Australia & NZ Archives - Page 70 of 96

December 10, 2012

Pettis: Australia should be pessimistic | MacroBusiness

Michael Pettis writes about the latest Australian government White Paper Australia in the Asian Century that projects an average 7% GDP growth rate for China between 2012 and 2025:

This seems to put the Australian government among the most optimistic in the market when it comes to long-term growth expectations for China. I have always assumed that government projections should generally be on the pessimistic side to prepare for unexpected negative shocks (positive shocks can take care of themselves), but apparently not. I am glad to say that my own conversations with Australian government officials lead me to believe that this White Paper may represent the official view of the government, but it does not represent the private views of all Australian government officials…….

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

December 9, 2012

We warmed to Gough, even as his grand design crumbled

Amanda Vanstone, former Howard government minister, writes on the 40th anniversary of Gough Whitlam’s government.

For a surprisingly long period there was no effective cabinet, then unsatisfactory cabinet process. It was nothing short of economic chaos, a disaster. It was a reminder to everyone that you can have all the great ideas you want about a better world, but if you do not keep the economy on track your government will fall apart.

via We warmed to Gough, even as his grand design crumbled.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

December 6, 2012

Aussie Dollar bullish consolidation

The Aussie Dollar is consolidating in a narrow range below resistance at $1.05 — a bullish sign. Breakout would indicate a test of long-term resistance at $1.06. Rising 63-day Twiggs Momentum, above zero, indicates a primary up-trend. In the long-term, breakout above $1.06 would offer a target of $1.10* but the RBA may take measures to prevent further appreciation. Reversal below $1.04 and the rising trendline is unlikely, but would warn of a correction to test primary support at $1.015.

Aussie Dollar/USD

* Target calculation: 1.06 + ( 1.06 – 1.02 ) = 1.10

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

December 4, 2012

Australia: ASX 200 retreats

The ASX 200 found resistance at 4540 after a strong rally. Reversal below 4500 would indicate retracement to test support at 4450. Breach of the falling trendline indicates the correction is over. Respect of 4450 would confirm. A 21-day Twiggs Money Flow trough above zero would signal medium-term buying pressure. Breakout above 4580 would indicate a primary advance to 4800*.

ASX 200 Index

* Target calculation: 4580 + ( 4580 – 4350 ) = 4810

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

December 2, 2012

IMF: Australia's banks need more capital

The IMF identifies risks to Australia’s banking system:

Residential mortgages are banks’ single largest asset, and a combination of high household debt and elevated house prices increases the risk in this portfolio.

Banks rely on funding from outside the country, and with the crisis in Europe and the global economy suffering, these funding sources are volatile.

Four major banks dominate the banking system, and they share many similarities that can be a cause of risk spreading from one to another in the event of a crisis.

……The four major banks are systemically important which means difficulties in any one of them would have severe repercussions for the financial system and the economy. A higher minimum capital requirement would provide a bigger cushion against potential losses.

Capital ratios may under-state capital requirements through risk-weighting assets. Past performance is not always a good predictor of the future. I prefer FDIC director Thomas Hoenig’s unweighted comparison of tangible assets to tangible equity.

via IMF Survey: Australia’s Banks Sturdy, Closely Connected.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

December 2, 2012

Why is Australia paying Japanese prices for natural gas?

Australian-born chairman and CEO of the Dow Chemical Company, Andrew Liveris, talks with Alan Kohler on ABC Inside Business about the US fiscal cliff and why Australia needs a cohesive energy policy.

“We have to create an infrastructure such that we can have gas-on-gas on competition domestically. If you build the infrastructure, and private sector can do it, and allow shared pipelines, if you build it you will get a domestic gas system and a pricing system that defies the oil gas parity pricing that countries like Australia should never have. If you have the resource in your country, you shouldn’t be paying the highest alternative price of the country that doesn’t have the resource. Why are we paying Japan energy prices when we have domestic gases?”

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 28, 2012

Euro recovers

The Euro is testing its long-term descending trendline in response to the weakening dollar. Breakout above $1.315/$1.32 would confirm the primary up-trend signaled earlier by 63-day Twiggs Momentum recovery above zero.

Euro/USD

* Target calculation: 1.315 + ( 1.315 – 1.265 ) = 1.365

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 28, 2012

Aussie Dollar tests $1.05

The Aussie Dollar found short-term support at $1.04 and is testing medium-term resistance at $1.05. Breakout would indicate a test of long-term resistance at $1.06. Oscillation of 63-day Twiggs Momentum above zero suggests a primary up-trend. In the long-term, breakout above $1.06 would offer a target of $1.10* but the RBA is likely to take measures to counter further appreciation.

Aussie Dollar/USD

* Target calculation: 1.06 + ( 1.06 – 1.02 ) = 1.10

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 28, 2012

Australia: ASX 200 resistance

The ASX 200 encountered resistance at the descending trendline — around 4450. A sharp rise in 21-day Twiggs Money Flow indicates short-term buying pressure. Breakout would indicate a primary advance to 4750*. Retreat below 4400 is less likely but would suggest a decline to 4250.

ASX 200 Index

* Target calculation: 4550 + ( 4550 – 4350 ) = 4750

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 24, 2012

The “Export Price Norm” saved Australia from the Great Recession « The Market Monetarist

The Market Monetarist writes how a combination of luck and good policy saved Australia from recession.

Milton Friedman once said never to underestimate the importance of luck of nations. I believe that is very true and I think the same goes for central banks. Some nations came through the shock in 2008-9 much better than other nations and obviously better policy and particularly better monetary policy played a key role. However, luck certainly also played a role…..

via The “Export Price Norm” saved Australia from the Great Recession « The Market Monetarist.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.