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How high can the China stock bubble go?

May 7, 2015 - 11:26 -- Admin

by Chris Becker Financial theory tells us that stock market bubbles and their demise are hard, if not impossible to predict and furthermore, history does not repeat itself or make “patterns”. Of course there’s a big difference when it comes to the practical side of finance, where human behaviour behind the bubbles and the busts

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Are markets forcing rate hikes on Australia?

May 7, 2015 - 10:51 -- Admin

That’s what Gotti argues today at Dad’s Army: Overseas investors hammered the Australian bond market last night sending prices lower and yields higher which will have dramatic ramifications for Australian shares, property, banks, interest rates and the broader Australian economy. A key driver in the bond sell off is that, as a result of long

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Ugly start on the ASX200

May 7, 2015 - 10:27 -- Admin

by Chris Becker Its an ugly start today on the local share market, with the ASX200 down nearly 1.5% on the open, with financials leading the way after NAB’s shock $5.5billion rights issue. The technical position here is dire if we close today or this week in the red, with 5500 points the next target:

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Construction PMI back in recession

May 7, 2015 - 09:44 -- Admin

From the AIG: Australian PCI®– Key Findings for April: •The Ai Group/HIA Australian Performance of Construction Index (Australian PCI®) slipped into contraction in April, declining by 3.1 points to 47.0. •The new orders sub-index shed half of last month’s solid gains and fell back into negative territory, dropping 6.2 points to 44.6. •Construction activity declined

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Ken Henry joins the oligarchs

May 7, 2015 - 09:39 -- Admin

Apparently Ken Henry is to succeed Michael Chaney as NAB chairman at the end of this year. I’m a bit torn by this. On the one hand, Henry is a sensible policy-maker with a strong sense of the public good, and may be well placed to help NAB navigate the very difficult times ahead. On

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NAB shocks

May 7, 2015 - 09:27 -- Admin

by Chris Becker The last cab off the rank in the banking oligopoly, National Australia Bank (NAB), which routinely has been the worst performer, has surprised the market this morning on two fronts. First, it announced a $5.5 billion capital raising getting ahead of its peers in terms of shoring up a paper thin capital

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Macro Morning (sell, sell, sell)

May 7, 2015 - 08:39 -- Admin

By Chris Becker As the bond market selloff deepens some surprisingly dour words from Fed Chair Janet Yellen last night sent risk into a tizzy, as she opined that: I would highlight that equity market valuations at this point generally are quite high. Not so high when you compare returns on equity to returns on safe

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Residex: Apartment boom is ‘mal-investment’

May 7, 2015 - 07:31 -- Admin

By Leith van Onselen Residex has released its house and unit price results for March, which revealed 0.95% growth in house values over the month but only 0.18% growth in unit values. Over the year, house values rose by 6.37% nationally, with unit values up by 5.33%: As shown above, Melbourne was the primary driver

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The RBA’s real own goal

May 7, 2015 - 07:08 -- Admin

The AFR has a bunch of quotes today suggesting that the RBA is going to reinstate its easing bias today: Alan Oster, the chief economist at NAB, questioned the Reserve Bank’s decision to cut the cash rate while simultaneously dropping the easing bias and highlighting positive signs across the economy. …”If you want to boost confidence, I’m not sure

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NAB raises equity as APRA squeezes

May 7, 2015 - 07:07 -- Admin

From the AFR, NAB is in a $3 billion rights issue: The equity is expected to bolster NAB’s balance sheet and give new chief executive officer Andrew Thorburn and chief financial officer Craig Drummond optionality as they study a number of potentially significant deals. NAB last raised equity in 2008 when it took $3 billion in an institutional placement

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