Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

Wednesday, 31 December 2014

Iron Ore Surges +5 Percent

Stimulus Measures

A sizeable rebound was reported by Commsec overnight for iron ore of 4.9 percent or $3.30 to US$71.20/tonne (62% Fe).

Not that much in the grand scheme of the past three years, of course, but hey, at least it's the highest spot price seen since the third week of November (!).

The assumed cause was a stimulus announced by China's central bank designed to free up $800 billion of loans for commercial banks.

Chinese demand is ultimately one half of the key to the iron price since it imports two-thirds of the world's seaborne ore as material for its monstrous construction boom, with 1.4 billion tonnes of imports expected in 2015.

However, an unprecedented flood of supply this year has seen prices nosedive by the best part of 50 percent since January 1.

With China's property market slowing, further interest rate cuts could be seen in that country next year.

The iron ore price has now rebounded by 8.5 percent after hitting its lowest price since mid-2009 last week.

But to put that in some context...


Tread with Care!

No doubt there will be a boost to iron ore producer valuations during the next trade and a spate of articles suggesting "investing" in them in 2015.

Each to their own, of course, but...well, as the chart shows there have been some truly epic "bull traps" in the not too distant past, so I'd probably be skipping the junior/highly leveraged/marginal producers meself (same applies for coal)!