News Round-Up: 2 Sep 2008 – housing, economy and currencies

Today’s news round-up will focus on articles in three subject areas: housing, the economy, and currencies. Enjoy!

Top Story
HSBC says super-rich clients moving into cash – Reuters (do they know something we should know?)

Global housing

The housing market is down in many places: the UK, Ireland, Spain South Africa and the U.S. to name a few. But, the sentiment is not nearly as negative as it was 2-3 months ago. Notice the headlines on UK properties showing that the market is falling for everyone except the super-rich, where prices for properties over £10 million have risen.

South Africa: Property still in the doldrums, prices down 1.8% – Fin 24
Canada: Resale home listings hit record high – National Post
Ireland: Glimmer of hope as house prices show smallest fall in 18 months – Irish Independent
UK: Mortgage approvals drop to lowest since records began – Guardian
UK: House price slump worse than feared – Telegraph
UK: Credit crunch pain hits £5m homes, says Knight Frank – Evening Standard
UK: As crash looms, value of homes for super-rich keeps on rising – Independent
Australian Home-Building Approvals Fall 2.3% on Rates – Bloomberg

Global economy
Europe, North America and Japan have been looking weak for quite some time and the latest headlines out of those areas confirm this weakness except in Denmark (see story), where the economy has exited recession, Sitzerland and the Netherlands. However, production data in China shows extreme weakness there too and this has got to be worrying for those thinking that China can decouple. Chinese manufacturing is in recession.

Canada dodges recession – National Post
US: ‘Worst is yet to come for U.S. consumers’ – National Post
UK: The economy looks bad, but not nearly as bad as the blundering Government – Independent
Stephen King: Interest rates should come down but the damage to growth has been done – Independent
Denmark exits recession – El Pais (in Spanish)
Spain: Unemployment Up 25% in one year – El Mundo (in Spanish)
Spain: The crisis has emptied hotels in the Costa del Sol – Figaro (in French)
‘Pronounced slowdown’ in Germany – Fin24
German July Retail Sales Fall as Energy Prices Jump – Bloomberg
German inflation eases in August – Sydney Morning Herald
Swiss Second-Quarter Growth Unexpectedly Accelerates – Bloomberg
Netherlands: Purchasing power for workers holds – Financieele Dagblad (in Dutch)
Japan puts Billions into stimulus package – Handesblatt (German)
China’s manufacturing activity nearing contraction – Market Watch

Currencies
A few weeks ago, I had said I see the Pound and the Australian dollar being particularly weak going forward. This has panned out as I predicted with the RBA cutting rates and the BoE likely to do so in the near future. I still see downside for the Pound and the Australian Dollar, even more so than the Euro, Swiss Franc or the Canadian dollar, purely on interest rate grounds alone. The U.S. Dollar’s rise may be good for inflation, but it’s bad for the economy.

RBA cuts official cash rate to 7% – SMH
Pound hits low against euro, as recession looms in U.K. – Globe & Mail
Pound falls to new low ahead of Brown rescue deal – Times Online
Alistair Darling ‘talking down the economy’ as pound slides – Telegraph