Links October 12

Global Macro:

  • The central bank put by El-Erian of PIMCO Naked Capitalism very good read
  • The debt crisis – lessons from history The Economist
  • Gloom and Doom as the world economy slows The Diplomat good overview
  • The weak currencies shall rise and inherit the earth The Economist bye bye battler

North America:

  • Romney in front in Gallup Poll! Business Insider never underestimate the American voter!
  •  “Recovery” in housing in California is leading nation? Bloomberg interesting way to put it
  • US jobless claims fall to lowest in 4 years Fairfax


  • Scariest chart on Greece – youth unemployment Reuters total is now nearly 25%
  • Rating cut puts pressure on Spanish debt Reuters heres the S&P cut detail at Bloomberg
  • Goldman Sachs prez says little chance of Euro staying together Business Insider
  • Nassim Taleb of Black Swan infamy calls Euro project “horrible, stupid” Foreign Policy not if you’re German
  • Coca Cola abandons Greece and heads back to Switzerland Reuters


  • Resource rich Canada looks to a “special relationship” with China WSJ h/t Deus Forex Machina ruh roh
  • High stake choices for China’s leaders FT (locked)


  • CBA Analysts slash iron ore, coal forecasts AFR (locked)
  • Mining money can’t help WA’s structural woes BRW very good piece
  • Very thin Business/Finance news at The Cupboard this morning…can’t find anything you can find elsewhere
  • Negative gearing to go on road to required surplus? Fairfax we can only hope
  • Pump up the immigration says the spruikers Property Observer very poor and sad analysis – babies are expensive so we should just import 21 year olds? WTF?



  1. Of course negative gearing will go! It will go because low interest rates get to a stage where they extinguishes the cost-of-carry. Then; those benevolent,socially minded landlords can pass on the savings they make from not making a loss on their properties! Just the reverse of what they said they will do if associated costs rise. Or maybe life is really just a Landlord’s Put…..

    • DelraiserMEMBER

      That article is a piece of spruiky junk designed to scare investors…….and there I was expecting some thoughtful analysis.

      Editors, can we not link to blatantly biased MSM property articles? We all know where to go when we need a laugh in the morning, so no need to lower standards here by giving that kindo of crap more oxygen

      • Need balance delraiser. I normally cant find anything of interest in The Australian most mornings (since you can find it most elsewhere, and the day before usually)- if you limit me from not linking the spruiky duik at Fairfax as well – what’s to talk about? Need to see the other side of the fence from time to time you know…..even if that fence has sticky paint and a foul stench

      • The decision to implement this ban made it a big candidate for the winner of ”it seemed like a good idea at the time” awards. Banning tax deductions for negative gearing losses, coupled with the introduction of capital gains tax in September 1985, resulted in a shortage of rental accommodation and led to an increase in rents.

        The decision was eventually reversed by the Hawke/Keating government only two years later. Not only had the stock of rental properties dried up, but the building industry was in big decline and further action had to be taken.

        This blatant spruik by Max Newnham is totally debunked by Saul Eastlake

        Supporters of negative gearing argue that its abolition would lead to a ”landlords’ strike”, driving up rents and exacerbating the shortage of affordable rental housing. They point to ”what happened” when the Hawke government abolished negative gearing (only for property investment) in 1986, claiming that it led to a surge in rents, which prompted the reintroduction of negative gearing in 1988.

        This assertion has attained the status of an urban myth, but it isn’t true. Rents (as measured in the consumer price index) did rise rapidly (at double-digit annual rates) in Sydney and Perth, but that was because in those two cities, rental vacancy rates were unusually low before negative gearing was abolished. In other state capitals (where vacancy rates were higher), growth in rentals was either unchanged or, in Melbourne, actually slowed.

  2. Mining BoganMEMBER

    Max Newnham eh? I see his ramblings of deception and subterfuge haven’t improved.

    There’s a reason why his ‘articles’ are never open for comment…

    • looks like he doesnt even understand the economy

      “This is proven true by our record savings in this country since the GFC as the general population adopted a defensive stance such as savings and paying down their debt, as opposed to an aggressive growth strategy such as leveraging through increased debt.”

      Err – the savings was due to record government deficit spending – and we borrowed a quarter of a trillion – yes a T – of new money (almost half overseas) to purchase already existing homes off each other, pushing the total stock of debt to $1.25 trillion

      For an accountant, this is very poor analysis.

      EDIT: and sad analysis to be frank…I’ve added the link

  3. Diogenes the CynicMEMBER

    The WA article in the BRW reads true. All those extra people are putting a lot of heat on the State Govt to fund infrastructure, with royalties dropping and stamp duties flagging it is causing a crunch. I hope that the population tide will go out soon as these mining projects are halted or completed.

    Some good news is that WA Managed to open the largest utility solar farm in Australia this week…a 10MW facility(perhaps to become 40MW) near Geraldton. Given the complete failure of the Solar Flagships (Rudd’s baby) to open anything (announced FY10 FED budget) this project is to be commended.

  4. “very poor and sad analysis – babies are expensive so we should just import 21 year olds? WTF?”

    But it WILL be the way of the future. Like Obi Wan for Leia, immigration is the property spruikers only hope. And with the MSM properly mobilised, it won’t be as politically difficult to execute as some might anticipate….

  5. I was researching something else when I stumbled apon this. Recall the many discussions here and the power of technology to overcome obstacles to sustainable growth , rather than Govt’s subsidising and entrenching losers. Many interesting points, one of which the comparisons of inputs for “renewables”. Anyway an interesting read for Energy AND Climate buffs;

    “Big green energy machines
    How are we going to generate more power and decrease its impact on the environment? “