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 finest 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.

Saturday, 26 November 2016

Any old iron?

Shock and...

Australia's key export commodity iron ore had already experienced a studious rebound, up from below US$40/t at the beginning of the year to an average price of US$58/t in October (or about $A76/t in Aussie dollar terms). 


Well, stop press, because the spot price and commodity futures action through the month of November has been nothing short of bananas. 

The spot price closed on Friday at US$79.61/t for a colossal year-to-date gain of 82.7 per cent.

In Aussie dollar terms the spot price sits above A$107/t, which is actually higher than the monthly average price through the bubblicious past decade. 

And futures are pointing to yet further gains on Monday.

I don't know anyone who believes that such prices can last, but on top of a coking coal price which all but quadrupled to blaze through $300 per metric ton on Chinese demand an supply restrictions, this will deliver billions to the budget for as long as it's sustained.

And with wages growth remaining weak, the budget needs all the help it can get if Australia's AAA rating is to be maintained as it has been since 2003.

The budget has an in-built or automatic repair mechanism over time - bracket creep - which happens as wages rise and more income earners are pushed into higher tax brackets.

This is still happening, of course, but more slowly than forecast. 

Details as always from Scutty here over at Business Insider.