ASX 200 retreats

Australia’s ASX 200 retreated below the band of resistance at 4350/4400. Recovery above 4400 would confirm the primary up-trend signaled by the 63-day Twiggs Momentum cross to above zero. Target for an advance would be the 2011 high at 4900*.

ASX 200 Index Weekly Chart

* Target calculation: 4400 + (4400 – 3900) = 4900

On the daily chart, however, bearish divergence on 21-day Twiggs Money Flow highlights medium-term selling pressure, warning of a correction. Breach of the rising trendline and support at 4250 would confirm, signaling another test of primary support at 4000.

ASX 200 Index Daily Chart

Forex: Australia, Canada and South Africa

The Australian dollar has tracked the CRB Commodities Index fairly closely since 2009. Weakening commodity prices warn that the Aussie is likely to follow.

CRB Commodities Index and Australian Dollar

Against the US dollar, the Aussie is headed  for another test of support at $1.02. Reversal of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of support at $1.02 would confirm this, offering an initial target of $0.99.

Australian Dollar

* Target calculation: 1.02 – ( 1.05 – 1.02 ) = 0.99

Canada’s Loonie is in a primary up-trend against the Aussie dollar — as signaled by the 63-day Twiggs Momentum cross to above zero. Breakout above $0.982 completes a bullish ascending triangle formation with a target of parity.

Canadian Dollar

* Target calculation: 0.98 + ( 0.98 – 0.96 ) = 1.00

The Aussie is also weakening against the South African Rand. Cross of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of support at R7.90 would confirm, offering an initial target of R7.50*.

South African Rand

* Target calculation: 8.00 – ( 8.50 – 8.00 ) = 7.50

ASX 200 tests 4400

Australia’s ASX 200 index is testing the band of resistance between 4350 and 4400. Breakout would confirm the primary up-trend signaled by a 63-day Twiggs Momentum cross to above zero. Target for the long-term ascending triangle would be the 2011 high at 4900*.

ASX 200 Index

* Target calculation: 4400 + (4400 – 3900) = 4900

Abundance of land, shortage of housing | Institute of Economic Affairs

Kristian Niemietz looks at how housing costs in the UK have exploded in recent decades. Real-terms house prices in 2011 were more than two-and-a-half-times higher than in 1975, with rent levels following suit. In the USA, Germany and Switzerland, real-terms house prices are still close to their 1975 levels.

· Housing affordability measures show housing to be unaffordable in every single one of the 33 regions in the UK.

· The main difference between the UK and its north-western European neighbours is not in demographics, but in completion rates of new dwellings.

· Empirical evidence from around the world shows that planning restrictions are the key determinant of housing costs.

via Abundance of land, shortage of housing | Institute of Economic Affairs.

Forex: Aussie Dollar and South African Rand

The Aussie Dollar encountered support at $1.03, evidenced by several long tails on the daily chart. Recovery above $1.045 would confirm that the correction has ended and would signal another advance to $1.08. Respect of zero by 63-day Twiggs Momentum would confirm the advance.

Aussie Dollar/USD

The Aussie is declining against the South African Rand. Failure of support at R7.90/R8.00 would test the rising trendline around the R7.50 mark. Breach of the trendline and/or follow-through of 63-day Twiggs Momentum below zero would warn of a primary down-trend.

Aussie Dollar/South African Rand

* Target calculation: 8.00 – ( 8.50 – 8.00 ) = 7.50

Basel takes aim at Mega Bank – MacroBusiness

Deep T: On the one side we have an Australian housing market which is close to the most unaffordable in the world with mortgage debt at 100% of GDP also close to the highest of any country, yet Mega Bank [the Big Four banks] calculates its minimum capital requirements at 1.6% on residential mortgages which undoubtedly would be close to the lowest of any bank in the world….. Surely, the result the Basel Committee assessment is a foregone conclusion?

Sadly, no. On the other side, however, we have an equally formidable opponent. Do not underestimate the politico-housing complex. The smoke screens will be built and a whitewash is on the cards. Australia has a history of painting a very rosy picture of our financial system and housing market in the face of significant known risk factors.

via Basel takes aim at Mega Bank – MacroBusiness.

Multiculturalism, segregation and the road to ruin

I just read an article about the joys of multiculturalism and how all Australians should strive to “show the world what a truly multicultural society could be.”

“Multiculturalism” is such a nice-sounding, inoffensive word that we may be forgiven for picking it up without really examining its implications. A multicultural society is also a fragmented society, divided along ethnic, religious, language or cultural lines and represents a breakdown in cohesion. Taken to its extreme, individual groups will claim the right to self-determination — another nice-sounding word, this time conjured up by spin doctors of South Africa’s apartheid era — a euphemism for promoting the interests of one group without consideration for the impact on others.

I find it ironic that Simon van der Stel, a Dutch governor of the Cape colony had in the early 18th century created a blueprint for a cohesive society. When Dutch settlers were swamped by French Protestants fleeing from persecution in Catholic France, he recognized the dangers of creating a fragmented society. His solution was to allocate farms in a checkerboard fashion, interspersing Huguenots among existing settlers, with the provision that all school lessons and official business be conducted in Dutch. Within a generation the two cultures had successfully integrated. Dutch remained the official language while the culture was enriched by a strong French influence still prevalent today, especially in the wine industry.

We need to similarly recognize the dangers of multiculturalism and strive for a truly integrated society with a unique Australian culture, tolerant of all religions and enriched by the infusion of many different cultures.

Segregation of schools on religious, ethnic or language lines encourages fragmentation of our society. The present state school system in Australia needs to be reformed after a healthy, open debate — in order to discourage segregation.

Australia’s strength in times of adversity has come from its unique culture. While that culture is evolving, and will continue to do so, we should ensure that it remains unified. Unity and openness are our strength.

En Passant » Slip sliding away: a eulogy for Gillard Labor?

John Passant: There is the rotten stench wafting from the crypt of Parliament of a dying party bereft of principle whose raison d’etre is power for powers’ sake, not the betterment of the working class and the poor.

….The Slipper syndrome – power before principle, rule for the rich – highlights once again the bankruptcy of Labor and may be another heaving gasp on the way to the final death rattle of the ALP’s version of social democracy in Australia.

via En Passant » Slip sliding away: a eulogy for Gillard Labor?.