Archives for February, 2015
Two weeks ago I wrote that Australia was “overbanked”, which poses a risk to the economy. Last week the Bank for International Settlement (“BIS”) released a research report entitled “Why does Financial Sector Growth Crowd out real Economic Growth?” This report references an earlier research paper “Reassessing the Impact of…
Last week I wrote about the unhealthy dominance of banks in the Australian economy. In fact, the financial sector is almost half of the market capitalisation of all listed companies. There are other issues in the Australian economy that could prove exceedingly risky on the downside. Australia’s deficit as a…
There are five large listed companies in Australia. Four of them are banks and the fifth is BHP, one of the world’s largest mining companies. The financial sector amounts to around half of Australian stock market capitalisation. The vast majority of the sector is comprised of banks and “diversified” banks.…
I last wrote about the Baltic Dry Index (“BDI”) in August 2014 in an article entitled “Is the Baltic Dry Index a Leading Economic Indicator”. I concluded that: “The BDI is not a crystal ball that shows the future of world growth. It is a measure of the supply demand…