Latest posts


Where has all the productivity gone?

From Goldman comes a great interview with Robert Gordon, professor of economics at Northwestern University, on why US productivity is slowing: The reason for the slowdown after 1970 is straightforward: we simply exhausted the productivity benefits of prior innovations. In the late 19th century, hugely important “general purpose” technologies, like electricity and the internal combustion engine,


Alcoa warns on China

From BI: Here’s the breakdown on Alcoa’s China outlook for 2015: Automotive production growth expected to come in at 1%-2%, down from 5%-8% Heavy duty truck and trailer production expected to fall 22%-24%, down from expectations for a 14%-16% decline Commercial building and construction sales are expected to grow 4%-6%, down from 6%-8% Packaging sales,


On the RBA’s Australian dollar model

From Tim Toohey and Andrew Boak: The RBA today released a paper titled “Modelling the Australian Dollar” which has reinforced the RBA’s preference for a relatively straightforward model of the Australian dollar based on 2 key long-run factors; the goods component of the terms of trade and real short term interest rate spreads in Australia


Glencore slashes and burns jobs

From the AFR: Glencore will suspend almost half its zinc production in Australia as part of broader cuts to the company’s global zinc, lead and silver mines in another attempt by the Anglo-Swiss mining and trading house to reduce pressure on already depressed commodity prices. …The cuts in Australia are expected to result in the loss of 535 jobs, which


Confessions of an Australian manufacturer

From The Australian: BlueScope Steel’s struggling Port Kembla steelworks looks to have avoided closure after a union vote approved 500 site job losses, leading chief executive Paul O’Malley to declare that 4500 jobs in the Illawarra region had been saved. The vote to allow restructuring and extra flexibility should allow the steelworks to survive depressed


Still think foreigners aren’t juicing house prices?

By Leith van Onselen Earlier this week, the ANZ-Property Council December quarter survey was released, which confirmed what many of us already know: that demand from foreign nationals is forcing-up prices, thereby helping to price-out young Australians from home ownership. The money chart is the one below, which shows a very strong correlation between the


NZ begins to question the population ponzi

By Leith van Onselen When the Intergenerational Report was released earlier this year, it included the next table showing that Australia’s population growth growth was the highest in the developed world between 2005 and 2010, running at an annual average pace of 1.8%: Back in August, it was revealed that New Zealand had taken the


Is the TPP already “dead on arrival”?

By Leith van Onselen With negotiations done and dusted on the Trans-Pacific Partnership (TPP) trade deal, attention has quickly turned to whether member countries will ratify the agreement, thus bringing it into force. Already in the US, opposition is mounting, suggesting that the TPP faces a difficult time getting through Congress. Yesterday, US Democratic front-runner,


Mirabile dictu: A policy election?

From Laura Tingle: [Greg] Hunt has had a busy week this week. He’s finally appointed board members to the Climate Change Authority (which suggests it might survive after Abbott’s attempts to kill it). There have been announcements about maps of the electricity grid designed to pinpoint spots where the efficiency of renewable energy investments can


Will Shorten act on Australia’s foreign labour scam?

By Leith van Onselen Amid deep concerns that the China-Australia Free Trade Agreement (ChAFTA) would allow a flood of Chinese workers into Australia, effectively surrender Australia’s autonomy over its migration laws and drive down local wages and conditions, The Australian has reported today that opposition leader, Bill Shorten, has developed a compromise that will be


Fed minutes dove up on oil

From the Fed minutes: In assessing whether economic conditions had improved sufficiently to initiate a firming in the stance of policy, many members said that the improvement in labor market conditions met or would soon meet one of the Committee’s criteria for beginning policy normalization.But some indicated that their confidence that inflation would gradually return


Daily iron ore price update (Sino money pit)

Here are the iron ore charts for October 8, 2015: Qingdao went a little crazy but Tianjin benchmark didn’t, up 0.7%to $US54.80 and under-performing the Dalian bounce. Singapore was flat and rebar immediately resumed its bleed out. We’re back from holiday and nothing has changed. In news, some new revelations about Sino Iron are pretty amazing,


Links 9 October, 2015

  Macro & Markets Oil-producing nations dip into sovereign wealth funds to fill gaps – Nikkei Asian Review $3 trillion corporate credit crunch looms as debtors face day of reckoning, says IMF – Telegraph Crude awakening: Beware oil’s ‘dead cat bounce’ – CNBC China and Europe may team up to snub TPP – CNBC Disregard


ASX at the close

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets The better-than-expected PMI numbers and the range of new policies announced, from easing property down payments to lowering the tax rate on new car purchases, helped boost H-shares 10.5%. Expectations were high for the Chinese markets to play catch up and rally along with


The NBN could boost Australia’s GDP by 2%

Cross-posted from The Conversation: The National Broadband Network (NBN) can boost Australia’s Gross Domestic Product (GDP) by about 2% in the long term and, more importantly, add to our national welfare by improving real household consumption by 1.4%. These results, based on our recent research on the NBN’s economic benefit, mean the NBN will produce