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31 Mar 2014 (AFR) – Lucky? Australia is pre-Thatcher Britain, says economist

(31 March 2014, AFR, p26, Philip Baker) ‘Steen Jakobsen has had more than 25 years of experience in proprietary trading and alternative investments, but the Saxo Bank chief economist readily admits he’s never had a real job.’ <snipped…> ‘Last week, however, he was in Australia seeing clients and explaining the way he sees the world. And … Continue reading

31 Mar 2014 (AFR) – Investors hit back at ATO over share trading threat

(31 March 2014, AFR, p7, Patrick Durkin) ‘Investors have hit back at the Australian Tax Office’s threat to claw back million of dollars in franking credits, claiming it is a fishing exercise that extends beyond the agency’s authority. Thousands of fund managers, stockbrokers and sophisticated investors were hit with warning letters last week threatening audits … Continue reading

31 Mar 2014 (TheAge, SMH) – Heat off as abundance of stock reduces clearance rate

(31 March 2014, The Age, BusinessDay, p23, Nicole Lindsay) ‘Some of the heat in the market dissipated over the weekend as clearance rates weakened under the pressure of record stock volumes. It came as the Reserve Bank warned investors and home buyers that the rise in prices ”cannot continue indefinitely” and the Senate’s inquiry into … Continue reading

29 Mar 2014 (AFR) – Shares may be a better bet than housing

(29 March 2014, AFR, p26, David Bassanese) ‘For those who want to worry about the housing market, the Reserve Bank of Australia this week revealed two potential red flags suggesting we may be heading into bubble territory. In its six-monthly Financial Stability Review report, the RBA noted the share of housing finance approvals going to … Continue reading

29 Mar 2014 (AFR) – Dr Copper’s prognosis is a worry for markets

(29 March 2014, AFR, p40, Karen Maley) ‘Is the metals market sending out an SOS? The gold price slumped…’ <snipped…> ‘Meanwhile, the copper price is on track for a 12 per cent decline in the first quarter, despite a slight kick-up in the price overnight as some bearish traders moved to…’ <snipped…> ‘The steep drop in the … Continue reading

28 Mar 2014 (AFR) – RBA office supply warnings do not apply to Sydney and Melbourne: agents

(28 March 2014, AFR, p32, Nick Lenaghan) ‘Concern from the Reserve Bank of Australia about a potential oversupply in office space has generated a lukewarm response in the property sector, although there is agreement the Brisbane and Perth markets may face a glut. Instead, market players have seized on RBA governor Glenn Stevens’ optimism over housing … Continue reading

27 Mar 2014 (AFR) – Office vacancies increase as demand lags supply

(27 March 2014, AFR, p46, Michael Bleby) ‘East coast suburban office vacancies grew to an average 8.2 per cent in January, up from 7.5 per cent a year earlier, as growing demand failed to offset the expansion of supply in the suburban areas of Sydney and Melbourne, a new Knight Frank report shows. In Brisbane, by contrast, … Continue reading

27 Mar 2014 (TheAge) – Unit Technologies brothers (Young Rich List pair) Paul and Ian Everest fall victim to apparel consumer malaise

[COMMENT: Another indication that the general economy is struggling…] (27 March 2014, p23, Jared Lynch) ‘A clothing retailer that catapulted its founders to the BRW Young Rich List three years ago has collapsed. It is the latest victim in a long line of fashion failures as consumers pull back on spending and the big chains … Continue reading

26 Mar 2014 (AFR) – Can China keep its property prices under control?

(26 March 2014, AFR, p52, Angus Grigg) ‘As fears mount of a [China] property crash, the government is trying to guide prices lower. But property isn’t the only sector tht could hold nasty surprises, with dirty dealing in the steel industry posing problems of its own…’ Read more at AFR.com (might need AFR login access)

26 Mar 2014 (AFR) – Former Madoff associates found guilty of fraud

(26 March 2014, AFR, p41, Erik Larson, Patricia Hurtado and Bob Van Voris) ‘Five former aides to Bernard Madoff, who spent decades working for his company, have been found guilty of helping run the biggest Ponzi scheme in US history, a $US17.5 billion ($19.13 billion) fraud exposed by the 2008 financial crisis.’ ‘The three men and … Continue reading

26 Mar 2014 (AFR SmartInvestor) – Absolute return funds get real – The funds they are keeping from you

[COMMENT: So, we are starting to wake up that “set and forget”, or “buy and hold”, investing is not all it’s cracked up to be? About time!!] (26 March 2014, AFR, p27, Brendan Swift) ‘It was a fundamental building block of investment theory: diversification reduces risk and increases the chances of healthy, long-term returns. Then, … Continue reading

26 Mar 2014 (TheAge) – Investor Jeremy Grantham predicts bust ‘like no other’

(26 March 2014, The Age, BusinessDay, p23, Jared Lynch) ‘Legendary investor Jeremy Grantham says the US Federal Reserve is killing the recovery of the world’s biggest economy and the ”next bust will be unlike any other”. Mr Grantham, co-founder and chief investment strategist at $US112 billion ($123 billion) Boston-based fund manager GMO, said he would … Continue reading

26 Mar 2014 (TheAge) – Rail deals force major miners to operate at a loss

[COMMENT: Still some weakness in the economy…] (26 March 2014, The Age, BusinessDay, p21, Peter Ker) ‘Some of the world’s biggest miners are running Australian mines at a loss because the fixed costs of their rail contracts mean it would cost more to close them. Several coalmines in Queensland are understood to be operating under … Continue reading

26 Mar 2014 (TheAge) – House prices rise in step with incomes

(26 March 2014, The Age, MONEY, p7, Gareth Hutchens) ‘Are houses becoming less affordable? Well, it depends. The economist Craig James from Commsec published a good graph recently that compared the price of homes to disposable incomes in Australia. It shows the median house price is now about four times the…’ Read more at TheAge.com.au

25 Mar 2014 (AFR, Bloomberg) – Russia Facing Recession as Sanctions Likely to Intensify

(25 March 2014, AFR, p19, Andra Timu, Henry Meyer and Olga Tanas) ‘Sanctions imposed by the U.S. and the European Union are pushing Russia toward a recession as the intensity of their economic penalties increases after the annexation of Crimea earlier this month.’ ‘Banks including state-run VTB Capital say the world’s ninth-biggest economy will shrink … Continue reading

25 Mar 2014 (AFR) – China PMI in doldrums – Chinese manufacturing activity weakens: HSBC

(25 March 2014, AFR, p12, Angus Grigg) ‘China’s factory activity unexpectedly worsened again in the early part of March, falling to an eight month low. The HSBC and Markit Economics Flash PMI came in at 48.1, down marginally from the survey’s final reading of 48.5 in February. Economists had expected a slight bounce in the … Continue reading

25 Mar 2014 (TheAge, SMH) – No need to start panicking, China is still going great guns – A bigger pie is China’s main game

(25 March 2014, The Age, BusinessDay, p28, Michael Pascoe) ‘Another day, another Chinese purchasing managers index and, this time, another score below economists’ expectations – yet the Shanghai stock market is up a bit. Despite the now-usual fervour around a PMI, there’s no panic about the main game. Yes, the score of 48.1 for today’s … Continue reading

24 Mar 2014 (AFR) – High rents leave pharmacies on the brink

[COMMENT: Here is one indication that we still have issues in the broader economy that need to be worked through before the “recent” GFC (of 6 years ago) is well and truly behind us.] (24 March 2014, AFR, p34, Larry Schlesinger) ‘Some of Australia’s biggest pharmacy chains are seeking to renegotiate their rents with institutional … Continue reading

24 Mar 2014 (AFR) – Value trap can become a ‘nightmare’

[COMMENT: Here is a good example and discussion that supports the contention that value investing is not all it’s cracked up to be. Investors need to be aware of the pitfalls with the variety of ad hoc investment decision-making approaches – many of which work sometimes, but are continually peddled by the so-called experts in … Continue reading

24 Mar 2014 (AFR) – Iluka faces class suit over zircon forecast

[COMMENT: Important lessons! Investors beware! Perceived blue chip stocks are not infallible. And investing in the “next sure thing” (mineral sands and zircon) can be fraught with difficulties. Investors need to be diligent and on the ball to avoid these issues.] (24 March 2014, AFR, p22, Angela Macdonald-Smith) ‘Mineral sands producer Iluka Resources is facing … Continue reading

24 Mar 2014 (AFR) – Chinese steel sector shakeout’s first casualty: Haixin

(24 March 2014, AFR, p13, Lisa Murray) ‘Haixin Iron and Steel Group, the largest privately owned mill in Shanxi province, looks set to become the first major casualty in the shakeout of China’s steel sector amid reports it is struggling to pay back debts of up to 20 billion yuan ($3.57 billion). The mill has shut down … Continue reading

24 Mar 2014 (AFR) – ATO franking credit crackdown targets fundies, brokers and investors

(24 March 2014, AFR, p1, Patrick Durkin) ‘Thousands of fund managers, stockbrokers and sophisticated investors have been hit with warning letters threatening audits and heavy penalties if they do not confess to over-claiming franking credits on shares. Leading figures within the finance industry are fuming that … ‘ Read more at AFR.com (might need AFR … Continue reading

22 Mar 2014 (AFR) – Shares recover after Yellen jolt – Yellen sends investors on roller-coaster ride

(22 March 2014, AFR, p40, Max Mason) ‘Investors around the world held their breath this week as new US Federal Reserve chair Janet Yellen gave the clearest sign yet that the central bank intends to raise interest rates in the foreseeable future.’ ‘Following a meeting by the Federal Open Market Committee, which sets US monetary policy, … Continue reading

22 Mar 2014 (AFR) – Wave of Chinese defaults ahead, but no crisis

(22 March 2014, AFR, p40, Sally Rose) ‘Investors should expect hundreds, possibly thousands more credit defaults in China over the coming year, but Louis Kuijs, China economist at the Royal Bank of Scotland, says the central government remains in control and the world’s second-largest economy is on track to reach its target of 7.5 per cent … Continue reading

22 Mar 2014 (AFR) – Spike in defaults raises fear of China collapse

(22 March 2014, AFR, p26, Karen Maley) ‘Investors in Australian resources stocks were given more to worry about this week as the collapse of a Chinese property developer fanned fears the country could be on the verge of its own “Minsky moment”. This week Chinese government officials from the eastern town of Fenghua held meetings … Continue reading

22 Mar 2014 (AFR) – Goldman Sachs and the $130,000 property shock

[COMMENT: Who said the big banks, or investment banks, are not compassionate and fair? Surely this news story helps to clarify whether or not they are sympathetic to their customers, or simply out to get every dollar they can wring out of their ‘current’ customer base. You be the judge…] (22 March 2014, AFR, p4, … Continue reading

21 Mar 2014 (AFR) – Sharemarket drops 1.15pc after Yellen rate hike talk

(21 March 2014, p22, Sally Rose) ‘A surprisingly “hawkish” debut from new United States Federal Reserve chair Janet Yellen sent local (Australian) shares tumbling. The prospect that the US might lift interest rates sooner than expected, combined with ongoing fears about the volatility resulting from structural reforms to the Chinese economy, left investors cautious.’ Read … Continue reading

20 Mar 2014 (AFR) – NY takes on ‘potentially illegal’ high frequency trading

[COMMENT: This news this week will be sweet music to the ears of many retail investors and traders who have been worried for a while now that the all-powerful HFT traders are ripping them off and ought to be brought to account. Perhaps some restrictions on HFT will be forthcoming?] (20 March 2014, AFR, p35, … Continue reading

20 Mar 2014 (AFR) – High-speed trading faces New York probe into fairness

(20 March 2014, AFR, p20, Keri Geiger and Sam Mamudi) ‘New York’s top law enforcer has opened a broad investigation into whether US stock exchanges and alternative venues provide high-frequency traders with improper advantages. Attorney-General Eric Schneiderman said he’s examining the sale of products and services that offer faster access to data and richer information … Continue reading

19 Mar 2014 (AFR) – Graduate recruitment lowest since records began

(19 March 2014, AFR, Tim Dodd) ‘Job openings for graduates remain scarce with nearly one in five ­employers that usually employ ­graduates not taking any on last year. According to new data from ­Graduate Careers Australia the ­proportion of employers not recruiting new graduates was the highest since it began collecting this data in 2005. … Continue reading