Economics

No doubt you’re starting to thinking about puddings for Christmas Day, last minute gift buying, present wrapping and packing for the annual holiday.  But spare a thought for the plunging price of oil. There’s a couple of things you need to know, beyond giving the petrol station attendant a smile because fuel is only costing $1.20/litre.

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by Roger Montgomery Posted in Economics, Insightful Insights.

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In the past few months, we have noted that retailing – among other sectors that make up the Australian economy – slowed dramatically in the June quarter of 2014. The September quarter reports from many companies over AGM season saw a continuation of that trend.

Further to our recent observations, Australia GDP just printed at 0.3 per cent for the September quarter. By contrast, 0.5 per cent for the June quarter 2014, confirms that economic growth is waning in Australia and the RBA might be forced to cut rates further. continue…

by Russell Muldoon Posted in Economics, Energy / Resources, Insightful Insights, Investing Education.

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We have made much of the turnaround in markets that began with President of the European Central Bank, Mario Draghi’s ‘what ever it takes’ speech. Those famous words have been cited by many – including us – as marking the bottom for financial markets and the beginning of a recovery for Europe.

But former US Treasury Secretary Tim Geithner made some surprising revelations about Draghi, as well as the stupidity of Europe’s elected leaders as they faced their financial crisis, in his memoirs Stress Test: Reflections on Financial Crises. continue…

by Roger Montgomery Posted in Economics, Insightful Insights, Value.able.

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Is the chest beating and plumage preening about and over the Free Trade Agreement a bit of a joke?

Parliamentary Secretary to the Prime Minister, Josh Frydenberg, said the deal to be signed today with China could be worth (note the word ‘could’) up to $18 billion to the Australian economy over the next few years.  I think he actually said 10 years.  If that’s the case, it’s worth $1.8 billion per year.

Let’s put that into context.  Our total annual iron ore exports are 600 million tonnes.  At US$80/tonne, the total value is A$56 billion.  The total value of the FTA could be wiped out by a US$2.79/tonne move in the iron ore price.

The full terms of the deal are expected to be signed this afternoon and the details released then also. Stay tuned.

by Roger Montgomery Posted in Economics, Insightful Insights, Market commentary.

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It doesn’t seem that long ago, but the Global Financial Crisis-inspired rout in the stock market began in late 2007 and even though it bottomed in March of 2009, the symptoms that triggered the collapse, are even worse today.

But before you go jumping at shadows keep in mind that while interest rates remain low, the status quo is very likely to be maintained. Indeed low or lower rates could trigger an equity bubble before any correction is experienced. continue…

by Roger Montgomery Posted in Economics, Insightful Insights, Investing Education, Property, Value.able.

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It’s a bloody disgrace! It’s un-Australian and it’s nothing more than stealing from your own neighbour.

Finally, The Australian Financial Review, who received 28,000 pages of leaked tax information, forwarded it to ATO Commissioner Chris Jordan. The information reveals how 343 local and foreign companies used accounting firm PwC to slash their tax bills through total swap returns, royalty payments, hybrid debt structures and secret deals with tax havens like Luxembourg. continue…

by Roger Montgomery Posted in Economics, Insightful Insights.

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Businessweek reports: “Billionaire Stephen Schwarzman, who oversees the largest manager of alternative assets as Chief Executive Officer of Blackstone Group LP (NYSE: BX), said the recent declines in financial markets are an “overreaction.” continue…

by Roger Montgomery Posted in Economics, Market commentary.

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Guy Debelle, an Assistant Governor at the Reserve Bank of Australia, recently discussed the prospect of a violent sell-off in markets. His use of the word “violent” is bold, given the RBA is known for its nuanced language. It was his discussion regarding investor reactions which we found most interesting. continue…

by Ben MacNevin Posted in Economics, Insightful Insights.

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In my morning news trawl, I came across an interesting article on Bloomberg this morning. I have copied an excerpt below, and should you be so inclined, you can read the full article here. continue…

by Roger Montgomery Posted in Economics, Market commentary.

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So much of investing comes down to time and perspective.

In the short term, the market is awash with random noise – and one of the best things an investor can do is keep it away from their investment decision-making. continue…

by Tim Kelley Posted in Economics, Energy / Resources.

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