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31 July 2013 (AFR) – …how debentures debauched New Zealand

(31 July 2013, AFR, p21, David Chaplin) ‘Almost seven years since the cracks first appeared in the relationship, many New Zealand investors have yet to recover from their ill-advised love affair with debentures.’ <snipped…> ‘But with the failure of the tiny ($25.5 million) National Finance company in May 2006, the NZ debenture market began its terminal … Continue reading

31 July 2013 (AFR) – GSI – Hopes melt for frozen funds

(31 July 2013, AFR, p21, David Chaplin) ‘Investors in debentures offered by embattled finance company, Gippsland Secured Investments (GSI), should learn by Friday whether the firm, and its $150 million of frozen funds, will be placed into receivership.’ <snipped…> ‘Most prominently, the failure of another Victorian-based non-bank lender, the Banksia Financial Group, last October left anxious … Continue reading

31 July 2013 (TheAge) – Housing takes a hit as building approvals fall

(31 July 2013, The Age, BusinessDay, p37, Chris Vedelago) ‘Australia’s construction industry has suffered a setback as building approvals fell sharply in June instead of staging a rally. Nationally, building approvals fell 6.9 per cent, seasonally adjusted, over the month. It’s the second consecutive month of decline and construction activity is now down 13 per … Continue reading

31 July 2013 (TheAge) – Financial Advisers ahead of clients in LM liquidation line

[COMMENT: Here is a case where investors have trusted their financial adviser, who has left them high and dry. Are there any more like this looking around out there?] (31 July 2013, TheAge, BusinessDay, p29, Michael West) ‘Financial advisers who put their clients into LM Investment Management’s since frozen funds stand to collect millions in … Continue reading

31 July 2013 (TheAge) – Dark pools – Size of equity trades fall

(31 July 2013, The Age, BusinessDay, p27, Gareth Hutchens) ‘Algorithmic trading and dark pools continue to change the face of Australia’s equity market, with the average size of trades falling to just $4900, down from $11,500 less than three years ago. The Australian Securities and Investments Commission has released a new report on trading activity … Continue reading

30 July 2013 (AFR) – Hedge funds, already under scrutiny, hit performance crisis

[COMMENT: Thinking of investing in a hedge fund? Apparently they are not all what they are cracked up to be.] (30 July 2013, AFR, p18, and Financial Times Dan McCrum) ‘Hedge funds have a performance problem. Already under intense ethical scrutiny, Wall Street’s master stock pickers have also spectacularly failed to beat the market.’ ‘Since … Continue reading

30 July 2013 (AFR) – Bad debt in mining sector expected to increase

(30 July 2013, AFR, p17, George Liondis) ‘The mining sector is looming as the biggest bad-debt threat for banks as commodity prices fall amid concerns about the pace of growth in China.’ ‘A survey of senior executives at Australia’s banks found they expect bad debts to worsen among mining and mining services companies over the … Continue reading

30 July 2013 (AFR) – Body language giveaways in private company briefings

Alternate headline as printed: “When the whisper can turn into a wink and a nod” [COMMENT: This is a continuation of the public discourse that commenced last weekend in the Weekend AFR with the article on comments from Peter Morgan and Greg Perry.] (30 July 2013, AFR, p13, Matthew Drummond, John Kehoe and Joyce Moullakis) … Continue reading

30 July 2013 (TheAge) – Economy at a turning point

(30 July 2013, The Age, BusinessDay, p21, Glenda Kwek) ‘The mining investment boom is winding down sharply, with the next few months set to be a turning point for the Australian economy, a report by a leading business advisory group has found. The value of planned projects, those under consideration or possible, fell 14.3 per … Continue reading

July 2013 (AICD) – Mining’s looming storm

(July 2013, Company Director magazine from AICD, p24, Tony Featherstone) ‘Many junior explorers are skating on thin ice, considering hibernation and slashing costs and board positions as they hunker down for a cold winter in the mining sector.‘ ‘Picture this: a junior mining stock plunges from $1 to 10 cents in a year. The company … Continue reading

29 July 2013 (AFR) – Surging prime central London prices spark bubble fears

(29 July 2013, AFR, p17, and Financial Times, John Authers) ‘Yet again, the London property market is at the centre of attention. This week, Britain unveiled the second stage of its “Help to Buy” scheme – £12 billion in mortgage guarantees, to aid first-time buyers, and also help push up prices.’ ‘Meanwhile, a new survey by … Continue reading

29 July 2013 (AFR) – Sydney’s homes market hits a 10-year high

(29 July 2013, AFR, p3, Nick Lenaghan) ‘Investor confidence, buoyed by rising house prices, has pushed activity in Sydney’s residential housing market to its highest levels in more than 10 years. In Melbourne, the weekend property market also performed strongly, and prices rose 5 per cent in the June quarter.’ ‘The clearance rate for weekend auctions … Continue reading

29 July 2013 (TheAge) – (property) Chock-a-block: bidders pour in to fight for former beauty

(29 July 2013, The Age, BusinessDay, p25, Nicole Lindsay) ‘Nine bidders slugged it out for a dilapidated double-storey terrace in East Melbourne, with the new owner paying $1.49 million under the hammer. ”It rained bids,” Dixon Kestles agent Kizzy Okoukoni said.’ <snipped…> ‘More than 200 people passed through the 10-room house, attracted by its remnant … Continue reading

27 July 2013 (AFR) – Beware the wipeout clause in bank hybrids

(27 July 2013, AFR, p27, Christopher Joye) ‘With Westpac completing an $850 million ASX-listed bond issue last week, soon after ANZ’s $1 billion worth of convertible preference shares, there are unresolved issues hanging over the hybrid sector. The key question for investors is how the embedded weapons of mass destruction known as non-viability triggers – inserted into … Continue reading

27 July 2013 (AFR) – Inside the insider trading debate

[COMMENT: This is the sister article and more-detailed story, on this explosive topic about the privileges that big fund managers have with access to privileged information, compared to the unfortunate retail investors. A must read…] (27 July 2013, AFR, p14, Matt Drummond) ‘It’s not what you know but who you know. It turns out this … Continue reading

27 July 2013 (AFR) – Funds experts call for ban on personal company briefings

[COMMENT:- This is a potentially explosive article – a huge exposé. A must read for all investors and traders. Also see the related AFR Weekend Feature Article.] (27 July 2013, AFR, p2, Matthew Drummond) ‘Two doyens of the fund management industry admit they gleaned inside information through exclusive access to corporate executives, giving them an … Continue reading

26 July 2013 (The Age) – Waiting for the bust to settle

(26 July 2013, The Age, BusinessDay, p23, Adele Ferguson) ‘Official statistics reveal that two companies a day in the construction and building-related sector are collapsing, as late payments from creditors worsen, activity dries up and banks put the squeeze on funding.’ ‘The latest statistics on liquidations and voluntary administrations show that between June 1 and … Continue reading

26 July 2013 (The Age) – Playing election odds on McMillan

[COMMENT: MacMillan Shakespeare’s poor fortunes during the week… Read the details in this story…] (26 July 2013, The Age, BusinessDay, Richard Hemming) ‘As we all know, McMillan Shakespeare’s share price halved at one point on Thursday as questions belatedly emerged as to how much of its profits came from these “novated” lease deals on employees’ … Continue reading

26 July 2013 (AFR, Fin Times) – ETF concern after surge in failed trades

[COMMENT: Are ETFs a useful instrument for retail investors to be trading? Are they liquid enough? Can they be trusted?] (26 July 2013, AFR, p18 and Financial Times, Tracy Alloway and Arash Massoudi in New York) Market turbulence revives fears over ETF structural issues ‘Falling equity markets have resulted in the highest level of failed … Continue reading

25 July 2013 (AFR) – House prices at record across the nation

(25 July 2013, AFR, p46, Duncan Hughes) ‘Record low interest rates and solid ­economic conditions are boosting buyer interest and contributing to record-high prices across the nation, according to analysis by APM Property Data. Prices increased by an average of 2.8 per cent during the June quarter, with Melbourne’s topping 5 per cent, despite concerns about a … Continue reading

24 July 2013 (AFR) – Slave to the algorithm

[COMMENT: Are the machines really running the trading desks and making the trading decisions?] (24 July, 2013, p44, Sarfraz Manzoor) ‘At 1.07pm on the afternoon of Tuesday, April 23, a tweet from the AP news agency in Washington was published. It read “Breaking: Two Explosions in the White House and Barack Obama is injured.” This … Continue reading

24 July 2013 (AFR, Fin Times) – ‘Flipping’ makes US comeback as house prices rise

(23 July, 2013, AFR, p21, and Financial Times, By Anjli Raval in New York) ‘Flip That House, along with other US reality television programmes about investors who bought properties to revamp and sell for a quick buck, went dark when the housing market crashed. But now bargain hunters looking to make a profit, and the … Continue reading

24 July 2013 (TheAge) – Failure to call the market is no fluke

[COMMENT: Here is some confirming evidence that fund managers (and economists in general) cannot get it right very often – but then many retail investors in managed funds might have realised that if they follow their fund’s performance. Find out more in this article below…] (24 July 2013, The Age, MONEY, p3, David Potts) ‘It … Continue reading

23 July 2013 (The Austn and Wall Street Jnl) – Detroit’s collapse hits Euro banks

(23 July 2013, The Australian, p22, and Wall Street Journal,DAVID ENRICH and JOHN LETZING) Detroit’s Bust Stings European Bank ‘Detroit’s broken finances are intersecting with the troubled European banking industry, causing further distress for both the Motor City and its European lenders. The situation demonstrates the ways in which European banks are still paying the … Continue reading

23 July 2013 (The Australian, Wall Street Jnl) – Losses mount as commodity cycle unravels

(23 July 2013, The Australian, p1, and Wall Street Journal, CHRISTIAN BERTHELSEN) Investors, Analysts See End of Commodity ‘Supercycle’ ‘Investors are suffering mounting losses as a decadelong rise in commodity prices unravels amid slowing emerging-markets economies, rising supplies of oil and metals and the eventual end of central-bank stimulus policies that propped up prices for … Continue reading

22 July 2013 (AFR) – Sydney’s auction clearance rates hit new high

(22 July 2013, AFR, p9, Duncan Hughes) ‘Volatile sharemarkets, low returns on fixed income and low interest rates contributed to clearance rates of more than 80 per cent in Sydney property auctions, some of the highest rates since the financial crisis.’ ‘Buying was particularly strong in the $1 million to $1.5 million range but continued to be flat … Continue reading

22 July 2013 (AFR) – Business confidence among ASX 300 companies falls

(22 July 2013, AFR, p4, Joanna Heath and Jason Murphy) ‘Business confidence among Australia’s 300 largest companies has slipped back into negative territory, despite those companies reporting better operating conditions than the broader economy. Business confidence among ASX 300 companies fell in the June quarter to minus 3 index points compared with 4 index points the … Continue reading

20 July 2013 (AFR, NY Times) – Detroit: From boom to bust

(20 July 2013, AFR, p12, and New York Times, MONICA DAVEY and MARY WILLIAMS WALSH) Billions in Debt, Detroit Tumbles Into Insolvency ‘DETROIT — Detroit, the cradle of America’s automobile industry and once the nation’s fourth-most-populous city, filed for bankruptcy on Thursday, the largest American city ever to take such a course.’ ‘The decision, confirmed … Continue reading

20 July 2013 (AFR) – Northern China’s city of ghosts

[COMMENT: There have been reports in recent times of infrastructure construction in China that seems to be excessive – highways that go no where, and towns with no one living there. This article talks about an entire city. Make sure to read this…] (20 July 2013, AFR, p17, Angus Grigg) ‘On the top floor of … Continue reading

20 July 2013 (AFR) – Consistency the key in picking (fund) managers

[COMMENT: Here’s a great article about the (lack of) consistency with the performance of fund managers, reinforcing the age-old statement “past returns are no guide to future performance”. Read what Philip Baker says below.] (20 July 2013, AFR, p25, Philip Baker) ‘There’s a very good reason why the popular mantra “past performance is no guide … Continue reading