"Intelligent Insight"
More analysis of recent price changes for property – this time in the West, and again strong correlation with high levels of mortgage stress. Thanks for Cookie Boy for doing the research.
We focused on more affordable houses, and spruikers note, prices are down.
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One characteristic of a Bear market are relief rallies, which start strong, but which also eventually run out of steam. We have seen this during the week, as a gauge of global stocks fell on Friday to end the trading week on a down note after five straight sessions of gains.
In addition, the dollar dipped against a basket of major currencies after soft data on U.S. business activity was released.
Friday was wobbly on Wall Street which posted modest losses in early trading but declines on the S&P 500 accelerated as Big Tech names such as Meta and Alphabet lost ground in the wake of earnings from Snap Inc which plunged 39.08%.
Defensive sectors such as utilities and consumer staples were among the few advancers
“Every rally we have had during this bear market, there have been a number of sharp rallies and then they fade and we set new lows and that has been a pretty consistent pattern here,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. “Everybody is looking for the turn, everybody is trying to guess at when we get a sustained rally, and everybody is hoping for one, but to me there is still a lot of unknown ahead of us.”
[CONTENTS]
0:00 Start
0:15 Introduction
0:12 Bear Market Bounces
3:30 Fed and Economic Data
5:40 US Markets 8:20 US Dollar
09:40 Oil
11:10 European Markets
14:00 Wheat Agreement
18:20 Gold
19:30 Asian Markets
20:20 Australian Markets
23:20 NAB Rate Outlook Up
24:30 Outlook
27:25 Crypto
28:00 Summary and Close
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We walk through some of the recent arrears data, and compare the worst post codes with our own stress modelling. The correlation may surprise you!. Go to the Walk The World Universe at https://walktheworld.com.au/
The ECB joins the rate rise club, with a 50 basis point hike – which was bigger than expected by the markets. They expect inflation to hang around, and they expect further normalization ahead.
So this marks the end of the negative interest rate experiment, other than in Japan, Denmark and Sweden. Banks will see profit uplifts as a result.
But the result will be higher rates around the world – until something breaks…
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My latest Friday afternoon chat with journalist Tarric Brooker, in which we explore home price dynamics, politics, and much more besides.
https://avidcom.substack.com/p/charts-that-matter-22nd-july-2022 for copies of the slides.
https://avidcom.substack.com/p/rising-rates-and-australias-over
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More examples of asking price falls across NSW, QLD and SA, courtesy of Cookie Boy. We focus in on the South Coast where price falls are accelerating.
Go to the Walk The World Universe at https://walktheworld.com.au/
Have you noticed how everyone is now trying to pass the buck for the failed monetary policy, the disastrous results of which were magnified by the COIVD response. Politicians are pointing to the Central Bank.
Central Bankers point to conflict between Ukraine and Russia, and then also point to the COVID caused supply chain disruption (which was largely created by households and businesses suddenly being given cash to buy stuff, creating high demand as the lockdowns took a toll.
In effect no-one in authority wants to accept they helped create the problems we are now facing. And because of that reflex, we may not get to first understand the root causes which created the issues, and so how to address them correctly, and avoid similar issues down the track.
On just this theme, Bernard Hickey wrote an interesting piece on the New Zealand Site interest.co.nz titled “Reserve Bank may have lots of good company in the money-printing dog box, but that doesn’t let it or the Government off the hook on inflation”
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Social unrest is on the rise in China, triggered by a range of financial services related issues, across deposits and mortgages, with ordinary Chinese people are publicly revolting, with rapidly escalating boycotts on mortgage payments spread across at least 301 projects in about 91 cities.
In addition there were large-scale protests in the Henan province by bank depositors over the release of their frozen funds over what may be the nation’s biggest-ever bank scam. The incident comes in the light of the Henan branch of the Bank of China declaring that people’s savings in their branch are ‘investment products’ and can’t be withdrawn.
Authorities say they started repaying some victims last week even as a police investigation is still ongoing. But Chinese state media has not posted anything about the repayments.
The Henan bank scandal, in which 40 billion yuan (US$6 billion) in deposits have disappeared, is more than a Chinese banking crisis – it is a political crisis that could undermine people’s confidence in local governance and also other local banks, according to analysts.
The blow to public confidence in financial stability and the government’s ability to protect their legitimate interests could be a long-term issue, unless the central government can find ways to promptly repay the depositors, they say.
Police in central China’s Henan province have arrested a number of suspects allegedly involved in a “complicated” cash crisis involving rural banks, while investigators continue to search for the whereabouts of customers’ missing deposits.
The arrests come after months of protests from anguished savers, who have been unable to withdraw cash from their accounts at small rural banks in Henan and Anhui provinces.
The case has highlighted the vulnerability of lenders in China’s less-developed regions as the risk of recession grows in the world’s second largest economy.
The Chinese Communist Party’s tanks on Wednesday rolled on the streets to scare Henan bank protestors amid large-scale protests in the province by bank depositors over the release of frozen funds.
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We know rates are going up, even the RBA confirms this, and now our new Prime Minister has stepped in saying the Central Bank needs to be careful. So what’s going on?
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I discuss the creation of Kiwi Bank, a National Bank In New Zealand with one of its architects Hon Matt Robson.
Matt Robson’s commercial experience began in the Netherlands thirty years ago, working in the oil industry. This introduced him to the rigours of international commerce, budgets, deadlines, understanding complex commercial operations and structures, it also gave him management experience and familiarity of working with a multicultural, multilingual workforce, where reading and writing in foreign languages was a necessity. As a result he is fluent in speaking reading and writing Dutch, speaking and writing French and German and competent in reading Spanish.
In the 1970’s Matt qualified with a Diploma in Teaching and taught through the 1980’s in a number of secondary schools in New Zealand the majority in the South Auckland area.
In the 1980’s-1990’s Matt became engaged in party politics. As deputy leader of both the Alliance and Progressive Parties he acted as spokesperson and policy developer across a wide spectrum of policy issues in areas as diverse as economic development, social matters and international affairs.
Matt was a Cabinet Minister in the Labour-Alliance Coalition Government (1999-2002) and was allocated the following portfolios: Minister of Corrections , Minister for Land Information, Associate-Minister of Foreign Affairs (responsible for official Overseas Development Aid [ODA]), Minister for Disarmament and Arms Control.
He was also a significant driver in achieving justice for Algerian asylum seeker Ahmed Zaoui, both while as a Member of Parliament and as an independent barrister/solicitor.
He continues to practice law in Auckland and specialises in immigration law and migrant advocacy. Matt remains active in advocating global peace and justice and is a regular speaker at disarmament and anti-nuclear conferences around the world.
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