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.
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ASX stalls with iron ore
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Wage suppression a time bomb for superannuation system
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
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RBA minutes hit Goldilocks tone
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
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ABS: Sydney, Melbourne drove property prices up 1.9% in Q2
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
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How’s Donald Trump 2.0 treatin’ ya?
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
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Health experts’ flawed call for mandatory health-star ratings
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
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Are all-time high asset prices everywhere a problem?
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
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Coalition fights base to close wealthy tax loophole
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
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What will cutting immigration do to the NZ economy?
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
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Australian dollar bashed on Fed hopes
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
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Get set for slowing houses and holes…
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
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Mortgage arrears by district
Via Moody’s: The proportion of Australian residential mortgages that were more than 30 days in arrears (30+ delinquency rate) increased to 1.62% in May 2017, the highest rate in five years. Higher delinquencies raise the risk of mortgage defaults and are therefore credit negative for Australian residential mortgage-backed securities (RMBS). Mortgage delinquencies increased to record
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More on Australia’s collapsing home ownership
From CoreLogic’s Cameron Kusher comes a nice breakdown of last weeks’ ABS biennial survey of household income and wealth: As at the 2015-16 release 30.4% of households were lived in by someone that owned that property outright. This figure was lower than the 31.4% in 2013-14 and as the above chart shows it has been
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Energy chaos paying Do-nothing dividend?
Has Do-nothing Malcolm found his one issue in coal? Via The Guardian: The latest poll shows federal Labor maintaining an election-winning lead over Malcolm Turnbull’s government on the two-party preferred measure – but the gap has narrowed over the past week in the government’s favour. Last week, Labor was ahead of the Coalition on 54% to
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Our universities have become money grubbing ‘degree factories’
By Leith van Onselen Fairfax’s Ross Gittins delivered the goods again yesterday with a stinging take down of Australia’s “aimless, money-grubbing exploiting” universities: Of the many stuff-ups during the now-finished era of economic reform, one of the worst is the unending backdoor privatisation of Australia’s universities, which began under the Hawke-Keating government and continues in
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SQM: Record dwelling construction can’t outrun population ponzi
SQM Research has released its rental vacancy series for July, which revealed a 0.1% fall in the national vacancy rate over the month as well as a 0.1% decline over the year: As shown above, rental vacancies fell or were flat rose across all capitals in August. Over the year, decreases in vacancies were recorded
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NZ Labour schools Australian Labor on immigration
By Leith van Onselen In the lead-up to this Saturday’s New Zealand General Election, the Labour opposition has continually taken aim at New Zealand’s excessive immigration program, which Labour claims is choking housing, infrastructure and public services in Auckland, as well as undercutting working conditions. The Economist has published an interesting profile on Labour’s leader,
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Western Sydney schools bursting under population deluge
By Leith van Onselen The immigration-driven population boom in Sydney – which has added 845,000 people (20%) to Sydney’s population over the past 12 years and is projected to increase Sydney’s population by 87,000 people a year over the next 20 years – is the gift that keeps on giving. Back in December and January
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Daily iron ore price update (waiting on steel)
Iron ore price charts for September 18, 2017: Tianjin spot fell 10 cents to $70.80. Spot formed overnight. We’re still waiting for a break lower in steel, the one missing ingredient for a big correction. It will surely come, via Reuters: Beijing will suspend construction of major public projects in the city this winter
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China intensifies Bitcoin smash
Via WSJ: The crackdown on the bitcoin ecosystem represents Beijing’s possibly biggest effort so far to limit expansion of a system to rival the yuan. In a previous crackdown, in 2009, the central bank banned the use of tokens valued at billions of dollars created in China’s massive online-gaming networks for real-world purchases. A quasiregulatory
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Chinese capital outflow crackdown tightens further
Via Reuters: China will strengthen its supervision of overseas investment risks and capital flows from insurance funds, the insurance regulator said on Monday, adding that it will urge companies to improve their risk monitoring systems. China has cracked down this year on “irrational” overseas investment which it suspected was one way of disguising capital flight
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Links 19 September 2017
Global Macro / Markets / Investing: Machine Learning Meets Central Banking – FXdiebold Unmanned ’ghost’ ships are coming to our oceans – WEF Strong outlook with low inflation spurs risk-taking – BIS BIS warns higher interest rates could derail global growth – FT World’s Central Banks Can’t Ignore the Bitcoin Boom, BIS Says – Bloomberg
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Ominous signs in China not yet priced…
Dalian is putting on a brave face today despite the weakening omen of Chinese house prices: Big Iron is mixed but looks toppy: All three majors have room to fall before their up trends are disrupted, here’s RIO: I expect a move back into the $50s for iron ore before year end so those trends
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The luxury car sales omen for house prices
Courtesy of Craig James: Sales of new luxury passenger cars and sports utility vehicles (SUVs) stood at 103,231 in the year to August, down 1.8 per cent from the annual total of a year ago.
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Salt of the Ponzi confusion grows
By Leith van Onselen I have frequently questioned the efficacy of Victoria’s (Melbourne’s) population (immigration) fueled economy because I believe that it is reducing the living standards of the incumbent population: This view is based on several observations. First, since the onset of the Global Financial Crisis (GFC) in 2008, per capita gross state product