By Leith van Onselen A decade ago, Melbourne was gripped in drought. Water storages had fallen to below 30% and widespread water restrictions were in place across the city: Several years of strong rainfall followed and today Melbourne’s dam storages sit at a healthier 69%. However, today The ABC reports that Southern Australia is getting
By Leith van Onselen Heather Shearer, a research fellow at Griffith University’s Cities Research Centre, is the latest to jump on the Tiny Houses fad, claiming they represent a solution to Australia’s housing affordability crisis. From The Conversation: Tiny houses are now so popular that someone was charged with stealing one last week… My research
From yesterday’s AFR Innovation Summit comes Matt Barrie, CEO of Freelancer.com: Australia is doomed to become a third-world country unless its government starts “something like the Apollo program” to inspire its citizens into becoming a technology economy, Freelancer.com chief executive Matt Barrie told the AFR Innovation Summit 2017. “Australia is basically a property bubble floating
By Leith van Onselen Australia has again taken the silver medal for having the world’s second most indebted households according to the latest data from the Bank for International Settlements (BIS). The next table shows the ratios of household debt to GDP as at the March quarter of 2017. As you can see, Switzerland (129%)
He may not know how to fill in his parliamentary application form but he sure knows why it’s there. If there was ever any doubt about what this guy stands for then put it aside: Nick Xenophon will introduce legislation next year to require the prudential regulator to closely consider the impact of its actions
By Leith van Onselen In this week’s SQM Research rental vacancies report, managing director Louis Christopher noted how rental supply would remain under pressure despite the recent record high dwelling construction levels: “Overall the current rental market is a moderate landlord’s market. There is nothing in our numbers to suggest the market is about to
By Leith van Onselen Fairfax’s Ross Gittins has continued his great run of form, nicely summing-up how the older generations are screwing over the young: When they look at the economy that older generations are leaving for them, young Australians have a lot to be angry about… It is a bit rich for federal governments
DXY was soft last night as we await the Fed: The Aussie dollar was strong: Other EMs fell: Gold got a little lift out of the UN: Brent softened: Base metals hung on: Big miners too: EM stocks are in the stratosphere: High yield isn’t: US short end yields are poised to break out: Europe
Via The Australian through gritted teeth: The use of high-cost gas for electricity generation has almost doubled in two years, producing a perfect storm for household bills of record gas prices and a growing reliance on it to fill the energy gaps as coal plants come off line. The Australian understands that modelling provided to
By Leith van Onselen The Australia Institute’s chief economist, Richard Denniss, has posted his second The Lucky Country podcast, which contained an interesting discussion on mass immigration and its impact on living standards: Listener question: “I’ve heard arguments that letting refugees into Australia will actually help our economy as more people would mean there’s more
Yes, it’s a bubble. But it’s worse. It’s also a pyramid scheme that has no intrinsic value beyond the next greater fool to buy it.
Iron ore price charts for September 19, 2017: And down we go. Tianjin benchmark tumbled $2,50 to $68.30. It is now falling faster than paper. Steel has not update but futures were hit, via Reuters: Chinese steel futures dropped to their weakest in almost a month on Tuesday amid worries that planned winter curbs may
Read it and weep, Australia, from Peter Hartcher: Counting on China to deliver endless growth and profits? Then you need to know about the news item last week announcing that a big international conglomerate was forced to sell one of its businesses in China. The Lotte group in February offered the use of one of
Global Macro / Markets / Investing: What The World Thinks Of Trump – Five Thirty Eight An empirical analysis of peer-to-peer lending – VOX Fed’s balance-sheet unwind will be moment of truth for financial markets – MarketWatch BIS Hunts for ‘Missing’ Global Debt, Inflation – WSJ What Jamie Dimon Got Wrong About Bitcoin and Tulips
Dalian stuck but struggling to hold on: Big Iron up a bit as pressure eases: Big Gas stuck, except for the Pensioner Killer: Big Gold mixed: Big Sleazy bounce exhausted: Big Liar meh: Big nothing today.
By Leith van Onselen The Australia Institute (TAI) has produced an interesting report warning that record low wages growth could significantly curtail Australian’s superannuation retirement savings, placing immense pressure on the Federal Budget. Below is the summary of the report along with some key charts: The record-slow pace of wage growth in Australia’s economy is
RBA minutes: Domestic Economic Conditions Members commenced their discussion of the domestic economy by noting that labour market conditions had continued to improve, although spare capacity remains. Employment had risen further in July, the participation rate had edged higher and the unemployment rate had remained steady at 5.6 per cent. Full-time employment had risen strongly
By Leith van Onselen The ABS has today released its property price index – incorporating both detached houses and units – which registered a 1.9% rise in home values nationally over the June quarter and a 10.2% gain over the year, exactly the same as the 10.2% annual growth initially reported in the year to
Via the FT today: Donald Trump’s debut address to the UN General Assembly on Tuesday morning is expected to set out a nationalistic foreign policy based on “sovereignty” and which pulls back from any vision of America as an overseas nation-builder and singles out North Korea and Iran as “rogue regimes”. A senior White House
By Leith van Onselen Thirty-five health organisations have united to put an eight-pronged action plan to the Federal Government, which includes a 20% tax on sugary beverages. From The ABC: Obesity Policy Coalition [OPC] executive manager Jane Martin said obesity was having a dire effect on the nation’s physical and economic wellbeing. “We have a
Via Deutsche: Figure 57 updates our analysis looking at an equal weighted index of 15 DM government bond and 15 DM equity markets back to 1800. For bonds we simply look at where nominal yields are relative to history and arrange the data in percentiles. So a 100% reading would mean a bond market was at
By Leith van Onselen Back in July it was revealed that a draft tax ruling issued by the Australian Taxation Office (ATO) in March 2017 could allow “passive” family investment companies to claim tax refunds and deductions, opening the door for wealthy families to claim back hundreds of millions of dollars. This draft ruling overturned
Via UBS today: Our economic forecasts (see NZEP 8 September) reflect our base-case scenario election outcome i.e. that the National Party will form a government with the support of NZ First (see NZEP 1 September). While there could also be potential ramifications for the economic outlook from such a coalition arrangement, the implications of a
DXY was firm overnight: But the Aussie copped it: As did wider EMs: Gold was hit hard: Brent is too high in my book: Base metals rebounded: As did EM stocks: High yield is still stuck: US bonds were flogged as we approach the Fed: Europe too: And stocks hit more record highs: Pretty chaotic
As some brave folks prepare for rate rises in Australia, the leading indicators are going entirely in the opposite direction. If one subscribes to the basic premise that Australia is a houses and holes economy, that derives income by selling dirt to China and leverages that in offshore markets for mortgages at home, then the
