By Leith van Onselen The Department of Education, Employment and Workplace Relations (DEEWR) has released its Internet Job Vacancies Index for the month of May, which registered a 0.2% seasonally adjusted increase in the number of job vacancies, but a 0.5% monthly decline in trend terms. In the year to May 2013, internet job vacancies have fallen by 22.8% in seasonally adjusted terms and by 22.0% in trend terms (see next table). As shown by the next chart, the trend in job ads is clearly down, with the number of ads currently well below GFC lows: Looking at the internals, you can...

By Leith van Onselen The Queensland Department of Environment and Resource Management (DERM) has released data on housing transfers and mortgage lodgements for the month of May. According to DERM, the number of housing transfers rose by 8.1% in May, whereas the number of mortgage lodgements increased by 8.0% over the month (see next chart). On a year-on-year basis, transfers rose by 9.2% in May, whereas mortgage transfers increased by 7.0% (see next chart). You can see that Queensland transfers and mortgage lodgements had been in an up-trend since late-2011, but have stalled...

  By Leith van Onselen Over the weekend, the Telegraph published a stark warning from Fitch Ratings agency over China’s credit bubble, which it described as “unprecended in modern world history”. The warning follows an explosion of outstanding credit in China from $9 trillion to $23 trillion since the Lehman crisis, dwarfing the experience of the US in the lead-up to the sub-prime credit crisis, or Japan before the Nikkei bubble burst in 1990. Fitch also claimed that China’s shadow banking system is out of control and under mounting stress as borrowers struggle to roll over...

By Leith van Onselen Yesterday's New South Wales State Budget revealed some positive news regarding the success of the recently re-vamped First Home Buyers' Grant (FHOG), which last October removed the $7,000 grant on pre-existing dwellings to an expanded $15,000 grant on newly constructed dwellings. According to the Budget Papers, the change to the FHOG has led to a large increase in first home buyer (FHB) demand for newly constructed dwellings, with around 40% of FHBs purchasing new dwellings currently, versus roughly 15% prior to the changes: In the 2012-13 Budget, the Government more...

From the Conversation comes the above video interview with Dr Ken Henry, former Treasury Secretary and the Prime Minister’s Special Adviser, discussing Australia's economic future as China's economy slows and rebalances, and the mining boom unwinds. In the video, Dr Henry tells SBS business reporter Ricardo Gonsalves that Australia can reposition itself as a quality supplier of high grade goods and services the growing Chinese middle class will increasingly desire – but only if critical microeconomic productivity reform is taken seriously. Full video transcript: Q: There seems to be a lot of...

Please find below former Reserve Bank of New Zealand advisor and multiple CEO, Terry “Macca” McFadgen’s, latest ‘Maccanomics’ article, which tackles amongst other things the stiff headwinds facaing the Japanese economy, Abenomics and its likelihood of success, and what it all means for Australia, New Zealand, and the global economy. Enjoy! We need to talk about Japan because it is world’s third largest economy and it is going broke. Something major has to change to avoid that outcome. Abenomics may or may not be the game changer- we will come to that shortly-but in a world firing on...

Global Macro/Markets: 7 Important Examples of How Markets Can Fail - The Fiscal Times; Economist's view Fed likely to signal tapering move - Financial Times North America: Obama Says Bernanke Fed Term Lasting ‘Longer Than He Wanted’ - Bloomberg The Return of the 10 Percent Down Payment - zillowblog.com The Three Reasons Canada Is In Big Trouble - Business Insider California home prices soar to new highs - HousingWire Europe: Opening remarks at the session Rethinking the Limitations of Monetary Policy - European Union How the Revival of Postwar Germany Began - New...

By Leith van Onselen Holden has today asked its workforce to accept a $200 a week wage cut and review their conditions in a bid to improve competitiveness at its Elizabeth plant and prevent its Australian assembly operations from closing down. From the AFR: Holden is asking its manufacturing workforce to take a $200 a week pay cut to soften what managing director Mike Devereux describes as unprecedented economic challenges for the nation’s car makers. Mr Devereux told reporters on Tuesday afternoon that the company would work together with employees and the union to achieve...

By Leith van Onselen The New South Wales Government this afternoon released the State Budget for 2013-14, which revealed a steady improvemnent in Budget finances, with a deficit of $329 million expected in 2013-14 (compared with previous forecast of $423 million), followed by surplus of $829 million in 2014-15 (down from $1.3 billion forecast). The improved Budget outcome has been achieved primarily on the back of a big forecast pick-up in property tax receipts on the back of the strengthening housing market. Stamp duty receipts on residential transfers are expected to jump by 17% this...

By Leith van Onselen The Bureau of Resources and Energy Economics (BREE) has released its 2013 China Review, which provides a detailed examination of challenges and opportunities facing the Chinese economy, and the attendant risks and opportunities facing Australian exporters as the Chinese economy shifts away from investment-led growth towards consumption-based growth. At over 140 pages in length, the BREE report is incredibly long and I have not had the opportunity to read it in detail. Nevertheless, below are some extracts that I found interesting. Regarding the growing structural...

By Leith van Onselen News has broken that General Motors Holden has announced a staff meeting today at Holden's Elizabeth plant, where it is rumoured the company may seek to cut pay or axe jobs: Employees at Holden's Elizabeth plant have been called to a meeting at 1-30 this afternoon. The carmaker remains tightlipped about what they'll be told but says CEO Mike Deveraux will address staff and then the media. There has been media speculation this week about possible pay cuts for workers There has been increasing concern about the future of the cargiant in the wake of Ford's closure...

By Leith van Onselen SQM Research has today released rental vacancy data for the month of May, which revealed an ongoing increase in residential rental vacancies, with the vacancy rate increasing to 2.1% nationally over the month, up from 2.0% in April and 1.8% in May 2012 (see next table). From the Media Release: The majority of capital cities either experienced modest rises, or remained the same during May, with Darwin being the only city to experience a decline – falling from 1.1% to 1.0% month on month. This result reflects a rental market that is continuing to loosen, albeit...

By Leith van Onselen The Telegraph published an interesting article recently on rationing policies implemented by the Venezuelan Government, which is causing shortages in a variety of basic goods like toilet paper: First milk, butter, coffee and cornmeal ran short. Now Venezuela is running out of the most basic of necessities – toilet paper... One supermarket visited by The Associated Press in the capital on Wednesday was out of toilet paper. Another had just received a fresh batch, and it quickly filled up with shoppers as the word spread. "I've been looking for it for two weeks,"...

By Leith van Onselen Please find below RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 16 June 2013. This week’s report includes: Latest weekly dwelling value results; Latest median house & unit prices; Average time on market & vendor discounts; Auction results & clearance rates; Number of for sale listings; Mortgage market activity; and New listings activity. Full report below. Weekly RP Data Property Wrap (WE 16 June...

Global Macro/Markets: Economists Blame Fed for Higher Bond Yields - Wall Street Journal Many economists see Fed cutting bond buying by fall - USA Today Finance sector sees lowest risk of turmoil since 2008 - central bank survey - Reuters North America: What the bond market is telling the Fed - Financial Times Hungarian Central Banker Warns on Fed Moves - Wall Street Journal Europe: German wage rises, exports offer hope for euro zone - Reuters Investors Seek Shelter in the Euro - Wall Street Journal Bond market nerves threaten to end Europe’s calm - Financial...

By Leith van Onselen Above is a video interview that screened on Switzer TV on Friday with Roger Montgomery, head of Montgomery Investment Management, discussing the risks to the Australian economy as the mining investment boom unwinds. Montgomery states that mining services is "cactus" and believes that the decline in mining capital expenditures are highly unlikely to be offset by rising non-mining activity, raising the real risk that Australia could slide into recession. Nothing we don't already know. But nice to see such risks aired on a (generally bullish) show like...

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released new motor vehicle sales for the month of May, which registered no material movement over the month in seasonally-adjusted terms and only a 0.2% increase over the year. The result followed four consecutive monthly falls in sales (see next table). Sales rose in New South Wales, Queensland, Tasmania, Northern Territory, and the ACT, but fell in Victoria, Western Australia, and South Australia. Car sales remain in a weakening uptrend, however, driven by strong growth in sales of Sports Utility Vehicles or SUVs...

  By Leith van Onselen As noted earlier today by Houses & Holes, Fitch Ratings agency over the weekend issued one of the starkest warnings yet over China's credit bubble, which it described as "unprecended in modern world history". The warning follows an explosion of outstanding credit from $9 trillion to $23 trillion since the Lehman crisis, dwarfing the experience of the US in the lead-up to the sub-prime credit crisis, or Japan before the Nikkei bubble burst in 1990. Fitch also claimed that China's shadow banking system is out of control and under mounting stress as borrowers...

By Leith van Onselen Auction clearance rates in Australia’s two biggest markets – Sydney and Melbourne – bounced back over the weekend. In Australia’s biggest auction market – Melbourne – clearances rose to 70% on 740 auctions reported to the REIV. However, with 39 auctions listed as "no result", the final clearance rate is likely to be downgraded by a few percent as late results come in (see below table). Despite the likelihood that the final auction clearance rate will be revised downwards, the weekend's result was an improvement on the 66% provisional clearance rate...

By Leith van Onselen The United Nations (UN) has released a new report projecting that the world's population - currently around 7.2 billion - will increase by 1 billion over the next 12 years, will reach 9.6 billion by 2050, and could reach nearly 11 billion by 2100. The new projection is around 800 million (8%) larger than the previous projection of 10.1 billion by 2100, issued by the UN in 2011. The projected rise is mostly due to fertility in Africa, where the UN had expected birth rates to decline more quickly than they have. The population there is now expected to hit 4.2 billion by...

By Leith van Onselen Over the weekend, the New South Wales Government revealed that it would extend the $15,000 first home owners' grant (FHOG) on newly constructed dwellings until 2016 amid signs of life in the construction sector. From Property Observer:   The first home owner grant was due to be reduced to $10,000 in six months time on 1 January, 2014. It now has another two years at $15,000 during which developers and home builders will pursue the recently hesitant first home buyer constituency. "We're saying to every first home owner across the state, if you are thinking of...

Global Macro/Markets: Bid to relaunch synthetic CDO unravels - Financial Times The Great Rotation has not worked out as planned - Sober Look For the world economy, a slower, more stable growth - Washington Post North America: Wall Street is winning the long war against post-crash regulation - The Guardian Obama needs to embrace the promise of the US city - Financial Times Fears of Housing Bubble Full Full of Air - Wall Street Journal Fracking Is Already Straining U.S. Water Supplies - ThinkProgress Europe: Bond market nerves threaten to end Europe’s calm - Financial...

By Leith van Onselen Above is an interesting video report shown on CNBC today, looking at whether China's massive apartment building spree is sustainable. While you are watching it, imagine the millions of tonnes of Australian iron ore used in the construction (see next chart) and then imagine what would happen if/when construction slows, as it surely...

By Leith van Onselen Another mining capex project has officially bitten the dust today, with Oakajee Port and Rail (OPR) officially announcing that it has suspended the $6 billion Oakajee port project in Western Australia after proponent Mitsubishi announced a "slow down" of work in November. From the AFR: OPR said the reasons it slowed down work at Oakajee in November - a difficult economic environment and lack of progress with talks for joint venture partners - had worsened. "This will unfortunately require further reduction in staff numbers," OPR said... "Progressing partnership...