Beef tangine and a sweet dessert

Beef tangine and a sweet dessert

Beef tagine.BEEF TANGINE
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800g prime beef fillet, cut into 2cm diceextra virgin olive oil1 red onion, cut into 6 pieces2 carrots, cut into 4cm pieces1 sweet potato, peeled and cut into 4cm pieces8 green beans12 almonds, skin removedsea salt2 tbsp honeyjuice of 1 lemon8 fresh dates, pitted1 small handful pitted black olives1/4 preserved lemon, rind only, finely chopped2 tbsp coriander leaves2 tbsp flat-leaf parsley leavessteamed couscous, to serve


1 red onion, roughly chopped4 cloves garlic, roughly chopped1 bunch coriander, roughly chopped1 bunch flat-leaf parsley, roughly chopped1 heaped tsp sea salt1 tbsp ground cumin1 tbsp ground coriander1 1/2 tbsp chilli powder1 tbsp ground turmeric2 tsp sweet paprika1 1/2 tsp ras el hanout (see Hot Tips)3/4 cup extra virgin olive oiljuice of 1 lemon

Serves 4

To make the chermoula, place all the ingredients in a food processor, except the olive oil and lemon juice. Process for 1 minute, then slowly pour in the oil to form a thick paste. Stir through the lemon juice. Set aside 1 cup for the tagine. (Makes 2 cups; store extra chermoula under oil for 1-2 weeks in the fridge.)

Combine 2 tbsp chermoula with the beef and set aside to marinate for 1 hour.

In a tagine or a large saucepan with a tight-fitting lid, heat a little extra virgin olive oil and the rest of the reserved chermoula. Add the onion, carrot, sweet potato, beans, almonds and a little salt and sauté for 2 minutes. Add enough water to half-cover the vegetables, then add the honey and lemon juice and cover. Reduce the heat to a very gentle simmer and cook for about 30 minutes. Remove the lid and turn the ingredients carefully. Add the dates and olives. Cover the pan again and cook for a further 30 minutes or until the vegetables are tender.

Heat a frying pan until hot and add some olive oil. When smoking, add the beef (see Hot Tips) and quickly sauté to colour and seal on all sides.

Spoon the beef into the tagine and mix well. You can serve the dish in the tagine or saucepan, spooned onto a large platter or divided among plates. Just before serving, sprinkle with preserved lemon rind and fresh herbs. Serve with couscous.


250g plain flour75g unsalted butter, cubedpinch sea salt90g icing sugar, sifted4 tbsp full-cream milk, plus 55ml2 egg yolks1 cup heavy cream200g dark bittersweet chocolate, cut into small pieces1 extra-large egg, beatencocoa powder (optional)

Serves 8-12

To make the pastry, place the flour, butter, salt and icing sugar in a food processor and process for 20 seconds. Add 55ml milk and egg yolks and process for 30 seconds, or until a mass forms. Turn the dough out onto a lightly floured bench and knead lightly for a few moments. Flatten it on the bench and form a ball. Wrap it in plastic and place in the refrigerator for 1 hour.

Preheat the oven to 180°C, and spray a 28cm tart tin with oil spray.

Roll out the pastry on a lightly floured bench until it is 2cm wider than the tart case. Roll the pastry over your rolling pin and gently ease it into the tart case, pushing the sides in gently. Rest in the refrigerator for 30 minutes.

Line the tart case with foil, add some rice and blind bake for 20 minutes. Remove the rice and foil, brush the tart shell with egg wash and cook for 10 minutes. Remove it from the oven and increase the temperature to 200°C.

To make the filling, place the cream and 4 tbsp milk in a saucepan. Stir and bring to a boil over medium heat. Remove the saucepan from the heat, add the chocolate and stir until the chocolate is completely melted and incorporated. Strain the egg into the warm chocolate mixture, and stir until absorbed.

Pour the warm filling into the cooked tart shell and smooth it with a spatula.

Turn off the oven, and bake the tart for 20 minutes or until just set. Allow the tart to cool, then sprinkle with cocoa powder, if using. (Do not refrigerate the tart.)


• You can also use a braising cut rather than prime beef fillet; just add more water and extend the cooking time to about 2 hours. However, I like the texture and the juiciness of using fresh-cooked meat served medium.

• Chermoula is a versatile addition to the fridge. For a great blackened and tasty piece of fish, smear a fillet with chermoula, then sear it in a pan.

• Ras el hanout is a North African spice mix. It is available at specialty food stores and spice suppliers.

• The chocolate tart is inspired by a recipe from French master Joël Robuchon. It is easy to make, with a great taste and texture.


Fortified grenacheThe 2008 Michel Chapoutier Banyuls ($25 for 500ml), a fortified grenache from the southern part of France, is perfect with chocolate. It handles the bitterness and bold flavours of the dessert with ease – and it’s a bargain.

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Their body language tells the story: gossip websites delve further into the split between Tom Cruise and Katie Holmes

Their body language tells the story: gossip websites delve further into the split between Tom Cruise and Katie Holmes

Vaguely smiling in the middle of a paparazzi pack … Katie Holmes steps out for the first time since the divorce announcement.It doesn’t take a team of Scientologist spies to figure out Katie Holmes and Tom Cruise’s marriage was in trouble.
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Yesterday numerology, mysterious cars and a secret escape plan were behind their split, and today the gossip trade is resorting to that other old chestnut – body language analysis.

Apparently just from looking at pictures of the couple in recent months you could tell it was all going straight to hell.

“Katie Holmes and Tom Cruise hold hands in an awkward fashion on last outing together,” screams an equally awkward Daily Mail headline.

It goes on: “Candid family shots paint an awkward picture of the final weeks of Katie Holmes and Tom Cruise’s doomed marriage.”

The article is based on photos of the couple in Louisiana in April, showing them holding hands, chatting and smiling.

Holmes was carrying a stuffed toy which is admittedly a little awkward, but surely not the deal breaker.

Us Magazine also urges readers to: “See Tom Cruise, Katie Holmes’ Awkward Final Photo Together”.

The photo shows the pair walking in Iceland together and the actress does indeed have a furrowed brow. A furrowed brow!

Many websites are also carrying pictures of Holmes stepping out in New York City for the first time since the divorce announcement.

For someone who, according to several reports from unnamed sources, fears she is being followed by a team of Scientologist spies Holmes looks … pretty damn relaxed.

TMZ says: “Here’s What Freedom Looks Like”.

Really? A photo of a woman smiling vaguely in the middle of a paparazzi pack is what freedom looks like? So, not that video of lab chimps seeing sunlight for the first time after 30 years of medical testing?

The gossip website reported the final straw for Holmes was Cruise’s decision to send their six-year-old daughter Suri to a “hardcore” Scientologist boot camp called Sea Organisation.

The boot camp teaches the highest levels of Scientology to children as young as five, who are sent there without their parents, TMZ reported.

According to a copy of a Sea Organisation contractpublished by the Los Angeles Times in 2005, members agree to commit to it for one billion years. One. billion. years. That is actually pretty hardcore.

The Church of Scientology has since denied Suri Cruise was a candidate for Sea Org, which their lawyer says has a minimum age restriction of 16.

Us Magazine has one hell of a scoop.

Get this: Katie Holmes bought flowers, laundry detergent, cleaning supplies, olive oil and “other items” the day before she filed for divorce.

An “onlooker” told the magazine she was nice “but not effusive”.

The trusty onlooker also caught a touching moment between Holmes and her daughter, which sounds like something straight out of a particularly cheesy episode of Dawson’s Creek.

“Once they reached the checkout line, Holmes hugged Suri. ‘You know you are an amazing little girl, right?’ she told her daughter, according to the onlooker. ‘I love you more than anything’.”Scientology: The Ex Files

Holmes will soon be able to buy a lot more of those “other items”, with her estimated $US25 million worth expected to swell in the divorce settlement, America’s ABC News reported.


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State shivers through winter’s coldest night

State shivers through winter’s coldest night

Brisbane awoke to its coldest morning since last winter today, while some parts of the state shivered through their coldest night in eight years.
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The temperature in Brisbane dropped to 6ºC just before 6am, several degrees below the July average minimum of 10ºC.Check your local weather forecast

But it was far colder in other parts of the state, falling to -3.1ºC in Kingaroy and Oakey, -2.4ºC in Warwick and -1ºC in Ipswich. It fell just below freezing at Amberley and Beaudesert (-0.2ºC) and just under 1ºC in Gympie and Toowoomba, Weatherzone南京夜网.au senior meteorologist Brett Dutschke said.

”The overnight low was Brisbane’s coldest night since last winter and that’s the case for a good chunk of southeast Queensland – the Gold Coast, the Sunshine Coast,” he said.

Coolangatta fell to 3.8ºC and Maroochydore to 4.4ºC.

Mr Dutschke said the coldest recorded minimums were, as usual in the state’s west.

”Some real standouts are in the west of the state, mainly west and northwest. In fact for Cannington (3ºC) and Longreach (1ºC) it was their coldest night in eight years. In Winton (2°C) it was their coldest in seven years.”

In Brisbane and Ipswich today, maximum temperatures are predicted to reach 19ºC, while it will reach a top of 18ºC on the Gold and Sunshine coasts.

”The coldest place in Queensland today will probably be Stanthorpe, which will probably only get to 10ºC or 11ºC degrees today,” Mr Dutschke said, while Toowoomba is expected to reach a top of 12ºC.

It’s expected to be much the same tomorrow before warming up later in the week, he said.

”Tonight and tomororw morning looks very similar to last night and this morning, mostly clear skies and top temperatures much the same. Tomorrow during the day will only be marginally warmer in most parts of the state compared to today, about the same or a degree warmer,” he said.

”Progressively [during the week] both nights and days will become warmer but the nights will be the most noticeable change, particularly near the coast.”

In Brisbane, overnight minimum temperatures are expected to rise slightly to around 7ºC on Thursday and 9ºC on Friday, before remaining at about the 10ºC average on the weekend and rising to 13ºC on Monday night. Maximum temperatures will rise after tomorrow’s predicted 19ºC to remain about 20ºC-21ºC during the rest of the week.

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Watch: MP Craig Emerson’s song and dance show

Watch: MP Craig Emerson’s song and dance show

WHYALLA, poor Whyalla. Sources confirm the carbon tax, introduced on Sunday, has not (yet) wiped it off the map. But now the South Australian steel city has bigger problems than the prospect of annihilation.
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As the unlikely pawn in the epic carbon tax battle between the government and the Coalition, the town was yesterday subjected to one indignity too many.

The Trade Minister, Craig Emerson, sang about it on national television. His song, accompanied by a jig that was more convulsive than it was rhythmic, was scarier than any carbon tax-related price rise could ever be.

In an interview with the ABC’s Mark Simkin, Emerson, who visited Whyalla on Sunday, was asked what the mood was like there.

The Trade Minister paused in a stagy manner as his media advisor cued the music and then sang: ”No Whyalla wipeout, there on my TV /Shocking me right out of my brain / Shocking me right out of my brain”.

It was a less-than-tuneful re-working of the old Skyhooks number Horror Movie.

There were other signs the world had gone mad. Julia Gillard did an interview with her radio nemesis, 2GB, home to her tormentor Alan Jones. Meanwhile, Tony Abbott spoke to not one but two ABC radio stations – Radio National and Melbourne’s local ABC. The Opposition Leader usually avoids the public broadcaster.

Both leaders were desperately peddling their versions of the carbon-tax future. They dashed from youth-focused commercial stations to morning television and then to press conferences.

Abbott tweeted and Gillard bantered with Kyle Sandilands, who invited himself to her place for a barbecue, the sausages for which may or may not be more expensive now, depending on whom you believe.

Gillard did more than 10 daytime media calls. She said the Clean Energy Future would create jobs, not cost them. She emphasised the tax cuts and compensation with which the government is showering lower-income earners.

She argued the difference between a ”price” and a ”tax” with broadcaster John Laws. Whatever you wanted to call it, individuals wouldn’t pay it, she said.

Abbott, who had around seven media engagements during the day, said ”millions of Australian households will be worse off”, according to the government’s own figures.

He said the tax wouldn’t even achieve emissions reductions.

Where Gillard uses averages (the cost-of-living increase will be a teensy 0.7 per cent), Abbott uses specifics (just wait till you open your electricity bill).

It remains to see which tactic will prevail, and whether or not Emerson’s creative use of song will prove an effective weapon against Abbott, or what the military euphemistically calls ”blue on blue”.

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Health: Australian women using IVF to screen out cancer

Health: Australian women using IVF to screen out cancer

FERTILE women with genes that predispose them to breast and ovarian cancer are using IVF to select embryos without the genes so their children are free of the distress they cause.
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In a new trend that has heightened ethicists’ fears of ”designer babies”, Australian IVF specialists said women with mutations of genes called BRCA1 and BRCA2 were spending thousands of dollars on a technique called preimplantation genetic diagnosis (PGD) to select normal embryos

Females who carry mutations of the BRCA 1 and BRCA 2 genes have a 60 to 80 per cent chance of getting breast cancer during their lifetime. Those with BRCA 1 also have a 30 to 60 per cent chance of getting ovarian cancer while those with BRCA 2 have a 5 to 20 per cent chance of getting getting ovarian cancer.

Couples where one partner has such a mutation have a 50 per cent chance of having a baby with the same mutation so the technique allows them to cut this risk to between 0.1 and 10 per cent depending on the accuracy of the diagnostic test developed for their specific mutation.

Doctors from Victoria’s leading IVF clinics, Melbourne IVF and Monash IVF, said about 10 couples had used the procedure for the breast and ovarian cancer genes since a 2008 change in reproductive treatment laws allowed such use.

The medical director of Melbourne IVF, Dr Lyndon Hale, said some couples may chose to use the procedure to avoid the trauma of prenatal diagnosis which raises the question of abortion. Some had also seen family members endure breast cancer from a young age or had had their breasts removed to reduce their risk of cancer.

”Cancer is a horrible disease … so these people want to get rid of it from their family tree,” he said.

Dr Hale said he believed clinics in other states, including NSW, were offering PGD for BRCA mutations.

Dr Elissa Osborne, from Monash IVF in Melbourne, said couples wanting to use the diagnostic tests had to wait about three to six months for the one to be created for their particular mutation. This cost about $2000.

They could then go through the usual IVF procedure of creating embryos that would be tested at day three or day five of life to see if they carried the gene mutation. This allowed couples to select unaffected embryos for implantation. This roughly doubled the cost of IVF cycles from about $3500 to $7000.

While PGD has been used in Australia for 20 years to help couples remove the risk of a growing list of inherited diseases such as cystic fibrosis and Huntington’s disease, doctors and ethicists said using it for BRCA 1 and BRCA 2 gene mutations remained controversial for several reasons.

First, the test does not remove all risk of breast and ovarian cancer for the child who will still have a 10 per cent ”background risk” of the cancers which exists for the rest of the population without gene mutations. And second, there is a theoretical risk that hormonal treatments used for these women to go through IVF increases their personal risk of developing cancer.

Professor Willem Verpoest, an expert presenting research on the topic at a European Society of Human Reproduction and Embryology meeting in Istanbul this week, said although there was no evidence of an increased rate of cancer in these women yet, it was the subject of ongoing research and needed to be monitored.

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Freed lawyer speaks to family from Libya

Freed lawyer speaks to family from Libya

An “ecstatic” Janelle Taylor heard her daughter, human rights lawyer Melinda Taylor, say “I love you” this morning as she was freed after spending more than three weeks jailed in Libya.
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Although unable to speak about her experience, the lawyer was able to reassure her Brisbane-based mother that she was fine in what Mrs Taylor described as an “emotional” phone call.

Mrs Taylor said she spoke to her daughter in the early hours of this morning after the Libyans handed her over to Australian ambassador David Ritchie.

And Mrs Taylor was chilling a bottle of champagne to celebrate when she sees her daughter’s face on Skype later today.

Ms Taylor, has been held with three International Criminal Court colleagues since she travelled to Zintan, southwest of Tripoli, on June 7 to help prepare the legal defence of former dictator Muammar Gaddafi’s son Saif al-Islam.

“She didn’t tell me anything about her experience in the jail because she was in the convoy and the phone call was monitored so the only thing she said was she loved us and looked forward to speaking to us and she’s excited to go home,” Mrs Taylor said.

Mrs Taylor has been in constant contact with her daughter’s husband Geoff Roberts over the past few weeks and has arranged to talk to her daughter on Skype about midday when Mrs Taylor and her husband John will have a proper celebration.

“We’ve got a bottle of champagne here that our other daughters brought over two weeks ago and the whole time Melinda has been in there we said ‘we have to do something to support Melinda so we went off alcohol’,” she said.

“So the bottle of champagne is now in the fridge and [Melinda’s husband] Geoff said he’d Skype us when she gets home at about midday today and that’s when we’ll drink the champagne.”

“…It will be great, I’ll be very happy to see her face.”

Ms Taylor has a two-year-old daughter, Yasmina, who she will be reunited within the next few hours in Hague along with her husband.

Foreign Minister Bob Carr rang Mrs Taylor in the early hours of this morning to tell her that her daughter had been handed over by Libyan officials ending a “harrowing” few weeks for the parents.

“We are now ecstatic that she’s actually been handed over by them because we were excited when we told she was going to be released but we were ecstatic when we got the email last night to say and a phone call from Bob Carr to say the Libyans had handed her over to the ambassadors,” Mrs Taylor said.

She said Melinda did not have plans to come to Australia until December and her parents had decided it was best to wait until then to see her.

“Melinda said ‘look Mum and Dad I would love you to come over’ and we would be on the next plane but we feel maybe Melinda’s life need to go back to being normal so she can get on with her life,” she said.

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Freed lawyer speaks to ‘delighted’ husband

Freed lawyer speaks to ‘delighted’ husband

Australian lawyer Melinda Taylor, left, arrives at the airport in Rome. Australian lawyer Melinda Taylor leaves jail.
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On a plane home … Melinda Taylor with husband, Geoffrey Roberts, and daughter, Yasmina.

Australian lawyer Melinda Taylor is on a plane on her way home to the Netherlands, after she was released from jail in Libya overnight.

She is due to arrive in Rotterdam later today, having flown out of Tripoli on an Italian military aircraft. She will be met in the Netherlands by her husband Geoff Roberts and her two-year-old daughter, Yasmina.

Mr Roberts told the National Times that her family was very relieved by her release. He had spoken to her on the telephone during her trip and said, “she’s OK”.

“I am delighted that she’s been released. I am obviously very happy about that. But I don’t want to talk too much until I have spoken to her.”

An “ecstatic” Janelle Taylor heard her daughter say “I love you” this morning in an emotional phone call.

Although unable to speak about her experience, the lawyer was able to reassure her Brisbane-based mother that she was fine.

The Minister for Foreign Affairs, Bob Carr, who is in New York, said the news of Ms Taylor’s relief had given him a boost.

“It’s actually lifted the jetlag,” he said this morning.

“I only wish that I could be there at Rotterdam airport when Melinda arrives and she lifts up that two-year-old,” he said.

He thanked Libyan authorities, especially “Prime Minister el-Keib and Deputy Foreign Minister Aziz, whose personal intervention was instrumental in bringing this matter to a close”.

Senator Carr said that Ms Taylor’s husband had been able to distract their daughter by changing the subject and talking about their pet dogs whenever Yasmina had asked about her mother.

But the Foreign Minister also said that the young girl had been waking up at night and crying unaccountably.

The Australian government has been pushing for Ms Taylor’s release, since she and three International Criminal Court colleagues were detained in the city of Zintan on July 7, accused of threatening Libya’s national security.

It was alleged that Ms Taylor had a spy camera in a pen and passed coded letters to the son of Muammar Gaddafi, Saif al-Islam Gaddafi, from his former right-hand man, Mohammed Ismail.

The Australian lawyer’s release comes after weeks of talks that involved the Australian government, Libyan authorities and the ICC.

Ms Taylor was released to Australian ambassador-designate to Libya, David Ritchie, at 1am AEST today and has travelled back to Europe with a delegation lead by ICC President Song Sang-hyun.

Judge Song told reporters on the tarmac in Rome that Ms Taylor was in good spirits and health.

“I’m very happy to bring them all back to freedom,” he said.

Ms Taylor is still likely to face an internal ICC inquiry into allegations raised by the Libyan authorities.

In a statement yesterday, the court said the information reported by the Libyan authorities would be fully investigated in accordance with “ICC procedures”.

But Senator Carr said he did not think this was a concern as the issues between Libya and the ICC had been resolved. “We can rest easy about that,” he said.

Senator Carr said that even though Ms Taylor has been released, there were times when he thought the process was taking too long and he feared the worst.

“As late as Sunday [I] was talking to [parents] John and Janelle,” he said.

“I had to tell them the evidence was ambiguous.”

The Foreign Minister said that the episode, which has required a lot of interaction with the Libyan government, had had a positive effect on Australia’s relationship with the country.

“It’s had the ironic effect of giving us real rapport with the Libyan leadership,” he said.

“I’ve come to appreciate my conversations with the prime minister, and the deputy foreign minister.”

Follow the National Times on Twitter: @NationalTimesAU

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Warranty company silent on return of goods

Warranty company silent on return of goods

THE owner of a national extended-warranty company appears to have gone silent, leaving many consumers wondering when their electrical goods – sent in for repair – will be returned.
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Do you know more? Email Larissa Ham at [email protected]南京夜网.au

Consumer Affairs Victoria and NSW Fair Trading have received a number of calls from consumers experiencing problems with company U-NITED Warranties, owned by long-time businessman Vern Rickman.

A Consumer Affairs spokeswoman said consumers had reported their goods were being held by the company, which also operates a maintenance area, for repair or replacement, but had not been able to contact the trader to arrange for their return.

Both bodies are making inquiries to confirm the status of the company and say they will provide consumers with information as soon as possible.

Mr Rickman runs a number of companies under the United Group banner, including a warranties division – said to be Australia’s largest – along with the maintenance arm and an audiovisual department that has had clients including McDonald’s, My Chemist, Myer and Crown Casino.

At least part of the business is believed to be in trouble, but despite repeated attempts, The Age has been unable to contact Mr Rickman to verify the status of the company. Calls to the head office go straight to an answering machine.

A multimillion-dollar fine dining restaurant in Victoria’s South Gippsland, Archies on the Creek, owned by Mr Rickman, closed earlier this year.

Last year Mr Rickman told The Age he was also the major shareholder in PumpTV, a company rolling out small TV advertising screens on petrol bowsers throughout Australia and China. In an interview last year, Mr Rickman said the screens were expected to be viewed by 2 million people a month within the next two years. A call to PumpTV yesterday was greeted with a hang-up.

Meanwhile, retailers including Myer and Big W have ceased selling warranties through the group, and have been fielding phone calls from concerned warranty holders.

Myer spokeswoman Jo Lynch said the retailer stopped selling extended warranties through U-NITED about a month ago after becoming aware that customers weren’t able to contact the company.

”We are still trying to determine the extent of outstanding claims but at this point in time have had little information passed on from U-NITED,” she said. ”Myer is working through a process to locate customer goods that may be currently located with repair agents and transport companies who now have no contact point.”

Concerned warranty holders should phone Myer’s customer service hotline on 1800 811 611.

Big W stopped selling the extended warranties mid-June, after the warranty company advised them they were experiencing difficult trading conditions, Big W spokesman Benedict Brook said. The retailer has only been selling the warranties through U-NITED since late last year and it is believed no Big W customers are missing electrical goods. However, thousands of customers would be holding the warranties. Mr Brook said the retailer was in the process of finding another provider.

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RBA expected to hold rates steady

RBA expected to hold rates steady

THE Reserve Bank board is considered certain to sit on its hands for the first time in three months today amid signs its previous rate cuts are stabilising property prices.
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The RP Data Rismark survey finds Sydney and Melbourne prices bounced back 1 per cent in June after slipping in May 1.2 and 2.7 per cent.

Daily data shows the turnaround began after the Bank’s May 0.50 point rate cut and gathered pace after its June 0.25 point cut. ”Things are improving, but we would need further gains to be assured of a stabilisation in house prices let alone a recovery,” said Westpac economist Matthew Hassan.

The Sydney median price is $541,000, down 2 per cent over the past year. The Melbourne median price is $480,000 – down 6.6 per cent.

Separate figures from mortgage broker AFG show a surge in refinancing to take advantage of the Reserve Bank rate cuts totalling 1.25 percentage points since November.

Two in every five of the new mortgages sold in June were for borrowers wanting to refinance rather than buy. In a sign that borrowers expect further rate cuts this year the popularity of fixed-rate loans slumped to its lowest point since September. One in every six home loans were at fixed rates, down from one in every four in March.

Every one of the 23 market economists surveyed by Bloomberg expects the Reserve Bank to stay its hand today – an unusual consensus. Pricing in the futures market, which is notorious for overestimating the likelihood of rate cuts, puts the probability of a cut today at just 16 per cent.

AMP chief economist Shane Oliver said a spate of strong employment news since the June board meeting will leave the board feeling it can wait before cutting again.

”I tend to think because they cut at two meetings in a row, and because the growth and employment figures surprised on the upside, they would probably be inclined to sit back and wait and see,” he said.

Deutsche Bank economist Adam Boyton said he thought the bank would cut again later this year. ”Consumer confidence is lower now than when the Bank started to move at the end of last year.”

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Why our banks can’t afford faster growth

Why our banks can’t afford faster growth

Banks are quietly content with the flood of deposits heading their way.There was an important sentence or two missing from yesterday’s Westpac warning about financial servicessector growth remaining modest – modest growth is all our banks can handle anyway.
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While our senior bankers might suggest their highly-remunerated whiz-bang management talents are prevented from delivering stronger profit growth by dull-witted customers being overly cautious, the reality is that the banks are incapable of doing much more than they’re doing.

The combination of stiffer Basel III capital requirements and the competition for domestic profits means banks are quietly gratefully for subdued credit demand.

The deposit loop is a virtuous cycle for the banks at present, but it has the potential to rapidly turn vicious. Fearful Australians aren’t seeking to borrow much, returning our household savings ratio to something more like our longer-term average, before we started bashing the collective plastic in the 1990s. Instead of wanting to borrow, we’re stuffing increasing amounts of money under the banks’ mattresses.

We’re encouraged to do that by the tasty real interest rates on offer from the banks who are genuinely competing for deposits, but it’s a finely balanced thing – that strong deposit growth is just enabling the banks to meet the limited credit growth without drama in this uncertain world where large amounts of foreign funding are frowned upon.

Should we collectively experience an outbreak of confidence, that fine balance would be lost. If we were more confident about the economic outlook, we’d be less likely to leave money in the vaults – we’d be withdrawing cash to buy shares or property.

The Catch-22 is that we’d also be keener to borrow more, but wouldn’t be able to because we’d be reducing the deposits that would fund the borrowing.

Money hunt

That danger of Australians wanting to both borrow more and deposit less deeply worries the bankers who have the job of finding money to allow their business to operate.

They’re happy for the uncertainty to continue – keep those European crisis headlines coming.

Symptomatic of how serious the competition has become among the banks wanting to borrow our money is the fact that the best online savings rate has risen again after initially falling in the wake of the RBA interest rate cuts.

The new leader in the field is the Westpac brand, RAMS, offering 5.75 per cent, albeit with a couple of catches – a minimum of $200 a month deposited and no withdrawals made.

(Rabo is in second place, offering 5.6 per cent but that’s only a four-month special while NAB’s UBank has 5.51 per cent with a minimum deposit requirement.)

That two of the top three offers are being made by Big Four banks that traditionally could raise deposits more cheaply than smaller institutions tells us something about how keen they are to borrow.

From an investor’s point of view, the subdued environment has its own rewards, as long as you’re not sitting on shares bought at the pre-GFC peak.

At present pricing, banks only have to maintain dividends to make holding bank shares richly rewarding thanks to those fat franked yields.

A little profit growth is always welcome, but let’s not get too enthusiastic – we wouldn’t want to encourage optimism.

Michael Pascoe is a BusinessDay contributing editor.

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