Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
This is an edited version of a live discussion, in which I discuss the latest from the financial markets with Damien Klassen, Head of Investment at Nucleus Wealth and Walk The World Funds. How have earnings season turned out, and where might the markets go next. How will the tussle between Bonds and Stocks play out?
Go to the Walk The World Universe at https://walktheworld.com.au/
It has been many months since our last broadcast on ‘In the Interests of the People’ and many of you the audience has wondered where have we gone?
John Adams was last seen on this platform 7 months ago on 11 October 2023 and then he just disappeared?
Rumours on the internet and social media have been swirling around what has happened to Mr Adams?
I have no doubt that ASIC officials have also been wondering the same! ASIC was one of our most loyal viewers in 2023!
It is worth remembering that this channel started a national conversation about financial crime in September 2022;
On 6 October 2022, Adams published his statistical analysis about ASIC’s handling of reports of alleged misconduct. At this time, the Adams Report was covered by ABC and News.com.au.
On 27 October 2022, in response to the Adams Report, the Australian Senate voted 43 20 to establish an inquiry into ASIC after Senator Bragg moved a motion.
Then this channel led the national coverage about ASIC where we broke some of the biggest stories including that ASIC officials scheming to fix parliamentary proceedings by planting Dorothy Dixers as well as ASIC Chairman Joseph Longo giving the order for officials stop Senator Bragg for pursuing the current Senate inquiry.
This channel started contemplating the proposition of corruption happening at ASIC and our coverage considered the newly National Anti-Corruption Commission.
We also played the testimony of various witnesses who appeared at the ASIC inquiry – including the devastating testimony of former Chair James Shipton.
Next month, the Senate Inquiry will be handing down its much-anticipated report – 18 months in the making.
Be rest assured that Adams’ dedication to the interests of the people remains resolute and unshakable. Soon enough, Adams will make his return. There is an extraordinary story to be told.
In our latest rant Edwin and I tease apart the news surrounding the budget “announcables” relating to housing, discuss the rise of the “distressed sale” and examine how the WeChat Chatters are calling out Victoria as a place to exit.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
The Budget on Tuesday evening comes at an interesting time in the life of the current Government, as well as for ordinary Australians.
With a year or so to go before the next election which must be held by May 2025 at the latest. (or sooner perhaps if Albo sees a window of opportunity) this would normally be a give-away budget to set the scene. Except that with inflation still strong and being driven by local factors such as wages growth and energy costs, as well as high housing costs thanks to very strong migration, the headroom is limited, at best.
The Announcables so far, which have continued through the weekend, are portraying it as a responsible budget aimed at containing inflation, supporting housing, and quote good for women.
Charlmers said this week his goal was to chart “the responsible middle course between those who want us to slash and burn in the budget, and those who think that it should be some kind of free-for-all of spending”.
Others less charitable might say it will contain a wadge of announcables, which sound good, but which are not tackling the real long term issues Australia faces.
Remarkably it seems further tax payer funds will flow to the construction sector. While the Governments goal of 1.2 million well-located homes built in five years starts on 1 July, remember just 12,850 homes were approved for construction in January. This seems a gulf which needs way more than announcables and political party tricks.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
This is my weekly market update, starting in the US, crossing to Europe, then Asia and ending in Australia plus commodities and crypto.
An unusually strong solar storm hit the Earth overnight producing northern lights in the US and Europe and southern lights across Australia, including Queensland. Bright auroras were visible at unusually low latitudes. The G5 geomagnetic conditions could potentially disrupt power and communications with warnings to governments and critical infrastructure operators about the potential impacts on infrastructure and essential services.
This reminded me that things can be unpredictable, and markets risk surprises in the weeks and months ahead, as Central Banks, who created the massive inflation storm by their own actions, try to reverse the effects through higher for longer interest rates. Meantime Government debt continues to rise, together with the costs of debt servicing, and many ordinary households are caught in the crossfire. Yet financial markets are still hopeful.
On Friday shares in New York were modestly higher, with techs somewhat lagging. But all three indexes were up for the week with the blue-chip Dow nabbing its largest Friday-to-Friday percentage advance since mid-December. The benchmark S&P 500 index is up over 9% for the year, up near its late-March record high, following a 5% pullback that occurred last month.
The question of how independently will other Central Banks move their base rates ahead of the FED comes more into view. More broadly is the U.S. exceptionalism trade fading?
And what does the demise of Perpetual, like the fall of AMP before it, also tells us about the changing nature of Australia’s financial services sector: the growing scale and power of the superannuation sector; the rise and rise of passive investing and private capital; and the global struggle to make the listed funds management model work?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Housing affordability is shot, as we have been discussing, thanks to demand stoked by high migration, higher lending multiples as the financial system was deregulation, and higher interest rates mirroring the RBA’s battel to tame inflation. As a result first time buyers are delaying their purchase by several years, and more borrowers are leveraged up to the gills, despite first home grant schemes, and shared equity schemes, which as the Productivity Commission showed did help a few get into the market, but lifted prices for everyone else, so did not help structurally.
Australians are already among the highest carriers of household debt in the world. In fact, according to Domain’s 2024 First Home Buyer Report, an entry-price home in Melbourne costs $678,000. In Sydney, it jumps to $927,250. Looking outside the two major cities reduces the cost to $545,000. To be lucky enough to secure any of these options, a 20 per cent deposit will set you back between $109,000 and $185,000.
So where do prospective buyers get that sort of cash? Well some might be able to get help from the Family Bank, as I showed recently, the average is more than $106,000 now, great if you have wealthy parents. Others may be able to save, but it’s a long road, and whilst interest rates are higher than they have been for some time on deposits, it will take years, and longer still if rates are cut later. Then of course there is the old chestnut, use accumulated super.
This week we got a draft report from the parliamentary committee chaired by prominent superannuation critic Andrew Bragg which has upped the ante on the Coalition’s super for housing policy, suggesting first home buyers should be able to withdraw all their retirement savings to buy a house or use it as collateral to help borrow.
My view is that this is actually a proxy political war on the purpose and nature of superannuation, rather than a real honest discussion about how to fix the broken property market. It is in essence a mixture of misdirection – look over there, not here, and avoid the more critical issues of migration control and increased and better-quality supply of affordable housing. Or in other words, it’s a case of fiddling while Rome burns, again.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
According to a recent report, Australian capital cities are becoming more segregated along socioeconomic lines. And the trend is worst in Sydney. Inequality is rising.
The Conversation published: Our cities are widening the divide between the well-off and the rest. How can we turn this damaging trend around? Written by three researchers from the University of Sydney.
They talked about the so called “latte line”, the infamous, invisible boundary that divides Sydney between the more affluent north-east and the south-west. Historically, people north of the line enjoy better access to jobs and education, and can capitalise on rising property wealth. This has reinforced economic inequality.
Sydney emerged as the most segregated and unequal of the five cities. The latte line is getting stronger. Other cities also showed rising inequality.
Bad policy is creating a more and more unequal society. The traditional idea of Australia as an egalitarian society is dying. The property market is the problem, but Governments are ignoring the consequences, and focussing on “announcables” as we discussed yesterday. We need to do better!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Those following my regular Property Rants with Edwin will know we have been speculating that there would be budget measures announced next week to help property developers. Well, they could not wait it seems…
The 600,000 plus migrants arriving in Australia this past year are continuing to put more pressure on the housing sector, and helps to explain the fact that rising rents, interest rate hikes and surging living costs in the past few years have inflamed what was already among the world’s least affordable housing rental markets, where record numbers of people can no longer afford to buy after a surge in house prices.
In fact, the federal government wants to find tens of thousands of workers to help build new homes in an attempt to address Australia’s ongoing housing crisis, reacting to pressure from the Construction sector, which already employs about 1.35 million workers across the country.
Of course, the logical step would be to right size migration to match the capacity to build new homes, which with a following wind might be around 150,000 each year. That should be core Government Policy. But no.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
This is an edited version of a live discussion, as we looked at the latest data on mortgage and rental stress, and many other metrics from our models, which gives us a view of how households are really travelling in this higher for longer rate environment, and in the light of the RBA’s rate decision.
Go to the Walk The World Universe at https://walktheworld.com.au/
https://digitalfinanceanalytics.com/blog/dfa-one-to-one/ for our One to One Service.
Another outing with our property insider Edwin Almeida, as we kick around the latest news and data across the Australian Property market.
Can you believe the theoretical housing announcables? Where is demand for property really coming from? What is the story of overseas purchasers?
Plus, we look at the latest numbers, and Edwin was a tip for the week!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
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