Author: Martin North

Martin North is the Principal of Digital Finance Analytics

First Take: Mortgage Stress July 2022

This is a first take on the latest results from our models, which shows a further rise in mortgage and rental stress (defined in cash flow terms) across Australia. We examine the high-level results by state, segment and post code, and also present the latest stress heat maps, which highlight the growth of pressure in the newly developed zones across the country, as well as in some regional communities. Stress has risen thanks to rising costs of living, increasing mortgage and rents, while real incomes continue to fall.

We also include some suggestions as to how to manage stress. Call the National Debt Helpline on 1800 007 007 for free and confidential advice from professional financial counsellors. But be careful of those offering advice for a fee, it is big business, and many who are struggling are being conned.

Go to the Walk The World Universe at https://walktheworld.com.au/

Land Banking Is Part Of The Housing Problem!

We unpick the “supply-side” problems which are often blamed for high home prices, and in the light of a recent report, find that Land Banking is a significant issue, as large players hold on to land parcels to exploit prices rises. This means you cannot solve affordability by changing planning rules! In addition, there is significant information asymmetry and financial players benefit from the current arrangements – while State and Federal Governments look the other way.

Go to the Walk The World Universe at https://walktheworld.com.au/

Things Just Got Complicated…

In this week’s market review in what was a chaotic week, we look at how the financial markets reacted to bad news on inflation, and rising target rates from Central Banks, and solid earnings from tech megacaps which brought some solace to traders though worries about recession risk remain.

After Thursday’s data showed the U.S. economy contracted in the second quarter, stocks rose as traders bet rates would rise more slowly. But is this rally within a bear market or the start of a new bull market. I will give you a clue – hopium is driving things not logic.

But after a horrific first half, the S&P 500 had its best month since November 2020 and Nasdaq 100 had its strongest performance since April of that same year. But this could come to haunt the Federal Open Market Committee.

US financial conditions are looser than they were when Fed hiked in March. So the spike raises the question of when the rebound itself starts to work against the goal of draining bloat from the economy.

It’s an issue investors must weigh in calculating the recovery’s staying power. “Our view is that earnings for all equity classes likely will peak in 2022 and move lower as the economy weakens, revenue growth stalls and input costs remain elevated,” strategists with the Wells Fargo Investment Institute wrote in a note on Thursday.

Go to the Walk The World Universe at https://walktheworld.com.au/

Between The Devil And The Deep Blue Sea…

The truth is, Central Banks are caught – recession or kill inflation.

Meantime, the USD’s strength is strangling other economies.

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The CPI Numberwang Continues…

The latest from the ABS on CPI to June 2022. Overall 6.1% but non-discretionary at 7.6%, so poor households are getting hit hardest. Some one-offs, especially in NSW helped lower the number too. We need monthly data and a better basis of calculation to avoid the Numberwang game!

Go to the Walk The World Universe at https://walktheworld.com.au/

The Economic Establishment is in Full Panic!

Adams and North are back.

The past two weeks, Adams has been hosting seminars in Adelaide and Newcastle and they have been sold out events. The next seminar as part of his national road show will be in his home town of Wollongong on 18 August 2022 at City Diggers! https://www.eventbrite.com.au/e/staying-free-in-a-dangerous-world-australia-is-sailing-into-the-abyss-tickets-390438260347

The event is selling out fast and we have local celebrity and commercial radio announcer Maje Saba coming to MC the event. A link to the tickets can be found in the YouTube links.

Adams is intending to go to other parts of Australia in the weeks/months to come.

The economic establishment who in 2019 said there is no problem with debt and there was no debt bubble are now saying that they are concerned with rising interest rates to respond to inflation.

Christopher Joye knows that the house of cards can come down and this is why he is jumping up and down about aggressive rising interest rates. At the end of the day, Adams has been more correct about the dangers of debt, the impact of stimulus and the role that Australia’s foreign debt would have.

Choosing between protecting the debt or saving the Australian dollar is rapidly becoming a major decision point for Australian policy makes.

Christopher Joye dismissed my concerns as an expert in search of a headline! 3 years on and now Christopher Joye has changed its tune.

Last week, Joye wrote an extraordinary article calling the RBA “Inflation Nutters”! That they are raising rates too aggressively.

DFA Live Q&A HD Replay Damien Klassen: Investing Now

This is an edited version of our latest live discussion about the current state of the financial markets with Damien Klassen Head of Investments at Walk The World Funds and Nucleus Wealth. Included live questions from the audience.

Go to the Walk The World Universe at https://walktheworld.com.au/