Links 25 January 2013

Here’s a list of things Reynard read over night.

Global Macro:

  • The shape of discretionary spending in emerging markets – FT Alphaville
  • IMF: Cut bankers’ pay or risk another crash – The Independent
  • Preparing for a nickel glut? – FT Alphaville
  • Dr Doom says quantitative easing will create zombie banks, firms and borrowers – The Guardian
  • Money printing ‘amounts to theft from our children’ – The Telegraph

North America:

  • S&P 500 tops 1,500 for the first time since 2007 – Marketwatch
  • Rapidly falling resource revenues hit Alberta Canada – The Globe & Mail
  • “Worst US recovery ever” – Zero Hedge
  • The Untouchables: Why Wall St escaped prosecution for any fraud related to the sale of bad mortgages – PBS Frontline
  • US Flash PMI for January rises to 56.1 – Business Insider
  • Weekly Initial Unemployment Claims decline to 330,000 – Calculated Risk
  • Analysis: U.S. bond stars bet big on equities revival – Reuters
  • U.S. companies need to get real about pensions too – Breakingviews


  • A Greek statistician speaks out – FT Alphaville
  • Thanks for letting the team down, France – FT Alphaville
  • French Flash PMI Comes In Horrible – Business Insider
  • Spanish joblessness climbs again, no relief in sight – Reuters
  • Commentary on David Camerons’s Pledge to Hold EU Referendum – Der Spiegel


  • Tim Harcourt: The Asian Factor – BRW
  • Japan records largest ever trade deficit – Financial Times
  • China Manufacturing Expands at Fastest Pace in Two Years – Bloomberg
  • China HSBC flash PMI hits two-year high in January – Reuters


  • Michael Pascoe: “the use of family trusts is a joke at the expense of the less fortunate” – The SMH
  • Baby boomers may have cultural cringe but gen x & y know Aus is a great place – The Punch
  • An early election is an economic must for Labor – The AFR
  • Push to cap super lump sum payments – The AFR
  • Demand for executive rentals falls – The AFR
  • Twentysomethings still suffering GFC effects – The Age
  • Budget cuts hit elective surgeries – The Age
  • Fortescue to branch out from iron ore – The Age
  • Australians more positive than expected. Still love property – The Age
  • Adapt or sink, Combet warns manufacturing industry – The Australian
  • RBA must ignore calls for more rate cuts – The Australian


  • Buffett pulls ahead in wager against hedge funds – Fortune


  1. “Worst US recovery ever” in an environment where the US Government and Fed have thrown more at the crisis than anytime in history. QE & deficit spending working it’s magic.

    • Yes, it’s interesting, isn’t it?

      The athlete – the US economy – is “recovering”.

      But the athlete has been a crack addict (QE, debt, bailouts and stimulus), and nothing has changed.

      Now that the the drug has been increased to levels greater than ever, and has no end in sight (ie. “forever”), the addict is taking walks on the beach as part of the “recovery”, instead of sitting on the couch moping or passed out; we’re all like “Yeah, you go man! And we’re all in with you”.

      If it were a person, you’d think, “Well, I GUESS they’re doing better…but won’t the crack kill them at those levels…?!” But, hey, it’s economy, so I guess crack is all good, eh?

      Reduce the crack, and what will happen? Can the patient ever actually genuinely recover and get off the crack, given the existing problems that still remain (ie. debt hangover, and now a “currency war”, where a good deal of the US recovery is likely predicated on their relatively, and artificially, weak currency, in effect due to Fed manipulation). Or, does QE need to be “forever”?

      The same old problems remain, only wealth transfer from other nations via currency depreciation seems to be working for the US for now; good luck with that).

      My 2c

      • Relevant?

        Lance Armstrong doping = seven straight Tour de France victories.

        Lance Armstrong not doping = 3rd, then 23rd.

        hah, but on a serious note, I don’t think we can call it a recovery until we’ve seen whether the economy continues to improve as stimulus measures are reduced and interest rates are increased (exactly as you describe above, once they are off the crack let’s see how they go). Not something I can see happening in the immediate future.

        It’s silly to just look at US house prices (as some are doing) and claim recovery is in progress.

        It will be very interesting to see how the unemployment rate changes. How many of the long term unemployed who dropped off the statistics (resulting in a falling participation rate) are going to make a comeback as new jobs are created? This may seriously affect the ability of the US to reduce their unemployment rate to the levels the Fed would like to see (6.5%).

        • Absoloodle to you both.
          The problems in our societies run deen right down to our education and social systems.
          Even if we do decide to try to fix the problems (decide to try to get off the ‘crack’) it will take generations of pain!

  2. ‘Adapt or sink, Combet warns mining industry’ – he’s warning manufacturing, not mining.


    ‘Baby boomers may have cultural cringe but gen x & y know Aus is a great place’ – apparently not those gen x/y’s that spend days on threads advising their intent to move o/s 😉

    • In the comments Python says
      “This tax is like cancer, it creeps in slowly.”

      NOW! I’m not arguing for or against it. However i do despise the portrayal that it has been some sort of costless exercise because we haven’t had a jump in inflation.

      Firstly we have PMI, PSI, PHI all in sharp decline while their input costs and wages are increasing sharply…now I wonder what could be causing input costs to rise? The inflation will come slowly but surely.
      Secondly for most of us the C tax isd creeping in on our costs. We don’t immediately increase prices to cover it because it is impossible to get a clear cut measure of the costs. You just see all your costs going up as more and more firms get a handle on what it is costing them and accounting for it.
      Thirdly I have some involvement with an iron nore project that requires some processing of the ore before it can be used in furnaces. The original plan was to carry out that process before shipment. The Carbon Tax changed made that impossible…so less employment.