Each week, I jot down interesting bits and pieces as I come across them, like a scrapbook I guess, and I use it to build a picture of what I think is going on.
In recent months I’ve started forwarding it around to friends and mentoring students. Friends started forwarding it to friends, and I’m getting more requests to join the distribution list, even though I haven’t officially set one up.
So anyway, I thought, why not just share it with everyone. It doesn’t cost me anything since I’m doing it anyway. And the more knowledge we have, the better off we all are, right?
So welcome to The Giaan Investor Review Report. This is just a hodge-podge of whatever data and news I find interesting. Sometimes I’ll give a little commentary on what I think it means. Sometimes I won’t.
Give it three mins. Read the stuff that interests you, and you’ll be as well-informed as any analyst out there.
Enjoy
JG
Auction Clearances still pumping
Holding around record levels. 87% in Sydney. 83% in Melbourne. Tubthumping. The market has never seen anything like it.
(I’m starting to wonder if there’s been a cultural shift towards auctions… Is the market really this strong?)
House prices strong, but increasingly Sydney-centric
Latest RP Data shows Ozzie houses growing at 8.1% y/y. But Sydney is the main story, growing at 14.4%. Melbourne gets silver at 7%. Bris gets bronze on a barely also-ran 2.5%. Perth was flat. Darwin fell.
City narratives are dominating national stories.
May rate-cut is on
The odds are shortening for a rate-cut in May, with renowned bank-watcher (and some say the RBA’s leak distribution channel of choice) Peter Martin writing in the SMH:
Concern about a deteriorating economic outlook and a resurgent Australian dollar will force the Reserve Bank to cut interest rates on Tuesday…
Among the concerns driving the bank is a realisation that unless it cuts its cash rate on Tuesday, financial markets will stop believing that it is prepared to cut and push the dollar even higher.
Of most concern to the bank is new data on business investment plans, which shows that not only is mining investment set to fall sharply in 2015-16 but that non-mining investment is expected to fall as well, despite the talk about new economic drivers emerging to take the place of mining.
Although the Bank is concerned about the effect of another cut on Sydney house prices, it is prepared to rely on its sister regulator, the Australian Prudential Regulation Authority to ensure banks do not cut their lending standards…
The RBA is acutely aware that the upcoming federal budget will do little to boost the economy…
The RBA is playing chicken with the markets. If they don’t move, the dollar pumps higher, and no one believes anything they say. At the same time, Canberra is in Austerity mode, so no help there.
(Martin has picked the last two cuts.)
Prices give them lots of room to cut if they want to:
The ABS says the cost of living is up a piffling 0.9%. Inflation and rumours of inflation seem banished from the earth. At the same time, wages are up 1.3%, so Aussies are (technically at least) better off.
Iron Ore Prices Jump… a little.
Iron ore prices ended the week up 20% on their recent trough. It’s enough to put some high-cost miners (like Atlas and FMG) back in the black, but in the scheme of things isn’t much to write home about.
Here’s a sobering thought: Deloitte Access Economics reckon that falls in the iron ore price in the past 6 months (which feeds into profits and therefore taxation revenue) have left such a gaping hole in the budget, that even if you extended the GST to all fresh food, it wouldn’t cover the shortfall. Ouch.
Negative Gearing Aussies approach critical mass
According to the ATO, there are now 1,967,260 negative gearing property investors across Australia.
Whatever you think about neg gearing, 2 million voters is a political force to be reckoned with.
Govt get serious about foreign purchases
Abbott has announced plans for legislation to crack down on illegal foreign buying, including the potential of jail time. Not a moment too soon. Should be before parliament by June, and taking effect from December. I’ll cover the details later this week.
White-sex sells property
Here’s something cute. What do you do when you’re having trouble moving apartments in China? Get foreigners to stand around in their underpants for no good reason. Looks like it works.
There you go. What do you think? Is that useful to you?
Have a great week
JG
Drew says
brilliant. Love it. I really like your ‘cut out the bullshit and write the gist of it’ writing technique
Jennifer says
Thank you so much for sharing. Love it.
bazza says
So much doom and gloom out there….that is if you read the newspapers or watch the news. However when presented with the facts things are in fact a lot better that what they seem. Now all we need is for the government to get its act together and we could be on the cusp of another long and sustained period of growth. Great article John.
Michael Fordyce says
A nice short review of a few key factors! Awesome…
Henry Jennings says
for no non sense daily roundup of financial marlets I use this http://www.beeksdownunder.com…actually I write it and think its rather good…love your blog though…good roundup and like a no nonsense no bs approach.
Mustaev says
Very useful. Thanks for sharing your report with us Jon.
Jason says
Cheers mate, you save me hours of trying to figure out what is behind all crap that is fed to us.
Gotta say I miss the wit Though.
Love your writing style, always amuses me, its like being mentored by an informed stand -up.
Jon Giaan says
ha! thanks mate. good to know someone’s getting the gags. i often wonder if i’m just giving myself a tickle.
Jason says
Mate I love a good laugh mixed with priceless info,as well as a solid rant and you always back up what you think with hard facts.
I’m just starting out as an investor and looking for the right steps. You make the info interesting and relevant.
I’m studying under Massland.
Soo do you need an apprentice?
Wil says
Keep up the great info, love it!
Owen says
Nice work mate, quick read, good info to get the mind ticking. Really enjoy reading your blog/rant/reports
David Hall says
Hi Jon,
Love your work, much more reliable than the press.
My question is can the reserve bank drop rates any further? Given the way the banks source funds, I cannot see them being able to lower rate much further.
If they cannot how are we (ok Glenn S) going to stimulate the economy?
Idd love to know your thoughts, backed up by your humours yet informative writing style. Also what is going to get Australian over this malaise that we have been in for the last five
years. Why are we so bloody pessimistic with all we have?
Thanks
David.
Ben Hurn says
Great idea Jon! I will be reading every time, and perhaps ditch a few other newsletters if it works out. *thumbs up emoji*
Andrew says
Very Good John, appreciate you sharing information without bias, cutting through all the bs out there. Your knack of presenting it is always interesting aswell. Thank Andrew