Li Ka-shing’s Magic Trick: Unlocking Billions From Undervalued Assets

There has been much speculation about the reasons behind Hong Kong tycoon Li Ka-shing’s reorganization of the two pillars of his family business empire, Cheung Kong (Holdings) Ltd. and Hutchison Whampoa Ltd. Media have shared many juicy conspiracy theories. No matter what rumors suggest, from an academic perspective these moves make sense and indicate a very rational decision by a shrewd, experienced businessman.

The Evolution Of Organizations Part 2

This concept and visual was taken from my new book, The Future of Work: Attract New Talent, Build Better Leaders, and Create a Competitive Organization. A few days ago I introduced part 1 of The Evolution of Organizations so if you haven’t read/seen that post yet then I highly recommend you […]

Microsoft Surface Pro 3 Gets A $100 Discount

The “tablet that can replace your laptop” just got a discount. Most Surface Pro 3 models at Microsoft stores (online and physical retail stores in the U.S.) are getting a $100 discount. That includes the $999 model (now $899), the $1,299 model (now $1,199), and the $1,549 model (now $1,449). All those […]

RBA risks inflating housing bubble if it cuts interest rates, say experts

Latest house price survey shows continued rise in capital cities
Economists say cheaper loans could fuel the market Read the Guardian’s live blog on the RBA’s rates announcement from 1pm on Tuesday

Australian economy struggling to find momentum, says NAB

The Reserve Bank of Australia risks inflating the housing bubble if it cuts rates this week, a leading economist says, as new figures show house prices got off to a flying start in 2015.
Rate cut expectations have been growing since last week, after the Reserve Bank of New Zealand abandoned its bias for raising interest rates, triggering speculation that Australia’s central bank would also adopt a more cautious approach.
There is now a two-in-three chance the RBA will cut the cash rate to a new record low of 2.25% on Tuesday, according to market expectations.
The prospect of a rate cut sent shares higher in Australia as investors chased higher yielding banking and mining stocks. It contrasted with deepening gloom around Asian markets after more disappointing figures about the state of the Chinese economy. The Australian dollar was up marginally at $77.85c.
But CommSec chief economist Craig James says a batch of data released on Monday in Australia, including house price and inflation figures, had shifted the interest rate debate in favour of the RBA remaining on hold at 2.5%.
Property prices experienced their biggest rise in six months in January, with capital city dwelling values up 1.3% in the month, according to figures from CoreLogic RP Data.
Prices in Sydney were up 1.4% in the month while prices in Melbourne jumped 2.7%.
Meanwhile, underlying inflation lifted sharply in January.
Excluding volatile prices such as petrol, fruit and vegetables, underlying inflation rose 0.7% last month, according to the TD Securities/Melbourne Institute monthly inflation gauge.
“The latest economic data have shifted the balance of risks in favour of rates being left on hold,” James said.
“While global deflationary forces support the case for an easing of domestic monetary conditions, the risk is that another rate cut will lead to unsustainable strength in domestic home prices and contribute to inflationary risks.
“The strength of the housing market will clearly feature at the Reserve Bank board meeting.”
James’ sentiments echoed those of CoreLogic RP Data head of research Tim Lawless.
“Lower interest rates could potentially add further fuel to the housing market, particularly the investor segment, which continues to remain strong based on recent data,” Lawless said.
St George senior economist Hans Kunnen said strong house price growth, along with firm retail sales and jobs growth, suggested the RBA would remain on hold throughout 2015.
He said people were ignoring the RBA’s warnings about the potential for house prices to fall.
“Warnings from the RBA that dwelling prices do not always rise appear to be ignored by the property-buying public,” Kunnen said.
The RBA board will announce its interest rate decision at 2.30pm on Tuesday.

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