Links August 10

Global Macro:


  • Could Iran court the Taliban to bolster its options? The Diplomat
  • And is the Taliban really the source of violence in Central Asia? EurasiaNet 

United States

  • No recession says Cullen as rail traffic expands Prag Cap
  • But nobodys buying stocks – volume down 17% on year ago (seasonally?) ZH
  • Surprised? Goldman Sachs employees donate more to Romney than Obama Bloomie
  • AAII Sentiment turns bullish first times since May Prag Cap
  • Go postal, lose $5 billion Reuters 
  • US home prices on the way up in “recovery” Bloomberg


  • Is austerity good or bad? It’s neither. Jeffrey Frankel in Vox EU
  • The German labour market is more volatile than you think. More insights from the brainiacs at Vox EU 
  • Spanish and Italian bonds fall on ECB enthusiasm waning Bloomie


  • Why China’s rise may have already peaked. Minxin Pei in The Diplomat 
  • Maoist protesters show support for Bo. Financial Times 
  • Grassy knoll: China admits to large-scale live organ harvesting. Epoch Times
  • This time Japan is the source of dodgy infant formula. South China Morning Post 
  • No wonder they’re not having babies. Japan’s population falls for a third consecutive year. Japan Times
  • China’s Yum-Cha economics The Age where have I seen that article before?
  • More links in the daily “China Links post”


  • Resource curse could be a blessing if properly used. Joseph Stiglitz in Project Syndicate. Stiglitz writes with Africa in mind, but the lessons also apply to Australia.
  • Can’t rig the swap rate here, says RBA The Cupboard Phew – so, how about that politico-housing complex rig?
  • Big banks competitive enough says Treasury AFR duh…
  • Bank funding costs and competition will keep costs high for years The Age
  • Diggers need luck, not levies AFR  boo hoo
  • Newscorp needs luck too, profit slumps on writedowns AFR why does The Doors’ “this is the end” ring a tune here?
  • Time for investors to get off the sidelines AFR um, there are no “sidelines” – this is a myth, but a good one for journalists


  • Stupidity is on the rise in public debate – Barry Jones Fairfax Indeed – we get the media and politicians we deserve
  • Wisconsin teen America’s fastest texter. Chicago Tribune. The new spelling bee?



    • our PMI means squat as we are a “resource” country, everything fine manufacturing/non-mining export is being adjusted/hollowed out.Smile 🙁

  1. From the age article

    “ANZ’s deputy chief, Graham Hodges, said the biggest pressure on its cost of funds was the fierce competition for deposits, which continued to heat up. Banks obtain about half their funding from deposits, but are looking to lift this to 60 per cent, forcing them to offer higher interest rates to savers”

    No surprises there.

    If we want to reduce our dependence on the often involuntary savings habits of the developing world, economic meltdowns, rapid tides of international capital, Australians need to save more and that means giving them a reason to do so.

    Clearly, they are not willing to give up the joys of consuming without some incentive.

  2. Big banks competitive enough says Treasury AFR duh…

    Jim Murphy, head of Treasury’s markets group, told a Senate inquiry yesterday that Australia was fortunate to have a strong banking system, given that failed banks had crippled northern hemisphere economies.

    Yep, the same Jim “Trust us, we are doing our job” Murphy from the article I linked yesterday.

    If the banking system is so strong, why is there so much secrecy and fobbing off of FOIA requests by the regulators?

  3. Stiglitz and the Resource Curse. Many months ago I posted academic data on the resource curse illustrating the reference largely confined to non-developed economies with little diversity and unsophisticated institutional framework. That is, economies like those cited in the article NOT Australia.

    We remain a diversified economy with sophisticated institutional framework that in addition is resource rich (both mineral and agricultural). As I argued then and now, the notion of resource curse as pertaining to undeveloped or emerging economies are not applicable to Australia.

    Think historically, various of our resources have waxed and waned over the decades but our broad economic base continues on. The countries Stiglitz refers to do not have that luxury.