Today’s Australian Newspaper Full of Bad News

I guess with the Australian share market having plummeted by a sliver under 10 percent in the last two weeks, wiping $30bn off the market value, I guess one should not really expect that a ‘tell it like it is’ paper such The Australian was likely to contain very many good-news articles. Even so the volume of bad news in today’s Australian did not make very good reading tonight as I ate my MacDonalds ‘Sydney Stacker’ burger.

On the upside the Sydney Stacker was tastier than I remember most MacDonald’s burgers being. It contains a beef burger, a ring of pineapple, bacon, lettuce, beetroot, onion, and some BBQ flavoured sauce. Normally it contains cheese but I delete cheese from all burgers—I just plain don’t like cheese in my burgers.

So firstly The Australian reports that the average property price across Australia fell by 1.7 percent in the first quarter of 2012. On a slightly upbeat note the housing market in Perth only fell by 1.1 percent; which is a little better but still going down.

The main article has the heading “Housing market ‘getting worse’”, and in case that does not make the point the sub-heading is “Lend Lease Warns Conditions Will Continue to Deteriorate”.

So, based on that, probably not yet the right time to buy into the property market for investors. But, as the average weekly rent is currently higher than the average weekly mortgage repayment—something that nobody can recall every happening in Australia before—if you are planning to buy a house to live in (rather than pay rent) then it is probably a good time to do that. Better to buy a house and pay less per week than rent paying it off; even if the property does go down a bit more yet before property hits its bottom.

Then in the Business section we find out BHPB’s share price has fallen 15 percent from its 2012 peak and Rio Tinto has lost 20 percent from its 2012 peak. BHP Billiton’s chairman adds more dampness to the news by indicating that one, and possibly two, of BHPB’s planned multi-billion expansion projects announced in the last 12 months are now likely to be shelved.

Then on page 2 of the Business section the CEO of BHPB “warns [that the] iron ore export window is closing”. Basically he is saying that the good times of high prices for iron ore, and as much as we can provide, are coming to a close.

To underline the above there is an article on the third last page of the Business section where it is said “It is estimated that up to half of China’s 1,600 shipyards could go under [i.e., shut down] in the next few years”. On the same page there are graphs showing the prices for copper, tin, and nickel heading south (going down) since the start of 2012.

Finally, in Market Watch, in an article headed “Battered mining stocks fall in a hole” there is a graph showing the hit some of the miners have taken over the last five days with Fortescue Metals down 9.2 percent, Gindalbie Metals down 11.8 percent, and Discovery Metals down 14 percent—just to pick a few.

And I haven’t even mentioned any of the 20 or so very gloomy articles about Europe, Greece, and Spain.

BarryMark