Fixed Income
Christopher Joye

Today I write that if the RBA cuts the cash rate by 50bps or more, the housing bust will be over very quickly. We were by far the most accurate house price forecasters between 2012 and 2017 and the first mainstream analysts to call the end of the boom and... Show More

Fixed Income
Christopher Joye

Today I argue that while Labor have given ScoMo a shot of winning the election with its shocking recent mis-steps and its bizarre tax-everything-that-moves-platform, the media coverage and political analysis has never been more biased in all likelihood because those inside the beltway fervently believe that ScoMo does not have... Show More

Fixed Income
Christopher Joye

A few quick thoughts on recent credit spread movements in the Tier 2 subordinated bond and the Additional Tier 1 capital hybrid markets. First, the screenshot below shows the clean price of the most recently issued, 5 year major bank subordinated Tier 2 bond. The impact of APRA’s November 2018 consultation... Show More

Fixed Income
Christopher Joye

Today I write about an interview this week with one of Australia's most successful and innovative funds management pioneers, Magellan's Hamish Douglass, who says he would have no issue with ASIC applying the Future of Financial Advice (FOFA) laws to the burgeoning listed investment company/trust (LIC or LIT) space to... Show More

Christopher Joye

Today I show how ScoMo has already delivered a $7bn plus budget surplus on a number of the key measures years in advance of what rating agencies and analysts (save yours truly) expected, which is the best budget outcome since 2008. I then present the evidence I used to demolish... Show More

Christopher Joye

In assessing whether to get long or short residential mortgage-backed securities (RMBS), we undertake a great deal of quantitative analysis, including revaluing the homes that protect these bonds at regular intervals and developing globally unique RMBS default and prepayment indices. (Regular readers will know that we exited most of our... Show More

Christopher Joye

Billed as the "property punch-up of the century" by News.com.au, and as "Fight Night" by Sky Business TV, I went head-to-head for 30 heated minutes with mega perma-bear John Adams last night on Peter Switzer's television show. I thought I smashed Adams pretty convincingly, and Switzer appeared to agree in... Show More

No Justin, that is totally incorrect. As I say in my article: "FOFA does not apply to wholesale (as opposed to retail) investors, nor to any normal business issuing shares, senior bonds, subordinated bonds or hybrids (preferred equity) to raise money to fund their operations. In these cases, conflicted commissions are permitted." Nobody is trying to get FOFA to apply to a company issuing debt or equity securities to raise funding for working capital. Where FOFA does apply normally is to all investment products---it prevents people paying conflicted commissions to brokers/advisers to sell investment strategies (ie, funds) to retail investors, though these commissions are allowed for wholesale investors. After FOFA became law, the industry lobbied to have LICs/LITs excluded, and they became exempt. We have since seen fund managers shift capital raising to the ASX so they can use conflicted commissions to raise money from retail investors. Without these commissions, these funds would not raise a fraction of this money through normal FOFA channels.

On Boiler-rooms are back as fundies pay sales commissions to flog their products -