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Macro Afternoon

A mixed start to the week here in Asia as many stock markets and other trading venues are closed for holidays, with risk focused more on the Brexit brouhaha. The Shanghai Composite closed today for a holiday. The Hang Seng Index has gapped down significatnly, off nearly 2% to 27473 points, reversing most of last week’s build up

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UBS bear slashes mortgage, house price outlook

They just keep getting more bearish at UBS: New comprehensive credit reporting rules from mid-next year could reduce borrowing capacity by about $100,000 for many households, as credit card limits and other debts are taken into account, the bank said. …When negative gearing arrangements were limited in 1985 and a capital-gains tax was introduced, the

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Trump plans “administration wide broadside” on China

Via Axios: The Trump administration is planning to launch a major, “administration-wide,” broadside against China, according to two sources briefed on the sensitive internal discussions. These sources, who weren’t authorized to discuss the plans with the media, told me the effort is expected to launch in the next few weeks. The details: The broadside against China

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Grattan: Labor’s womens super policy more symbolism than substance

Cross-posted from The Conversation: When it comes to the gender gap in retirement incomes, symbolism appears to matter more than actually achieving something. Labor’s plan to add super contributions to government-funded parental leave was heralded by Opposition Leader Bill Shorten this week as having a “big impact down the track”. Our analysis shows it would

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70% of pollies fastened to corporate teat

Via the ABC: In the past three years, nearly 70 per cent of federal ministers and shadow ministers have accepted corporate hospitality, which can be anything from a lavish lunch, to tickets to the AFL grand final, to airline lounge memberships. More than a quarter of senior and assistant ministers took jobs with special interests

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Kohler contracts Trump derangement syndrome

Via Alan Kohler today: An alliance of the American military establishment and Republican trade hawks wants to break up the connections that have become embedded between US companies and China, as part of an attempt to prevent China gaining economic, geopolitical and technological predominance. …Beijing is digging in, settling in for a long siege because

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“My business banker can’t even read a balance sheet”

Via the AFR: Small business says it is facing a credit crunch and is blaming the royal commission into financial services for causing nervous banks to slow lending to the self-employed. The moderation in lending to small firms in recent months appears to be an unintended consequence of anecdotal evidence of questionable bank lending practices

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Property investors to halve with negative gearing reform

Excellent news this, from the Property Investment Professionals of Australia survey: Australian property investors are shrugging off finance issues, concerns about taxation policy changes, and the market slowdown in Sydney and Melbourne with a growing majority believing this year is a better time to invest than last, the 2018 Property Investment Professionals of Australia (PIPA)

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Is build-to-rent already dead?

By Leith van Onselen The Morrison Government has been accused of stifling the development of a “build-to-rent” sector in Australia. This follows the passage of laws last week that would ban managed investment trusts from acquiring residential property unless the property is targeted at low-income consumers. This law, in turn, will reportedly prevent apartments from

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ABC head boned

Via Domainfax: ABC managing director Michelle Guthrie has been sacked by the board after just two years and four months in the job. “The decision follows discussions over several months that concluded when directors resolved that it was not in the best interests of the ABC for Ms Guthrie to continue to lead the organisation,”

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Alexander Downer on how to lose friends and disinterest people

By Leith van Onselen With the satisfaction with Australia’s political system plunging to all-time lows, and distrust growing and voters flocking to minor parties: Former Foreign Affairs Minister, Alexander Downer, is playing ‘blame the victim’. From The AFR: There’s an old political slogan you might remember … the public get the politicians they deserve. Through

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Pascometer redlines on negative gearing

By Leith van Onselen After spending years denying that Australian housing was expensive or that there was a housing bubble, Michael Pascoe has joined the property rent-seekers in calling for Labor to abandon its negative gearing and capital gains tax (CGT) reforms until after the market is stable. From The New Daily: What could be

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Berejiklian sinks

Leith noted earlier today another new poll showing the collapse of community support for mass immigration. Also today we get the bell tolling for the NSW government, at Domainfax: Just weeks after an embarrassing loss for the Liberals in the Wagga Wagga byelection, and as ministers engage in open warfare over a bitter preselection battle, the

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Wealth inequality in Australia is getting worse

By Leith van Onselen Late last month, the Productivity Commission released a research report examining inequality in Australia, which found that income inequality has not materially worsened in recent decades, but wealth inequality has. Now, the first edition of the Roy Morgan Wealth Report has been released, which shows that net wealth has grown strongly

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Macro Morning (Trading Week)

By Chris Becker  The end of quarter re balancing on very bullish stock markets was overshadowed on Friday night by increased volatility on currencies, with the chance of an “unfriendly” Brexit sending Pound Sterling sharply lower. The other undollars also retraced from their recent rally as USD strength came to the fore with renewed vigor

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Community support for mass immigration collapses

By Leith van Onselen The mass immigration ‘Big Australia’ policy has clearly lost the community’s support, with the five most recent national opinion polls all showing majority support for lowering immigration: Australian Population Research Institute: 54% want lower immigration; Newspoll: 56% want lower immigration; Essential: 54% believe Australia’s population is growing too fast and 64% believe

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NSW stamp duty dives as transactions and prices tumble

By Leith van Onselen The NSW Office of State Revenue has updated its stamp duty data for August 2018, which reveals that residential stamp duty receipts are plummeting following a monumental five-year boom: As shown above, annual NSW residential stamp duty receipts ($6,616 billion) in August retraced further from October’s all-time high of $7.516 billion;

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Auction clearances weak again, with Melbourne wilting

CoreLogic released its auction report yesterday, which reported another very weak wekend of auctions with the preliminary national auction clearance rate at just 55.5% versus 55.0% last weekend (later revised down to 51.8%). The preliminary clearance rate was also way below the 66.2% recorded in the same weekend of last year: Auction volumes nationally were

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Links 24 September 2018

Global Macro / Markets / Investing: How the Myth of the ’Robber Barons’ Began—and Why It Persists – FEE A radical idea for reducing inequality deserves more attention – The Economist Gold Is Cheap. Inflation Is Coming. You Do the Math – Barron’s Do Digital Platforms Reduce Moral Hazard? The Case of Taxis and Uber

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Weekend Reading: 22-23 September 2018

Global Macro / Markets / Investing: Former Google CEO predicts the internet will split in two by 2028 – CNBC World Poverty Falls Below 750 Million, Report Says – WSJ Why This VC Is Pouring Millions Into Startups Building ‘a Sci-Fi Future’ – Fortune The Prime Effect: How Amazon’s 2-Day Shipping Is Disrupting Retail –

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Macro Afternoon

As we head into the end of the week, the bulls remain fully in charge on global stock markets with Asian bourses looking set to end on a good note across the board. Not much data today, although some indication that the BOJ is unsure it will hit it’s inflation mark sent the Yen lower,