Weekend Links 10-11 October 2015

Asia  In a first, Chinese hackers are arrested at the behest of the U.S. government  – WaPo Beijing and Hong Kong lose to Washington-led free-trade deal – SCMP Europe Germany, the eurozone’s economic engine, is sputtering as its biggest companies struggle – Financial Post Greece needs debt relief, significant extension of maturities: IMF – Reuters How Putin

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ASX at the close

Angus Nicholson for Chris Weston at IG markets. The Fed minutes released overnight seemed to cement investor expectations for the Fed to delay their first rate rise until 2016. As the probability of a December Fed rate hike fell to 38.8%, the USD weakened noticeably seeing renewed vigour breathed in currencies and commodities. There seems


Abbott was right to doubt Glenn Stevens

From the AFR’s Jacob Greber comes nice piece of RBA preening today: …More than a year ago, a visiting senior team from a major global investment bank was doing the rounds of Australia’s economic policy makers – including the Reserve Bank and Treasury, as well as Abbott’s office. What struck the visitors was how openly


Is litigation Australia’s future under the TPP?

Cross-posted from The Conversation: Australia and Canada have a great deal in common – a British colonial past; large and sparsely populated territories; and resource-intensive economies. Two other similarities also bear mentioning: the economies of both countries are dominated by US investors (27% of foreign investment in Australia and nearly half in Canada); and both


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