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MB Half-Year Report: Can ScoMo’s miracle save housing and the economy?

In MB’s 2018 Christmas special report, entitled “The Great Australian Housing Crash”, we anticipated a “strong probability” of a housing “crash” for Sydney and Melbourne, loosely defined as a peak-to-trough decline in values equal to or greater than 20%. However, we noted that this outcome would “hinge on Labor following through with its commitment to

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What are auction clearance rates telling us?

Via New Daily: The property industry is pointing to high auction clearance rates as evidence of a strong post-election recovery, but experienced analysts say the latest figures only tell half the story. Last week recorded the highest final clearance rate (61.8 per cent) since May last year, prompting those with skin in the game to

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Is iron ore signal or bubble?

The FT has an interesting debate on it: The price of iron ore has surged 60 per cent to above $115 a tonne so far this year, according to S&P Global Platts…But it also runs the risk of attracting fresh supply and bringing this year’s rally to an abrupt end. “The market is telling us

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Dominos back into the oven for wage theft

Back into the oven for the pizza giant, via the Herald Sun: Pizza giant Domino’s will on Tuesday be hit with a class action by workers who claim to have been underpaid for almost five years. The class action is being brought on behalf of delivery drivers and in-store workers employed across Domino’s franchise network.

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Choice calls for Health Star Ratings overhaul

Over recent years, I have called for an overhaul of Australia’s dietary guidelines, including Australia’s Health Star Rating System, which has too often ignored the prevalence of sugar while demonising natural saturated fats. I have also criticised Australian dieticians’ staunch defence of existing failed dietary guidelines that promote a high carbohydrate / low fat diet.

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Blundell-Wignall: Houses and holes are done

Not this Houses and Holes, who is flourishing. The houses and holes economy is cooked, says Adrian Blundell-Wignall, former director of the OECD, an adjunct professor at Sydney University and author of Globalisation and Finance at the Crossroads, via the AFR: “A plan” is not about government policy overreach exposed as flawed in the 1970s. A greater

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Should we run infrastructure like the RBA?

So says the RBA: Dr Lowe also said major infrastructure funding should be run like monetary policy – at arm’s length from the government – so that voters trust it is fit for purpose. “If we don’t get it right then the public doesn’t trust the politicians,” he said at the Crawford leadership forum in Canberra

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Late payments are costing the economy billions

Andrew Charlton from AlphaBeta has released a new report examining the cost of late payments to Australian businesses and the wider economy. The key findings are as follows: There’s plenty of evidence that late payments hurt cashflow, employment and wages for small businesses internationally. But there has been little data to truly quantify these costs

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In Iran war, Straya has 23 days to lights out

This is the amusing joke, the idiot cousin if you will, that every Australian strategic analyst overlooks red faced, via Peter Hartcher: The leadership in Tehran repeatedly has said that if Iran is not allowed to export oil through the Persian Gulf, no one will. “Either everyone will export, or no one,” as Supreme Leader

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“Generational injustice” is no myth

The Australian’s Judith Sloan has penned an article today attacking claims of “generational injustice”: Intergenerational injustice is a myth… what do we mean by intergenerational injustice? The Grattan view is that people on the same income should be taxed in exactly the same way irrespective of their age. It doesn’t matter to the researchers that

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Coalition to scrap “immoral” 12% compulsory super increase

The Assistant Minister for Superannuation, Janet Hume, has given the strongest indication yet that the Coalition will scrap the legislated increase in the superannuation guarantee (compulsory super) to 12%, as well as make superannuation contributions voluntary for those aged under 25. From The SMH: Jane Hume urged warring industry and retail funds to “lay down

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Housing bust drives new car sales off cliff

Australia’s housing bust has driven the biggest fall in new car sales in nine years, according to the Federal Chamber of Automotive Industries (FCAI): Sales of new cars in Australia have fallen for 14 consecutive months… “You’ve got the election, you’ve had a negative impact on lending as a result of the royal commission and you’ve

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NSW Government too late the hero on highrise slum towers

Things have gone from bad to worse for residents of Sydney’s Mascot Tower. After the building was evacuated two weekends ago amid serious structural cracking, engineers have reported that the building is “moving in downward motion”. From SBS News: Mascot Towers’ coordinating engineer has now identified a new issue along the northern and eastern boundaries

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More on Aussie QE

From Westpac this time: • As mentioned in our front page essay, last week’s RBA Board Minutes did nothing to silence the increasing market focus on the potential for the RBA to venture into more unconditional forms of monetary policy, such as quantitative easing. That is despite RBA Governor Lowe stating later in the week

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Daily iron ore price update (steel save)

Iron spot prices eased back. Paper fell harder. Steel jumped higher. Reuters explains: China’s top steel city of Tangshan has imposed a new set of output restrictions on its iron and steel firms because of persistently high industrial gas pollution levels, the local government-backed Tangshan Labour Daily reported on Monday. Two units of steel giant

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Macro Morning

By Chris Becker  Risk sentiment in overnight markets remained cautious, with interest rates falling again, pulling the USD down while lifting gold to another new record high. With no new economic events to go on or news catalysts, it was a relatively dull session! Looking at yesterday’s action in Asia first, with Chinese share markets almost unchanged

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Australian dollar roars into the G20

DXY was soft again last night. EUR up and CNY down: The Australian dollar lifted against all DMs: And EMs: Gold broke out of its giant, bullish ascending triangle: Oil fell: Big miners rose: With metals: EM stocks were stalled: Junk stable: Treasuries were bid: And bunds: And local bonds: Stocks held on: Westpac has

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Australia’s skilled migrant visa system rorted

For well over a decade, Australia’s business lobby has argued that a strong intake of skilled migrants is required to overcome perceived chronic shortages in the labour market. However, the data has never supported this assertion. First, the Productivity Commission’s (PC) 2016 Migrant Intake into Australia report showed that while the majority (two-thirds) of Australia’s

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Links 25 June 2019

Global Macro / Markets / Investing How single family zoning makes cities financially fragile – Strong Towns Oil prices climb as Middle East tensions simmer – Reuters Solar Energy Has Record Start to 2019 – Fool Artificial intelligence and the threat of diminishing returns – Forbes Americas: How single family zoning makes cities financially fragile

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Macro Afternoon

Asian share markets are literally treading water while currencies are the only movers as traders try to find their feet at the start of the trading week. There was a  fly in the ointment for Aussie short sellers – the RBA – as Governor Lowe’s speech put a little boost under the beleaguered currency. Chinese share

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MB Fund seminar in Canberra tonight!

As we round out 2 years in the saddle, we are happy to announce round three of the MB Fund seminar series. This year’s presentation is titled Global Shocker! It will examine the mushrooming threats in Australia’s external environment including Cold War 2.0 and trade wars, Brexit, a slowing China and US recession, as well as their impacts

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Moody’s: No house price recovery until 2021

Via Moody’s: Second-Quarter 2019 Housing Forecast Report The May CoreLogic Hedonic Home Value Index results show the national housing market continuing its correction, led by Sydney and Melbourne. The national index for home values has fallen for almost two years. The decline has been sharper in house values compared with apartment values; house values have

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Labor to support stages 1&2 of tax cuts

Via Albo: What we have determined this morning to do is to propose a negotiating position to the Government which would bring forward tax cuts faster for those who need it and importantly those who will spend it to stimulate demand in the economy.” We have determined the following position: Stage one – of course,