Diesel good guys and bad. Ohh VW, Leonardo DiCaprio wants to make a movie about your diesel engine debacle. Believe it or not, even before we know the full story, someone has written a four-page treatment for a book, and that book has been shopped around film studios in Hollywood and Paramount Pictures (part of Sumner Redstone’s media empire) and the slick-haired and very green DiCaprio wants to turn it into a movie, complete with baddies (VW) and goodies (American researchers battling to convince lazy regulators?). According to a report on Deadline.com the unnamed book “will reveal how the ‘more, better, faster’ dictum that prevails in 21st century boardrooms can lead down a dark path. The story follows the events of the scandal in which the company placed illegal software in their Clean Diesel cars that could tell when a car was being tested for fuel emissions and would turn on the emissions controls to cheat the test and meet EPA standards.”

It could in fact be something of an old fave for US studios — a chance to re-fight WWII with the bad, naughty German industrial behemoth in VW, up against the plucky US researchers. VW cars last starred in The Love Bug, a Disney movie from the 1960s featuring a loveable Beetle called Herbie. Next, DiCaprio exhumes Rudolf Diesel and proves he knew all about NOx emissions and covered them up? — Glenn Dyer

Back in the real world. VW’s problems continue to mount. Credit ratings groups are antsy, and China is upset and now investigating (very little chance of challenging any adverse decision there as a plethora of other companies can attest — such as Mercedes Benz, which copped a big fine over some market fiddling allegations). China is investigating even though it has confirmed that just 1900 cars with the diesel engines in question were imported into the country, and all the locally produced VW’s are clean. Standard & Poor’s cut VW’s credit rating from A to A minus and threatened another two-notch cut if the carmaker’s explanations prove to be poor. Standard & Poor’s cited what it called “material deficiencies” in VW’s management and governance for its decision to cut credit rating. Moody’s and Fitch ratings groups are also stalking VW with the glint of downgrades in their beady eyes. — Glenn Dyer

Hardhats in March. According to the widely publicised report from Macquarie Group analysts, Australian house prices will fall 7.5% (from peak to trough) from next March (why not January, or April?). And its gloomy forecast was joined by similar gloomy predictions from Bank of America and Credit Suisse, which warned of the dangers of recession (yes, the “R” word) from a house price downturn and a slowing in residential construction activity. Of course a “hard landing” in China won’t help, nor will the high level of household debt. But did any in the media stop and ask themselves, what does the 7.5% fall look like compared with recent price movements? Well, here’s something from CoreLogic RP Data:

“Over the past year, the CoreLogic RP Data Home Value Index has recorded an 11.0% rise across the combined capitals index, however, dig a little deeper and you see that the vast majority of growth in dwelling values is emanating from Sydney and Melbourne. It is also important to realise that these two cities represent around 40% of the entire country’s housing stock, so outside of these markets home value growth is very different.”

— Glenn Dyer

Dollar jumps, don’t tell forecasters. Many of those forecasting doom and gloom for housing (Credit Suisse, Bank of America) are also gloomy on the value of the Aussie dollar — forecasting it to be under 70 US cents, under 60 US cents, as low as 50 US cents. The time frames are generally the end of this year to a longer period, and its a forecast that you could support if you believed the sky is, or was, falling and we’ll all be rooned by a hard landing in China, a collapse in the eurozone (remember Greece?), a rise in US interest rates, inflation, deflation — you name it. This morning the dollar hit an eight-week high of 73.82 US cents and is up 7% from its most recent 52-week low of 68.96 (according to Bloomberg data). That rise is linked to the delay in the forecast US rate rise, the rise in the value of the Chinese yuan (now back to the level it was before the surprise cut in mid-August) and better commodity prices.

It was a collection of developments the forecasters mostly missed or skated over. Of course the dollar could fall (and the Reserve Bank and business wants it to go much lower to help the economy’s transition). But the path to meeting the forecasts of the gloomsters in currency, shares, house prices and, of course, the wider economy is many and varied, with traps for “hedgehogs” (forecasters who make dogmatic predictions, like the Macquarie house price forecast of 7.5%) along the way. — Glenn Dyer