Will the property bubble burst or simply deflate?
As Aussie housing prices have risen dramatically in recent years and LVRs have skyrocketed, leading economists and investment advisers have weighed in on the issue of whether Australia is experiencing a “housing bubble” and, if so, whether it will eventually “pop” or quietly deflate. Today we summarise several perspectives: 1. Jeremy Grantham, Chairman, GMO Australians…
Commodities risk an extension of the stockmarket
Commodities prices have been exceptionally volatile in recent weeks, with big daily rallies and plunges intermingled. Seemingly without rhyme or reason, commodities surge one day as traders crave riskier bets but then fall the next as they flee risk. While this commodities risk trade often looks capricious and schizophrenic, it actually has a logical and…
Sonray Collapse Gives CFDs An Unfair Rap
The collapse of Sonray Capital Markets has put the spotlight on the fastest growing trading instrument in Australia, contracts for difference (CFDs). Since 2002, when CFDs were first launched in Australia, tens of thousands of Aussie speculators have been successfully trading them – taking long and short positions over domestic and international equities, indices, foreign…
The RBNZ prepares to kick-off a lengthy tightening cycle
By Chris Tedder, Research Analyst, Forex.com The Reserve Bank of New Zealand is expected to kick-off a prolonged tightening cycle this week by increasing the official cash rate by 25bps to 2.75% (the announcement is due at 2000GMT tomorrow). This represents a significant turning point in monetary policy in NZ. The RBNZ has kept the…
Stock Of The Week
By George Whitehouse – StockVal Investment Analyst Washington H. Soul Pattinson and Company (ASX:SOL) is one of Australia’s oldest companies. When Caleb Soul and his son Washington opened their first store at 177 Pitt Street, Sydney, in 1872 neither of them could have imagined that over 130 years later their single pharmacy would have evolved…
Risk on? Australian banks skirt unofficial home lending limits
By Rodney Maddock, Monash University Australian banks are much more heavily exposed to mortgage lending than banks in most parts of the world, which is why the latest publication of APRA data on home lending has set the hares running. The data showed 14% of the recent mortgage lending by banks has been for loans…
Market crash signals
Before the tech crash of 2000, some keenly attuned investors spotted something unusual. Although the major US indices – the Dow and the S&P 500 – continued to climb, the gains were made by a declining number of stocks, mainly Internet stocks. A shift in investor behaviour was clearly in the making as stock movements…
Intervene or wait? The RBA faces tricky path to a lower dollar
By Mark Crosby, Melbourne Business School Reserve Bank Governor Glenn Stevens has again weighed in on the value of the Australian dollar, telling a group of economists the bank is open to the idea of intervening to bring its value down. With the Australian dollar having been plus or minus ten cents from parity…
Reserve Bank gives the economy a lift
– The cash rate has been cut by a quarter of a percent to a record low of 2.00 per cent. The Reserve Bank hasn’t provided any guidance on future interest rate changes. What does it all mean? – This is the decision that the economy had to have: an interest rate cut but with…
Green hypocrites? Behaviour change in a consumerist society
By Peter Newton, Swinburne University of Technology Many Australians are happy to declare their interest in sustainability, to reducing their environmental impact. But how many of them are prepared to reduce the amount they actually consume? We recently explored whether Australian households have an “attitude-action gap” on environment and consumption. We surveyed 1200 Melbourne households,…
