Friday, December 17, 2010

Links December 17: US recovery

Buiter of Europe. Alphaville
US bad news. Good news.
Growl of a bear. Zero Hedge
Is America sick? Reuters
Commodity speculation. PragCap
Farm bubble. BPA
Commodities for pros only. Gavyn Davies
Lapping up IMF drivel. SMH
Chaney defends sovereign rating. Of course. NAB's sunk without it. The Oz
Today's contagion worst in: Spain, Italy

4 comments:

homes4aussies said...

H&H, just reading the joint RBA-APRA announcement about how they intend to deal with Basel III. They detail arrangements to get around the limited size of the Australian Government debt market, and detail another facility whereby "an authorised deposit-taking institution (ADI) will be able to establish a committed secured liquidity facility with the RBA, sufficient in size to cover any shortfall between the ADI's holdings of high-quality liquid assets and the LCR requirement"

The next part is what particularly interested me.... "Qualifying collateral for the facility will comprise all assets eligible for repurchase transactions with the RBA under normal market operations"

My understanding is that at the height of the GFC the RBA massively expanded assets eligible for repurchase transactions, and critically included self securitised RMBS.

So I guess the question is what do they mean by "normal market operations".... does it consider that expansion to be temporary, and not part of normal market operations... but my understanding was that they had essentially become permanent....

And if that is the case, then the Australian adaptation of Basel III is a complete joke...

Would like to hear your much more informed view on this

Anonymous said...

phyteWe are all hostages to the Masters of the Universe, even Obama:

http://www.marketwatch.com/story/obama-is-a-hostage-but-not-to-the-gop-2010-12-14

Anonymous said...

Really?

http://www.theaustralian.com.au/business/news/property-prices-to-pick-up-in-late-2011/story-e6frg90f-1225972643881

The Lorax said...

Peter Martin says: "One state, one city gets housing right"

http://www.petermartin.com.au/2010/12/one-state-one-city-gets-housing-right.html

FWIW, I think the Melbourne property market is a catastrophe waiting to happen.

Reasons:
- Huge run up in prices from mid-2009 through mid-2010 (>20%?)
- RBA has hiked 175bps over 18 months
- Strong dollar hurts Victorian industries such as manufacturing and education
- Victoria doesn't benefit much from mining income or investment
- Overseas student numbers will plunge in 2011, freeing up a lot of housing

All of this is colliding with tsunami of new supply!