Tuesday, 13 April 2010

Australian Property Market (Alternate Data) – February 2010 House Price Update

The Brisbane and Australian Eight Cities (Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart, Darwin & Canberra) House Price Index published by the Australian Bureau of Statistics (ABS) catalogue 6416.0 suits my requirement to track Australian house prices as part of my retirement investing strategy.  It however seems to have two flaws. Firstly the housing data is only published quarterly and secondly this housing data is then published over a month after the quarter ends.

Monday, 12 April 2010

Are we back to blowing asset bubbles already?

Last week saw Alan Greenspan interviewed as part of the Financial Crisis Inquiry Commission. The Times reported that during this interview “Mr Greenspan denied his policies encouraged the type of risky lending that spurred the financial crisis. The long-time Fed Chairman - whose reputation has been deeply undermined by the crisis - denied low interest rates and loose regulation had encouraged lenders and borrowers to take ever greater risks."

Sunday, 11 April 2010

Where is the economic recovery?

I keep hearing in the news about how fragile the economic recovery is that we are currently seeing. I don’t know about you but I don’t see any economic recovery. What I am currently seeing is nothing more than a mirage that has been caused by massive fiscal stimulus by governments borrowing money (or as I like to think of it, stealing money from the future generations) that they didn’t have or worse by printing money (quantitative easing etc). I am yet to see any evidence that would make me think we are seeing a genuine recovery.

Saturday, 10 April 2010

An appropriate quote for how the economy should be managed

MoneyWeek every week publishes a series of quotes. In this week’s issue one of these particularly leapt out at me. In my opinion it really sums up how the UK government (or for that manner any government) should manage the economy and highlights how far away from this philosophy we are today.

The Bank of England shows their hand – UK Bank Rate held at 0.5%

The Bank of England this week held interest rates at 0.5% for the fourteenth month in a row. I’ve been speculating over the past few months at what the Bank of England are up to but I’m now convinced I know the strategy of the Bank of England and unfortunately it’s not their officially published Monetary Policy Framework of keeping to the Government’s inflation target of 2%. It’s clear that’s not the strategy when the Retail Prices Index (RPI) is running at 3.7% (annualised 3 month RPI is 4.8%) and the government set Consumer Price Index (CPI) is running at 3.0%.