Weekend Links 19-20 January, 2019

Short man with two dogs, Linda Marrinon, 1990, Art Gallery of NSW   Americas Trump Pulls U.S. Delegation Out of Davos Forum, Citing Shutdown – Bloomberg Shutdown clouds outlook for consumer-driven U.S. economic growth – Reuters Chinese ambassador Lu Shaye warns ‘back-stabbing’ Canada to stop rallying allies in row over detainees – SCMP Trump Vows

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Macro Afternoon

Asian shares finish the week with a flourish, with green results across the board as optimism grows over a potential positive outcome to the trade talks between the US and China. USD remains firm against the Asian major pairs with both the Aussie and Kiwi retreating while gold also fell a few dollars per ounce.


Global clean energy investment falls in 2018

by Chris Becker While the headline looks bad at first glance, there’s still a lot of good news for renewable energy investors and energy consumers with the Bloomberg New Energy Finance annual report out this week. Global clean energy investment totaled $332.1 billion in 2018, down 8% on 2017; last year was the fifth in


Shorten doubles down on negative gearing reform

Great to see from Australia’s next Prime Minister: The federal government’s campaign against Labor’s proposed changes to the negative gearing tax break is aimed at distracting Australians from its own shortcomings, Opposition Leader Bill Shorten says. Mr Shorten says the government is trying to hide that the economy is not working in the interests of


Long-term migrant arrivals hit another all-time high

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released visitor arrivals and departures data for the month of November, which again posted turbo-charged net annual permanent and long-term arrivals. In the year to November 2018, there were 828,980 permanent and long-term arrivals into Australia – up 7% from November 2017 and an


Ray Dalio: capitalism isn’t working

by Chris Becker It’s always interesting to hear mega-capitalists complain about the very system that provides them opportunity to turn their talents into Scrooge McDuck size piles of cash. Furthermore, it’s usually the most successful that have the most liberal of views and Ray Dalio, head of hedge fund Bridgewater, has weighed in again. From CNBC:


Coalition doubles down on negative gearing rent lies

By Leith van Onselen Earlier this week, the Coalition announced plans to target 270,000 young renters in Australia’s 25 most marginal seats in the lead-up to the next election, believing that Labor’s plans to curb negative gearing could prove a vote winner for the federal government. In No surprise then to read that Capricornia MP,


Adelaide Uni dumbs down standards to chase foreign student dollar

By Leith van Onselen Adelaide University’s vice chancellor, Peter Rathjen, says he is aggressively targeting growth in foreign student numbers, vowing to grow international student numbers to more than 10,000 in 2019. From Adelaide Now: Under vice-chancellor Peter Rathjen, Adelaide University says it is aggressively targeting growth, mainly to be a more “global” institution. Adelaide projects


Sydney landlords get desperate

By Leith van Onselen Earlier this week, SQM Research released its December rental vacancy and asking rent series, which showed Sydney’s rental vacancy rate had rocketed to a series high 3.6%, with nearly 8,000 more rental properties on offer (25,177) than at the same time in 2017 (17,404): At the same time, Sydney asking rents


Australia needs a royal commission into high-rise construction

By Leith van Onselen The handwringing and panic about the build quality of Australia’s high-rise buildings continues with the men behind the company BlockAid claiming that building faults are widespread and at risk of cracking or collapsing in a scenario manner to Sydney’s 34-storey Opal Tower. From The Newcastle Herald: Craig Thorley and Chris Rafferty believe


Property index points to Aussie recession

Cross-posted from Prosper Australia: Real estate cycle expert Bryan Kavanagh says turnover and price declines in Sydney and Melbourne during 2018 indicate an economic recession in the 2019-20 financial year. The 2018 “Kavanagh-Putland Index”, released today, shows the total value of Australian real estate sales to GDP.  Mr Kavanagh said the $50 billion pumped into


LVO demolishes compulsory super on Radio 2GB

Yesterday afternoon I gave an interview on Radio 2GB’s Drive program talking compulsory superannuation. The interview starts from around the 44 minute mark and runs for around 12 minutes. In particular, I rip into Labor’s, the union’s, and Paul Keating’s call to raise the rate of compulsory superannuation to 12% or 15%, arguing that it


CoreLogic weekly Australian house price update: more crash

By Leith van Onselen In the week ended 17 January 2019, the CoreLogic 5-city daily dwelling price index, which covers the five major capital city markets, tanked another 0.35%: Values fell across all major markets: The quarterly decline has steepened to 3.13%, with Sydney, Melbourne and Perth suffering heavy losses: Over the past 12 months, home


MB Fund Podcast – Bonds Away!

This week’s LIVE webinar – we explore the often overlooked world of BONDS. Join MB Funds’s Head of Investments Damien Klassen and Tim Fuller as we look at: – What are bonds and the different types available – How they should be classified and how to use them effectively – How bonds fit into a


Links 18 January 2019

Global Macro / Markets / Investing: It’s Official: Wall Street Topped $100 Billion in Profit – Bloomberg The Marijuana Billionaire Who Doesn’t Smoke Weed – Fortune BlackRock profit misses as investors opt out of expensive funds – Reuters Why do we bother with stock market forecasts? – Irish Times Cracks are opening in the global


Macro Afternoon

The rally in Asian shares slowed this afternoon as comments from the Chinese commerce industry on the global slowdown took risk well off the table. The Australian dollar cracked to a new daily low while Yen rallied on the risk off mood, affecting domestic Japanese shares. The Shanghai Composite is down over 0.4% going into the close,


US student debt hinders home ownership

by Chris Becker The US Federal Reserve as an interesting report out (unlike the US government, Trump can’t shutdown the Fed! on the impact of student debt on new homeowner rates in the US. Salient because the Coalition wants the education cake and to eat it too. Last year the Senate passed the HECS/HELP adjustments


Australian dollar poised to fall

by Chris Becker Last night the US Dollar index (DXY) was largely unchanged mainly due to the lack of any catalysts because of Trump’s shutdown. The much watched December US retail sales were postponed but both Aussie and Kiwi lost against King Dollar, down nearly 0.4% or so each. Midday in the Asian session, the


Investor mortgage crash deepens

By Leith van Onselen Today’s housing finance data for November, released by the Australian Bureau of Statistics (ABS), posted more falls in both owner-occupied and investor finance commitments. According to the ABS, the total number of owner-occupier finance commitments (excluding refinancings) fell by 0.6% in November in seasonally adjusted terms and has fallen 10.0% over


Gotti hits consumer panic button

By Leith van Onselen Amid the slump in consumer sentiment and the apparent tanking of retail sales over Christmas, Robert Gottliebsen (“Gotti”) has hit the panic button. From The Australian: In the years leading up to the second half of 2018 we went through a period where banks hosed money at people seeking a resident