Australian Housing and Equities Small Compared to Growth in Bank Lending
Chinese bank lending surged by over US$1.35 trillion in 2009, according to Shaun Rein at Forbes. Much of that money went into stocks. And a lot of it went into Shanghai and Beijing real estate. Whether China bought itself a bubble is a very good question. One important point is that Chinese lending is based on savings…and isn’t borrowed (in U.S. fashion).
January 12th, 2010 | Dan Denning | 1 comment | Continued
A Sovereign Debt Crisis Bullish for U.S. Dollar and Bearish for Gold
In fact you don’t have to imagine it all. Or be insane. Bloomberg reports that, “Dollar Rises as Stocks, Commodities Fall in Flight From Risk.”
February gold futures fell below $1,100, down 2.5%. The Dow Jones Industrials fell 1.27%. The S&P 500 shed just over 1%. And the U.S. dollar rallied against all 16 currencies in the dollar index. What gives?
December 18th, 2009 | Dan Denning | 0 comments | Continued
What Kind of Investor is Happy to Lose Money Over 90 Days?
But there are some strange and perplexing crumbs to collect from news reports this morning. Yesterday we learned that for the first time in 70 years, yields on 90-day U.S. government securities were briefly negative. Investors – if you can call them that – were happy to loan money to the U.S. government for 90 days – and lose money.
November 25th, 2009 | Dan Denning | 20 comments | Continued
A Look at Debt and Super
But despite that warning, and despite debt far in excess of their incomes, Aussies are STILL spending money like it’s going out of fashion.
November 11th, 2009 | Kris Sayce | 4 comments | Continued
World of Super Collides With World of Credit Crunch
Meanwhile, mischief is still afoot in the world of superannuation. Australian super assets under management exceed $1.2 trillion. That’s the fourth largest pool of investable savings in the Western world.
November 11th, 2009 | Dan Denning | 2 comments | Continued
The Fed Has Put a Rocket Under the Market
The unconventional wisdom is that the Fed has learned nothing from the last bubble – or is so scared of deflation it’s willing to gamble on another bubble in asset prices. The trouble , the eventual bust in asset prices has to be reckoned up. And the Fed, along with all central banks who key off the Fed’s policy, are just kicking the can down the road, hoping asset values improve.
November 10th, 2009 | Dan Denning | 7 comments | Continued
Your Average Australian Super Fund
Is it down 0.8% for the year (since January) or in the last twelve months? Or is the average super fund down 0.8% from its all-time high? The average super fund fell 21% from its heights to its lows during the GFC. But the Aussie market has rallied 55% this year.
So does this mean super has done well? Average? Above average?
November 9th, 2009 | Dan Denning | 14 comments | Continued
Stocks Better than Bonds When Inflation is a Big Threat
What we make of it is that dividends used to account for a much larger percentage of your total return in stocks than they have in the last twenty years. Times change. There’s no rule that says the future has to be just like the past. But if stocks beat inflation, should you invest in stocks for income or capital appreciation? That’s the second question.
October 19th, 2009 | Dan Denning | 4 comments | Continued
Australia Possibly Among Top 10 Countries Globally Measured By Size of Gas Reserves
“We expect that Australia, in the very near future, will be among the top 10 countries globally measured by the size of its gas reserves. The size of Australia’s gas reserves means that further strong growth in this country’s LNG exports is assured,” Dr. Bethune said in Energy Quest’s latest quarterly report.
September 2nd, 2009 | Dan Denning | 8 comments | Continued
