The Poolroom week ending 30th September 2011

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A wild fort­night of tur­bu­lence in the exot­ic world of finan­cial…

AUSTRLIAN/GLOBAL RELATED NEWS LINKS:

Sharp drop for econ­o­my, IMF warns (http://www.theage.com.au/business/sharp-drop-for-economy-imf-warns-20110920–1kjn6.html)

, The Age, 20 Sept

First and fore­most, the IMF has down­grad­ed GDP fore­casts, ‘warn­ing of a new glob­al reces­sion that would hit com­mod­i­ty prices and dri­ve mil­lions world­wide into unem­ploy­ment.’ Now sug­gest­ing growth to be “anaemic” in advance economies (1.6%). ‘How­ev­er, this assumes Euro­pean pol­i­cy­mak­ers con­tain the cri­sis in the euro area periph­ery, that US pol­i­cy­mak­ers strike a judi­cious bal­ance between sup­port for the econ­o­my and medi­um-term fis­cal con­sol­i­da­tion, and that volatil­i­ty in glob­al finan­cial mar­kets does not esca­late’ the fund said.

Aus­tralian fore­cast­ers out­do IMF for gloom (http://www.theage.com.au/business/australian-forecasters-outdo-imf-for-gloom-20110921–1kkbb.html), The Age, 21 Sep­tem­ber

Notably, ‘Aus­tralia will out­per­form its rich nations peers, but less so than the IMF fore­cast in June. Pen­cil in 1.8 per cent this year (down from 3 per cent) and growth of 3.3 per cent in 2012 (trimmed from 3.5 per cent.)’ Unfor­tu­nate­ly, ‘the IMF tends to be behind the curve when it comes to fore­casts.’ Our big banks now fore­cast­ing 2011 growth as the fol­low­ing:

WBC:   1.2%

ANZ:    1.3%

CBA:    2%

NAB:   1.9%

Gold­man Sachs rules the world: UK trad­er (http://www.theage.com.au/business/world-business/goldman-sachs-rules-the-world-uk-trader-20110928–1kvv4.html), The Age, 28 Sept

And, of course as every­one is aware now UK trad­er Alessio Rastani’s state­ment regard­ing the future of the world econ­o­my; ‘Per­son­al­ly I’ve been dream­ing of this moment for three years. I have a con­fes­sion, which is I go to bed every night, I dream of anoth­er reces­sion.’ I’m sure it would have been very sat­is­fy­ing for the neo­clas­si­cal eco­nom­ic com­mu­ni­ty had he have sim­ply been one ‘satir­i­cal’ Yes Men. (See also: http://www.theage.com.au/business/who-is-alessio-rastani-20110928–1kw8a.html)

AUSTRALIAN RELATED NEWS LINKS:

House prices extend slide: NAB (http://www.theage.com.au/business/house-prices-extend-slide-nab-20110928–1kwck.html), The Age, 28 Sept

Back home on the hous­ing front the NAB Res­i­den­tial Prop­er­ty Index fell 14 points for the Sep­tem­ber quar­ter. A decline from a 5‑point drops in the June quar­ter ear­li­er this year.

Mort­gage stress hits roof (http://www.theage.com.au/business/who-is-alessio-rastani-20110928–1kw8a.html), The Age, 28 Sept

Mean­while, Moody’s rat­ing agency recent­ly account­ed, ‘MORE Aus­tralians are falling behind on their home loans despite the min­ing boom, accord­ing to a report released yes­ter­day by rat­ings agency Moody’s.’ A prime exam­ple of this was, ‘the 6182 post­code, tak­ing in Rock­ing­ham, 30 kilo­me­tres south of Perth, has the high­est delin­quen­cy rate, with 5.31 per cent of mort­gages more than 30 days over­due — more than three times the nation­al aver­age of 1.67 per cent…

Moody’s senior ana­lyst Arthur Kara­bat­sos said the two biggest declines in mort­gage per­for­mance were in min­ing boom states West­ern Aus­tralia and Queens­land. ”What I’m say­ing is: if you’re in min­ing, you’re sweet. If you’re not, you’re screwed.”’

Homes in five WA regions among nation’s worst rate of neg­a­tive equi­ty (http://www.watoday.com.au/business/property/homes-in-five-wa-regions-among-nations-worst-rate-of-negative-equity-20110928–1kxa3.html#ixzz1ZIhda6G4)

The Age, 28 Sept

Not sur­pris­ing­ly, WA ‘has the sec­ond high­est num­ber of homes with neg­a­tive equi­ty (4.9 per cent) in Aus­tralia, and is home to five of the 10 regions with the high­est rates in the coun­try, the RP Data annu­al Equi­ty Report shows. The nation­al aver­age is 3.7 per cent.’