Exciting new episode of Coolabah’s Complexity Premia Podcast out now!
In predictably cutting its cash rate to a new record low of 0.75 per cent in October, the RBA moved itself one meeting away from initiating quantitative easing (QE), or outright purchases of bonds—as we controversially forecast in early May—to satisfy its full-employment target. Click here to read the full column or AFR subs can click here. Excerpt …
While studying at Cambridge University in 2003 I got a letter from former US secretary of state Henry Kissinger, inviting me to meet him in New York. I naturally embraced the opportunity. I recall walking into his stuffy office overlooking Park Avenue, adorned with literally hundreds of photos of Kissinger standing alongside heads of state and …
Kissinger: Why Traders Are Smarter Than Investors Read More »
Today I argue that in response to the 2008 crisis central banks and treasuries have thrown the baby out with the bathwater. Unable to tolerate the pain associated with capitalism’s most important attribute, “creative destruction” – or the cathartic process by which markets punish bad businesses and reward good ones – government agencies decided that …
This weekend I write that the ECB’s decision to start buying bonds again to reduce the long-term cost of capital (aka QE)—coupled with the Fed cutting in a few days—will only amplify pressure on the RBA to follow-suit (click on that link or AFR subs can click here). I also argue that it is high time APRA …
Today I explain why this housing boom is very different to its predecessors, and should not constrain the RBA from cutting rates further to hit its inflation and employment objectives (click on that link to read or AFR subs can click here). Excerpt enclosed: House prices are already higher than they have ever been in outright terms – and …
Today I explain why this housing boom is very different to its predecessors, and should not constrain the RBA from cutting rates further to hit its inflation and employment objectives (click on that link to read or AFR subs can click here). Excerpt enclosed: House prices are already higher than they have ever been in outright terms – and …
I’ve written a lot about the coming of Aussie QE since we first forecast it in May this year (the notion was dismissed by many at the time), and there is mounting evidence that the RBA is slowly starting to burnish its narrative on this front, as we have suggested they should do. The RBA’s August board …
Today I argue that since we blindsided participants by first putting the likelihood of the Reserve Bank of Australia launching quantitative easing (QE) back in May, there has been no end of gas-bagging initially dismissing the possibility, then reluctantly acknowledging it and now thinking about how to trade it. In its August board minutes, the RBA …
Coolabah developed the world’s first compositionally-adjusted, or hedonic, regression-based index of RMBS default rates, covering all prime deals that Bloomberg reports on (you can download the paper here). We update this index monthly, and the results are enclosed below. Contrary to S&P’s SPIN Index, we find that Aussie RMBS arrears (nb: legally there is no difference …
RMBS default rates trending higher as house prices plunge Read More »
Notwithstanding the franking debate last year, ASX hybrids were the second-best performing asset-class behind long-dated government bonds in 2018 with an attractive 4.9% gross return, smashing the AusBond Floating-Rate Note Index (2.3%) and the Aussie equities market including dividends (down -3.5%). Major bank hybrids are rated by S&P at BB+, which is technically in the …
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