Perth commentator Tim Treadgold is one of the state's highest-profile business journalists. He brings decades of experience to Business News, offering readers sharp and insightful analysis of current events and breaking news.
Mathematically it’s impossible, but in about 11 days Australian investors will discover whether one plus one can add up to more than two – because that’s the day the son of BHP Billiton, South32, lists on the ASX.
Can interest rates rise and fall at the same time? They can if you’re looking at different markets, because just as the Reserve Bank of Australia considers a fresh cut in its prime rate to try and boost the local economy, interest rates in other markets are starting to rise.
It’s not easy finding a connection between a big Australian cattle company, an American business that makes jet engines, and the Western Australian government’s insurance arm, but if you look closely they’re all doing something at the same time – selling property.
Andrew Forrest’s worst nightmare is that he will one day relive his painful experience with pioneering low-grade nickel ore processor Anaconda Nickel; so surely he must have suffered an ‘Anaconda moment’ when the iron ore price fell below $US50 a tonne overnight.
At first glance, the planned $600 million expansion of Perth’s Karrinyup Shopping Centre seems to run counter to the relentless march of internet retailing, especially as a fresh report predicts that 50 per cent of all retail sales will be made over the internet in less than 10 years.
It might be bold to suggest that Andrew Forrest consider a career change, but as his fortune shrinks and as his iron ore business struggles in a flooded market, there is a nickel deal to be done that could be a lot more fun than playing the role of fading star.
You don’t need to listen too closely to hear the pips squeaking in Western Australia’s iron ore lemon after a week-long debate about the state’s most important industry, which appears to be heading for a crisis that will hit companies and governments in equal measure.
It is a long time since Western Australia had its own finance industry and while shadow banking, the hottest game in the money world, could be just another fad that fades as quickly as it has grown, there is the potential for home-grown finance to make a return to Perth.
If in doubt that we really are sailing in unchartered economic waters, consider one number; it’s a big number, but the estimated $US2 trillion invested around the world in government and corporate bonds that carry a negative interest rate paints a very disturbing picture.
Following the money is always the best way to see what interests a rich man because it tells you two things – what he likes as an investment for future growth, and what he sees as having reached the limits of growth.
Rio Tinto’s strong profit reported earlier today will please investors in one of state’s biggest employers, though the big miner’s fresh round of job shedding is a warning shot across the bows of the Western Australian economy, with more warning shots likely to be fired over the next 12 days.
Australia’s latest political crisis, the potential dumping next week of the prime minister, Tony Abbott, is masking a far greater threat to the country – a fresh outbreak of the GFC caused by the dramatic build-up of private and public debt.
Fortescue Metals Group surprised investors earlier today with a better-than-expected December quarter production report, but that should not stop speculation that it could be a key player in Western Australia’s deal of the decade.
As is the case with most wars, there’s never agreement on who fired the first shot; not that it really matters in a hot war or the currency front, which is rapidly engulfing the world and should soon involve action by Australia.
The second-hand car business was revolutionised 20 years ago with the arrival of the internet, but there is a second revolution under way that promises to be even more disruptive and could have a significant effect on some of Western Australia’s best-known car yards.