“Extreme volatility … seems to have eased.” Those who
the gods wish to chastise they first play with. Wall Street stumbles. Metal
prices fall. Oil falls. Gold takes a bath. BHP down 4%, Japan
down 2%. The rest of Asia
panicking.

Fortunately, Henry’s soothing presence seems to be
having a calming influence in New York today
and Asia should claw back some of the losses. Difficult business, investing in stocks and bonds. Why not borrow to the hilt
and buy property? See Ray Block on the first cracks appearing in the US
property markets.

The Australian housing industry seems to be recovering
according to news earlier this week of sales increases in Sydney and prices rises in Melbourne. Then there was (and is) the
ridiculous call to boost the first home-buyers grant to $30,000. When does it
stop? $50,000? $100,000? Why are we encouraging this already-inflated sector to
inflate more? It’s OK if you already own a house but will somebody please think
of the children? And could our gummint do something about negative
gearing? I’d like to see that!

STOP
PRESS:
The ABS says the
unemployment rate rose to 5.3% in January. So is this the start of recession?
Hardly. Full-time employment rose by 30,000 and it was only a fall in part-time
jobs that held the total increase in employment to 2,000. All in all, hardly
weak enough to sway the RBA from its monetary policy bias. Henry follows the
Aust economy here.

Peter Fray

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