High immigration has masked Australia’s economic decline

By Leith van Onselen Finally a journalist from The ABC has acknowledged the economic elephant in the room: that Australia’s so-called economic out-performance over the past decade or so has been driven, to a great extent, by its world-beating immigration program, which has not raised individual living standards: Australia has ridden 25 years of economic

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The great Chinese power exchange

The Economist had a chart of the day earlier this week highlighting the new ultra-high-voltage projects in China: The largest connector under construction, the Changji-Guquan link, will carry 12,000MW (half the average power use of Spain) over 3,400km, from Xinjiang, in the far north-west, to Anhui province in the east. This is a good illustration


Do-nothing Malcolm is failing badly on jobs

By Leith van Onselen When the Coalition was first elected in late-2013, Employment Minister, Eric Abetz, trumpeted that the Government would deliver a “powerhouse economy” that will produce one million jobs over five years and two million jobs over 10 years. Prime Minister Malcolm Turnbull has since remained silent on the jobs pledge but continues


Youth labour market continues to deteriorate

By Leith van Onselen Yesterday’s ABS labour force release for December revealed a further rapid deterioration in labour market conditions for those aged 15 to 24 years old. As the headline unemployment rate continued to rise, from 13.12% in November to 13.19%: Total employment growth for those aged 15-24 years of age also turned more


Links 20 January 2017

Global Macro / Markets / Investing: U.S. scientists officially declare 2016 the hottest year on record. That makes three in a row. – Washington Post Comparing 25- to 34-year-olds now with 25- to 34-year-olds in 1989 is super depressing – Business Insider Robos jumping into socially responsible investing space – Investment News Davos Elite Searches for Fixes to


Macro Afternoon

by Chris Becker Outside Japan, its much ado about nothing for stock markets in Asia, as a positive lead overnight has not turned into anything substantive on Chinese or Australian bourses. The return of a stronger USD has been temporary so far, with gold coming back a little alongside Aussie dollar, while the Yen remains


Moody’s: Rising house prices provides buffer for falling prices

From Moody’s Investors Services: Equity cushion will absorb losses if loans default: Rising housing prices have added an average of 14 percentage points of equity to the mortgage loans in the portfolio of Australian residential mortgage-backed securities (RMBS) that we rate. This “additional equity cushion” provides a buffer to absorb losses if mortgages default, which


As Trump elevates coal, 2016 records warmest year yet

Juxtaposition is a nice word. Just as the world gears up for a new oligarchy – two days before the US presidential inauguration – comes news from NASA that 2016 was the warmest year on record. From the source: Earth’s 2016 surface temperatures were the warmest since modern recordkeeping began in 1880, according to independent


Young mortgage slaves badly exposed to rising rates

Digital Finance Analytics’ (DFA) Martin North appeared on ABC News 24 yesterday presenting new DFA research, based on a survey of 26,000 households, assessing the sensitivity of Australian mortgage holders to rising interest rates: According to DFA, one-in-five home owners would find themselves in mortgage difficulty if mortgage rates rose by as little as 0.5%,


Unemployment rises in December

The headline unemployment rate for December has risen to 5.8% from an upwardly revised 5.7% From the ABS: SEASONALLY ADJUSTED ESTIMATES (MONTHLY CHANGE) Employment increased 13,500 to 11,985,900. Full-time employment increased 9,300 to 8,176,500 and part-time employment increased 4,200 to 3,809,500. Unemployment increased 14,700 to 741,100. The number of unemployed persons looking for full-time work


US stocks: only good for the short run

As a new golden American oligarchy begins in the next couple of days, it’s timely to note the huge rise in US stocks since the outcome of the election: And with promises of tremendous fiscal stimulus through increased defence spending and other pork barreling, not including corporate tax cuts and barriers to investment in non-renewable


Why Australia should go it alone on trade

By Leith van Onselen James Pearson, CEO of the Australian Chamber of Commerce and Industry (ACCI), has penned a timely contribution to the debate over trade, arguing that it would be better for Australia to opt for unilateral reforms in trade, industrial relations and competition policy, rather than relying on flawed free trade agreements (FTAs).


Retirement reforms boost labour participation

By Leith van Onselen For many years, the Australian Treasury spruiked its Three P’s framework for rising living standards. Under this framework, we were told that Australia must: 1) boost productivity; 2) raise workforce participation; and 3) increase the population via skilled migration, if the nation was to continue to enjoy rising living standards. Personally,


Why housing affordability is at all-time lows

By Philip Soos, co-founder of LF Economics: Interest rates might be low, but poor wage growth means a greater burden across the life of a mortgage. This is the real problem with housing affordability. Australia’s historically high and rising housing prices are widely debated and have prompted a number of government inquiries into housing affordability.


Perth landlords are hemorrhaging losses

By Leith van Onselen Perth landlords are in a world of pain, with the latest data revealing heavy rental losses in addition to falling prices. The latest quarterly rental data from the REIWA revealed that Perth’s vacancy rate had rocketed 6.6% in the September quarter, with house rents falling an incredible 15.5% since March 2015


Links 19 January 2017

Global Macro / Markets / Investing: Where The World’s Ten Most Active Sovereign Wealth Funds Invest In Tech – Cb Insights Risk, surprises and safe-haven currencies – VOX In Davos, Anthony Scaramucci Translates Trump Message to Global Elite – WSJ At Davos, IBM Chief Predicts Artificial Intelligence Won’t Be a Job Killer – WSJ The World’s Most Expensive Stocks


Macro Afternoon

by Chris Becker A more positive day for stock markets in Asia, led by Chinese shares which are finding needed support from official intervention and a much strong Yuan, including more PBOC market operations. This liquidity spilled over to other bourses – all save the ASX200 – as the fallout from the one-two punch of


Baby boomers begin to drain cash in the US

The WSJ has a piece out on the demographic effects of the baby boomers retiring: The largest generation in U.S. history has to start pulling its retirement money this year, kicking off a mandatory movement of cash that could total hundreds of billions in the coming decades. U.S. law requires anyone age 70 ½ or