The Australian Bureau of Statistics (ABS) in November published both its House Price Index and its Average Weekly Earnings Index. Let’s therefore have a look if the country which both avoided recession and seems to have a Central Bank that is interested in controlling inflation but which to me looks like it has a bubble of a property market is still as bullish. I say has an interest in controlling inflation. The RBA has been steadily raising its cash target rate over the last year and a half to 4.75%. This is in stark contrast to the Bank of England’s 0.5% who as I’ve described before has no interest in sticking to their inflation remit with inflation now above target for about 40 of the last 50 months. Regular readers of course know that I keep a close eye on Australia as it is still a potential “retirement” location for me even if £1 today only buys a poorly $1.6199.
Tuesday, 30 November 2010
Sunday, 28 November 2010
There’s still plenty of time for -60% – History of Severe Real S&P 500 Stock Bear Markets – November 2010 Update
I haven’t updated my History of Severe Real S&P500 Stock Bear Markets since August 2010. At that time QE Lite had only recently been announced. That strategy kept the dead US patient alive for 3 short months before the next load of stimulus, Money Printing 2 (sorry Quantitative Easing 2). Let’s put the $600 billion involved in QE2 into perspective. It’s the equivalent of $1,950 for every US man, woman and child. I was always taught “that nothing comes for free”. In parallel to this I also can’t help but think about Newton’s first law, “every action has an equal and opposite reaction”. As an Average Joe I’m just wondering what the penalty and opposite reaction will be. I guess time will tell but I still can’t help thinking it’s not going to be good.
Thursday, 25 November 2010
It must be nearly bonus time and the S&P 500 cyclically adjusted PE (PE10 or CAPE) – November 2010 Update
If you’re a bank, particularly a bailed out tax payer owned bank, who’s about to pay out £7 billion or so in bonuses (which is the equivalent of £113 for every man, woman and child in the UK), while everyone else in the country is going through austerity and slowly being made redundant, then you have a seriously hard sell on your hands if you don’t want to be lynched. Before announcing the bonuses you need to get your PR machine into gear and show the general public that you’re not immoral or greedy but instead a warm and loveable organisation who cares about the general public and wants to help society as a whole.