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December 10 2021

 
 
1. Santa’s sleigh risks being grounded…

Hopefully you heeded my warnings to buy your presents early! Diesel run trucks could be parked up within 6 weeks according to DGL, a listed company that produces 60% of AdBlue. AdBlue is a critical input into diesel trucks and reduces emissions. Without AdBlue, which is high grade urea, trucks can’t operate. Supply chain disruptions has meant DGL is sitting on just six weeks of supply in warehouses. And they currently have 1,000 unfulfilled orders. The Aussie Govt is very concerned and has set up taskforce to fix it. If trucks stop running, everyday Australian’s will start to feel what a supply chain squeeze looks like!

2. Lots of loans…

APRA came out with their September quarter property stats this week. Despite increasing the buffer required to assess repayment ability from 2.5% to 3% in early October, new home loans funded keep growing. The percentage of loan flow with a DTI (debt-to-income) ratio greater than 4x is now >67% of flow!

Source: APRA

3. Buybacks back alright…

Hopefully some of you have now got the Backstreet Boys song in your head! Buyback authorisations in the US hit a new record all time high of $1.114 trillion YTD.  This now surpasses the prior record of $1.109 trillion in 2018 by 0.5%. When comparing y/y, 2021 YTD is up 175.7% vs 2020 YTD authorizations! And we are seeing a similar trend across the Australian market.