Links September 6th

Global Macro:

  • Investment Outlook – ​The Lending Lindy – PIMCO
  • Barclays heads roll over Libor – The Telegraph
  • Bloomberg Markets’ 50 Most Influential: The People With the Power – Bloomberg
  • Econbrowser: The gold standard and economic growth – Econbrowser
  • Is That All There Is? The Remarkably Small Costs of Quantitative Easing –
  • Economist’s View: ‘Zero Lower Bound Denial’ – Economist’s View
  • PIMCO’s Gross spotlights crumbling credit in September outlook – Reuters

United States:

  • Trulia: Asking House Prices increased in August, Rent increases slow – Calculated Risk
  • How Bill Clinton’s Balanced Budget Destroyed The Economy – Business Insider
  • Why the Minimum Wage Doesn’t Explain Stagnant Wages – New York Times
  • Are Democrats the Party of Austerity? – CNBC
  • Lehman’s Detroit Escape Means 90% Loss on Properties: Mortgages – Bloomberg
  • Democrats don’t want to go back to Clinton-era rates – Washington Post
  • Why big banks are hazardous to US financial health – The Economic Times –
  • Food Stamps Hit Record High In June 2012 – Huffington Post
  • Second-quarter productivity raised, wage inflation muted – Reuters
  • Warren Buffett’s municipal weapons of mass destruction | MuniLand – Reuters


  • ECB Plan Said to Pledge Unlimited, Sterilized Bond-Buying – Bloomberg
  • Bank of Spain comment on emergency liquidity for banks –
  • German bond auction struggles as ECB expectations weigh – Reuters
  • Details Of ECB Bond Plan – Business Insider
  • Euro zone sales fall in July as consumers struggle – Reuters
  • Greek exit fears strengthen Draghi’s hand – Financial Times
  • Goldman Has The Most Devastating Description Of The ECB’s New Bond Buying Scheme – Business Insider
  • Fiddling the figures while Rome (and Madrid) burns | FT Long Short – Financial Times
  • European Central Bank bond purchase plan: It makes sense once you see it’s an ECB power grab – Slate
  • Hedge funds bet France is more peripheral than core – Reuters
  • FT Alphaville » Some more Draghi-day prep – Financial Times
  • Eurozone demands six-day week for Greece – The Guardian



  • Miners forced to take discounted prices for iron ore – Business Spectator
  • Economy hit hard as resources go backwards – AFR (you ain’t seen nothing yet)
  • Spending up, but so are costs to household consumers – AFR
  • Miners forced to cut prices  – AFR
  • Resource states take the lead again, defying talk of a mining slowdown – AFR (wait till the Sept quarter’s numbers are released)
  • Aussie dollar may drop below parity – AFR (about bloody time)
  • Ageing tsunami approaching – AFR
  • Police & Nurses Credit Union cuts max LVR on mortgages to 90% – Banking Day
  • Swan blasts economy doomsayers – The Age What do they say about official denial?
  • Australia eyes Spain as world’s 12th biggest economy – The Age
  • Falling iron ore prices creates havoc for mining services – The Age (MacroInvestor went short weeks ago)



  1. Brilliant piece from John Lee at Business Spectator, just brilliant:

    China grasps for a growth alternative

    Its all great, but here’s a couple of choice quotes:

    Since the mid-1990s, urbanisation has been advancing at the rate of less than 1.5 per cent each year. Yet fixed investment has been growing at 20 to 40 per cent each year for the past decade.

    Until recently, many Australian politicians, business leaders and commentators refused to accept the reality that our miners are the major beneficiary of a politically expedient growth model that does not make any economic or commercial sense.

      • Leith, I only read it because I saw your tweet this morning. I don’t think Dad’s Army promoted it much because I don’t recall seeing any links to it on the homepage and I usually click on any China stories, especially those from John Lee.

    • I doubt it Mav. Apple have a huge legal budget, and I’d say the Chinese company don’t. Having been on a few mobile IP cases and seen the time and resources thrown at them, this story is funny, but I doubt it will get anywhere. The world of mobile IP is dominated by armies of lawyers. These people can come to a meeting read a technical spec or whatever and be on the attack. It’s very scary..

    • David You all have to be kidding with that debt jubilee thing. Has anyone thought that through at all? Steve has conveniently put the external account into the too hard basket for some time because it is a bit too difficult to fit in his models. That doesn’t mean it ought be ignored when designing policy.

      • Ireland has spend 14,000 Euros per person on bank bails. A debt jubilee of the same scale would have produced a far better result.

        I Know its radical and scary, yet the consequences of conventional policy is decades of debt deflation.

        My piece was to prompt the RBA to study – really study – the option of a Debt Jubilee vis-a-vis the economy-crushing option of socializing bank losses.

      • I agree with Flawse, the debt jubilee in my opinion is probably expensive panadol, it will treat the symptom give a kick along but doesn’t address the sickness unless other policies are implemented. Personally I suspect it could be used on a region by region basis in conjuntion with revamped regional building societies, sort of along the swiss concept and get regional areas actually contributing and being rewarded for helping change the external account. Areas like north west tasmania as an example or the far south coast of NSW.
        Good article overall though David.

      • Keen’s proposal is a better alternative to the current central bank policy of monetizing bank debt and trying solve a debt crisis with more debt.

        Re external account, EVERY other nation that we have trade relations with, have followed the exact same policy of devaluing their currency, while we sat gloating and sang jingoistic praise about our strong AUD. We are simply paying them back by the same coin, albeit without passing on the benefits to the local b(w)ankers, but directly to the citizenry to help reduce their debt and encourage savers.

        Therefore, unless anyone else can come up with a better proposal, I am inclined to support Keen’s QE for the people.

    • Yes indeed, let’s have more honesty and less spin and games.

      All hail Mr Malcolm “HIH collapse” “$450m lawsuit” “Named defendant” “Goldman Sachs’ confidential settlement saved my a*$e from the scandal of appearing in court whilst Opposition Leader” “Carbon Derivative Banksters ‘R Us” Turnbull.

      • Thanks for the link 31dk.
        I agree that the SMH headline was off the mark.
        It really made my day to read how MT defended honesty. Opinio8red, maybe MT has actually learned from the past, some people do!
        It was great he pointed out how the ongoing public discussion has concentrating on people smugglers and carbon tax only. Where are the debates about sustainability of our lifestyle, the long term vision on what kind of society we want to be in the years to come, effects of global events on our future, dangers of debt, importance of enforcing transparency in business, media and politics etc etc.
        Well, I am an idealist like MT, but even so I dare make a claim that truth always wins in the end. I think that will be one of the great lessons of this whole global crisis and honesty in statistics, reporting and governance will be back in vogue.

        Yours truly,
        idealist centrist Goldi

        • I agree wholeheartedly with all your comments here, bar the “maybe MT has actually learned from the past…”.

          I’m very much an idealist too. But not so much so as to be naive with regard to the true motives and high-minded, beguiling rhetoric of lawyers, bank(st)ers, and politicians.

          And MT is all three.

    • Finally someone openly speaking in favour of more honesty and less spin and games.

      If Turnbull wants better political discourse, he’s not going to get it supporting the Liberals.

      • Curious though, MT speeches here, NBN rebukes there… doing his thing. KR, speeches here, walk through the mall there, doing his thing.

        Moves are afoot.

        I would gladly see Gillard replaced. By anyone. If the MT replaced Abbott, unbeatable. More unbeatable.

  2. Falling iron ore prices creates havoc for mining services – The Age (MacroInvestor went short weeks ago) – following comment from a certain individual questioning validity of brokers/advisers (including MB) “go mining services” calls…. 🙂

    • “nuance” is definitely a village in France for you Minebot.

      “mining services companies” are a very diverse bunch – opex and capex. Some mining services companies will be fine in a commodity bust, some wont, points we’ve made in MI, repeatedly, and with research.