With the Brexit vote in June and the Donald Trump win in the U.S. Presidential election in November 2016 delivering an electoral riposte to a generation of increasing globalisation, Gunnamatta spoke with David Llewellyn- Smith and Leith Van Onselen about how the Australian economy is currently positioned, and of the implications for Australian economic policy
Global Macro / Markets / Investing: What the world worries about – The Economist Agglomeration economies, productivity, and quality upgrading – VOX Giving Thanks: Hedge-Fund Managers Are Still Super Rich Edition – Vanity Fair The founder of Vanguard on the power of indexing – Bloomberg Americas: Republicans Divided Between Romney and Giuliani for Secretary of State – NY Times Trump’s
by Chris Becker Steady as she goes is the order of the day here in Asia with no lead from US markets, closed overnight due to the Thankgsiving holiday. The Shanghai Composite is not going anywhere, with a small slump at the open recovered by lunch where it sits now with a scratch reading heading into
From MarketWatch: If you have been puzzled about the crash in gold prices after Donald Trump’s election, you are in the company of almost every analyst and media outlet in the western world. …India’s Modi has directed that 500 and 1000 rupee notes be banned. These notes represent 20% of the cash value in circulation
The CNY fixing has fallen to another new low today: And the response in markets is predictable with iron ore once again limit up! Interestingly, this week has seen iron ore overtake coking coal as Banana Man’s favoured roulette wheel, for whatever reason. Big Iron is off to the casino too with BHP 2.8%, RIO 2.4%,
Cross-posted from Independent Australia: Upper-class “welfare” runs rampant through the Australian taxation system via rate cuts, exemptions, deductions, concessions and rebates — making hardened street beggars look like they’re just not trying, writes Michael Clanchy. The lobbies They can make a hardened and aggressive street beggar look like he just isn’t trying. I am talking about the
From The AFR: An oversupply of apartments in Melbourne and Brisbane could send unit prices down by as much as 6 per cent in 2017, according to HSBC… “A national apartment building boom, which has been part of the rebalancing act, is likely to deliver some oversupply in the Melbourne and Brisbane apartment markets, which is
By Leith van Onselen ABC’s The Business aired an interesting segment examining calls for Australia to re-introdude an inheritance, which used to exist in Australia until late-1970s and early-1980s. The segment features a number of experts including ‘rockstar’ French economist Thomas Piketty, Mark Carnegie, and Australian economist Frank Stilwell, who note the benefits in principle.
By Leith van Onselen Fairfax has published an interesting piece today on the ongoing retrenchment of wages across the mining industry, whereby workers are taking large pay cuts to keep mining operations viable: Coal prices may be recovering, but there are no celebrations in the mining town of Collie, Western Australia, where workers are fighting
The Aussie bond selloff is still going great guns this morning with yields breaking out to new highs across the curve: Unlike the US, the curve is still steepening here too as the bulk bubble persists: With the two year at 1.89bps it is now tilting towards two rates hikes through 2018 now. More selling
Goodness he’s moving fast to do nothing today, fresh from the AFR: Prime Minster Malcolm Turnbull told Melbourne radio 3AW “we haven’t got any plan to review the policy we took to the election”. He insisted housing affordability was “overwhelmingly a question of supply” and that was the area in which the Commonwealth wanted to work with the
By Leith van Onselen Property investors continue to pull back in New Zealand, with the latest data from the Reserve Bank of New Zealand (RBNZ) showing that Auckland investors have reduced their share of mortgages to 40% in October – a sharp moderation from the 48% peak share recorded in June 2016: The slowing in
By Leith van Onselen Let’s take a quick walk down memory lane. In 2005, Malcolm Turnbull spoke out against negative gearing, labelling it and the capital gains tax (CGT) discount a “sheltering tax haven” and “tax avoidance”, and arguing that it is “skewing national investment away from wealth-creating pursuits, towards housing”. In a similar vein, Scott
From the ABC: Having just spent $200 billion over the best part of a decade to become the world’s biggest exporter of LNG, Australia is now looking down the barrel of having to import gas for domestic users. In a 21st century variant of “selling coals to Newcastle”, energy supplier AGL has flagged it may
From The Guardian: The federal government’s Direct Action carbon reduction policy appears to be running out of steam, with participation from industry dropping, the cost of the program rising and the budget for emissions reduction nearly exhausted. The Clean Energy Regulator announced on Thursday it would pay a further $367m to polluting industries, in return
By Chris Becker With the Americans gorging themselves on Turkey the day before they gorge on useless consumer crap, markets were buoyant, with the USD surging higher once more while peripheral stock markets retreated. European stocks lifted slightly, still waiting to here any clarification on ECB stimulus while industrial metals including copper continue to be
By Leith van Onselen New research has been released showing that Australia’s major cities are benefiting the rich more than the poor and are becoming breeding grounds for inequality in the process. From 9News: Lead researcher Somwrita Sarkar said the findings suggest cities like Sydney and Melbourne have a disproportionate accumulation of the highest income
From Banking Day: The outline of terms of reference for any royal commission into banking turned up in the dissenting report of Labor members of the House of Representatives Standing Committee on Economics’ review of the major banks’ performance. They include: how widespread instances of illegal and unethical behaviour are within Australia’s financial services industry;
Soc Gen’s Kit Jukes sees a higher USD: A strongish durable goods orders release, and a perception that easier fiscal policy is coming all over the world are cited as the catalysts for yesterday’s lurch higher in Treasury yields, but the underlying cause is that after 10year yields halved between the end of 2013 and
By Leith van Onselen In the lead-up to the Federal Election, Prime Minister Malcolm Turnbull scapegoated Australia’s building unions, promising to crack down on union corruption as a way of improving housing affordability: “We’re paying up to 30 per cent more for hospitals, schools and roads. Even housing affordability is affected because of the high
By Leith van Onselen In the week ended 24 November 2016, the CoreLogic 5-city daily dwelling price index, which covers the five major capital city markets, fell by 0.46%: Values fell in three major capitals and rose in two: Since the beginning of the month, home values have risen by 0.17% with all major capitals
Iron ore charts for November 24, 2016: Tianjin spot rose 2.7% to $76.90. Paper rose again overnight but is now clearly outpacing physical suggesting the rally is in trouble again. Coking coal futures are stalled. Thermal bounced. Steel is struggling and mill margins are right on new lows. In short, the rally looks tired and
Global Macro / Markets / Investing: You may be higher up the global wealth pyramid than you think – The Economist Treasury Yields Surge to Sixteen-Month High on Economic Data – Bloomberg ’Extraordinarily hot’ Arctic temperatures alarm scientists – The Guardian Sea ice reaches a new low – The Economist Americas: Trump to Accept Inauguration Funds From Corporations and
by Chris Becker Its another green green day in Asian equity markets as the USD continues to surge alongside commodities, except of course, gold. The Shanghai Composite is having another breather today, up a few points after lunch at 3243 points but still on its way to my target at 3400. The Hang Seng is however falling on
By Martin North, cross-posted from the Digital Finance Analytics Blog: The BIS has released their latest dataset on long term residential price trends. Australia figures near the top, ahead of NZ, US and UK, but behind Norway and Sweden. But for those convinced prices can only go up, look at Japan (lower now than in
