Unconventional Economist

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Australia: Land of the lie

Cross-posted from The Idiot Tax: If you want to a grand spectacle of over-regulation, under-regulation and bald faced lies told to a populace on a daily basis, come to Australia. You can marvel as the peeps you meet bend over and take it, or just open wide and swallow with the meekest of reactions. Humorous,

44

Why Syd/Melb housing is highly overvalued

By Leith van Onselen The AFR’s Chris Joye has posted an excellent article this afternoon effectively debunking the RBA’s Dr Peter Tulip, who earlier this month ridiculously claimed that Australian housing was 30% undervalued. In the article, Joye reviews new housing valuation analysis produced by Dr Craig Shepherd, an economist with the $10 billion fund

4

Investor lending sucks finance from businesses

By Leith van Onselen The Reserve Bank of Australia (RBA) today released its private sector credit aggregates data for the month of June: A chart showing the long-run breakdown in the components is provided below: Personal credit growth (0.1% MoM; -0.2% QoQ; 0.4% YoY) remains in the gutter, whereas business credit growth (0.0% MoM; 0.3%

8

BT Financial Group chief urges super reform

By Leith van Onselen BT Financial Group chief, Brad Cooper, has entered the superannuation debate, amongst other things calling for retirees to start paying income tax on annual superannuation earnings of more than $150,000. From The AFR: Mr Cooper will on Friday call on the Abbott government to restore the Low Income Superannuation Contribution it

13

ASIC flags crackdown on investor mortgage lending

By Leith van Onselen The noose is tightening further around property investors, with the Australian Securities and Investments Commission (ASIC) flagging that it will tighten lending standards on investor mortgage lenders. From The Australian: ASIC chairman Greg Medcraft… [said a] probe into the underwriting standards of a sample of 11 financial institutions had uncovered unacceptable

11

TPP negotiations come down to the wire

By Leith van Onselen With final negotiations for the Trans-Pacific Partnership (TPP) trade agreement taking place in Hawaii this week, and scheduled to conclude on Friday, there are a bunch of thorny issues still yet to be agreed on. As reported in The AFR, the US is holding-out on granting increased access to its dairy

32

David Uren butchers the population ponzi

By Leith van Onselen The Australian’s David Uren wrote another one-eyed article yesterday in support of high immigration, in which he espoused a bunch of so-called economic positives without giving due regard to the negative consequences: During Howard’s second and third terms, he oversaw a huge expansion of Australia’s migration program based on permanent and

1

Links 31 July 2015

Global Macro / Markets / Investing: Banks Pitch Swaps as Alternative to Buying Stock – Wall Street Journal Bill Gross Investment Outlook: Say A Little Prayer – exct.net 10 Reasons Barry Ritholtz Is Wrong About Gold – Reuters Shell to axe 6,500 jobs and cut spending to cope with lower oil prices – Reuters Roubini:

33

Buffett rule a proxy for real tax reform

Cross-posted from The Conversation: In 2011 investment guru and billionaire Warren Buffett wrote an opinion piece revealing he pays a lower rate of federal tax than most of the employees in his office. Although other commentators disputed this as a point of fact, the moral principle was set out clearly: tax breaks are available for

1

Import, export prices signal another terms-of-trade hit

By Leith van Onselen The Australian Bureau of Statistics (ABS) released export and import prices for the June quarter, which portends another fall in Australia’s terms-of-trade when the national accounts are released in early October. According to the ABS, export prices fell 4.4% in the June quarter and were down by 8.9% over the year.

19

Dwelling approvals signal end to construction boom

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of June. At the national level, the number of dwelling approvals fell by a seasonally adjusted 8.2% to 17,868. The overall fall was driven by the volatile unit and apartment segment, which slumped by 20.4% in June.

83

Chinese “frustrated” at foreign owners debate

By Leith van Onselen Wayne Tseng, founder of the Chinese Chamber of Property Investors, which represents Chinese property investors – both local and foreign – has raised concern at the blame being heaped upon Chinese investors for inflating property values and pricing-out locals. From The Herald-Sun: Mr Tseng said members of the community felt “frustrated”

19

Nationals plan revolt over TPP

By Leith van Onselen The National Party has stepped up its threats over the Trans-Pacific Partnership (TPP) trade deal, claiming that five of its members will cross the floor and vote against the deal if substantial sugar access is not granted to Australian sugar can growers. From The Australian: Queensland “sugar-belt” MPs George Christensen, Matthew

31

Coalition mulls limits to SMSF property leverage

By Leith van Onselen Earlier this month, The AFR  reported that Australian self-managed superannuation funds (SMSFs) are piling into Australian property, with investment up by 11% in the past year and by nearly 60% since 2011: The big increase in property investment by SMSFs is highlighted by the Australian Securities and Investments Commission in its

1

Links 30 July 2015

Global Macro / Markets / Investing: Nobody Knows How Much Bonds Cost – Bloomberg View What No One Ever Says About Corporate Bond Market Liquidity – Bloomberg Gold Is Only Going to Get Worse – Bloomberg Investors need to consider that gold may fall to $350 an ounce – MarketWatch Pick a Valid Strategy, Stick

6

HIA: Dwelling construction has peaked

By Leith van Onselen Fresh from the Housing Industry Association (HIA) comes new forecasts predicting that dwelling construction will peak this calendar year: “It is likely that new dwelling commencements peaked at a record level of 215,000 in the financial year just passed, and indeed the risk is for this apex to be even higher,”

16

Australia-US in sugar fight over TPP

By Leith van Onselen As the Trans-Pacific Partnership (TPP) trade deal reaches its final stages of negotiation in Hawaii, US sugar growers have urged the government to rule-out further opening of the US market to sugar imports: The American Sugar Alliance’s Don Phillips said sugar will be on the agenda, but the ASA will argue

47

AMP slaps ban on investor mortgages

By Leith van Onselen The vice continues to tighten around property investors, this time from AMP: One of Australia’s largest second-tier lenders is suspending new property investor loan approvals until later this year to comply with the bank regulator’s limits. AMP Bank released a statement today saying it would not be accepting new, or assessing