RBA Chart Pack

trader

by Chris Becker

I love me some charts! The RBA Chart Pack is out this morning, published each month, this is a treasure trove for the visualisers out there.

Here’s my take on a select few:

Major partners, India and China GDP growth is moderating back to pre-GFC Western levels (i.e mid single digits):

1tr-gdpci

While the West hobbles in the 1-3% range stalling:

1bl-gdpg3

GDP is not a very good measure of prosperity, so let’s look at unemployment and inflation. First US, Japan and Europe, with the latter a big fail:

2bl-unempg3

Compared to Australia, where the trend is significantly up – why is it so?

11bl-unemprt

Staying in Oz, if you think the country is “growing about on trend” then you’re probably confused about global warming to. This is a downtrend:

4tl-gdpgrwth

With absolutely no concerns about inflation:

4bl-underinf

Or a wages breakout:

10tr-wpi

So ignore those “mad” economists who consider deflation a non-risk and rate rises just around the corner as just that….

One of my favourites, showing the impact of private debt on the household. Chaps, if it wasn’t for lower rates we’d be in double digit unemployment now:

6tl-hhfin

Although that “peak” in debt looks like a new breakout is brewing, so yes any lower rates and all bets are off. Rock and hard place again for the RBA, but they’ve been so far behind the ball it doesn’t matter now, regardless of Smoking Joe Treasurer’s next (final?) Budget.

Sydney house prices to the moon:

6bl-houspri

Speculators, I mean investors, about to take over owners for borrowing:

6br-hla

To the businessmobile and investment is tanking, but still above historical levels:

8tl-businves

We’re still sitting on the edge of the mining investment cliff:

8tr-capex

But its only started, as engineering and machinery investment tanks:

8bl-businvcm

The Federal Budget will blow this out next year as the deluded MYEFO (the shrinking bars to the right of the line) thinks it can be arrested:

14tl-austbud

As State Budgets go deep into the red on the iron ore collapse, and soon LNG for the beleagured QLD Newman goverment:

14tr-statebu

As our public debt levels go up and up, but still at very low levels in comparison with the past and of course private debt:

14br-nonpub

Terms of Trade is reverting to mean as the mining boom goes bust:

15br-tot

This is what happens when you purposely structure an economy around speculative commodity prices:

15bl-blkcomp

But isn’t that a pretty chart for the (mainly foreign owned) miners! To the moon Gina, I mean Alice!

16tr-bcomx

Even with huge volumes and a once in a century mining boom, the current account deficit (CAD) continues to blow out as net liabilities surges. Nothing like borrowing from the rest of the world to buy your own houses off each other:

17bl-nfl

Now to interest rates – low, lower and nothing are the order of the day:

18tr-prg3 18br-pradv

Except Russia!

19bl-prem

Bond yields continue to fall to the floor (and in some cases to the next “ceiling”):

19br-10yg3

As local interest rates continue to fall:

22tl-auhir

 

But the banks are doing just fine and dandy – what a wonderful gig – high double digit ROE, almost zero risk of going under, you can fib to the regulators that you have enough “capital” and still make a motza as your net interest margin falls:

29tr-bnkprof

That’s all, I’m off to lunch.

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Comments

  1. Great set of charts and comments. Maybe Glenn and Lucie et al will have them for beach reading.

  2. Australian IR chart is interesting: despite official cash rate being 2.5% (1.75% below previous low 4.25% in 2001/02) actual IRs on outstanding loans are 5.25% only 0.5% below rates in 2001/02 – 5.75%.

  3. That CAD chart makes a pre-1990s economist shudder.

    The equity investor (carry trader) has indeed left the building thanks no doubt to the 20% decline in the AUD

    CBA trades at 3 times book despite all this.

    Australia is a ponzi at all levels of asset ownership – property, equity and debt markets – because the vast majority of superannuation now owns all three via the banks.

    Check out the recent divergence between CBA and the Canadian banks – its different in Australia apparently – crashing iron ore and oil to have no effect on the Sydney bubble?

    Look out below

    • The CAD chart would also make every non-Australian economist shudder.
      In the early 90’s I think Bernie Fraser said managing the accumulated CAD/net foreign debt was about maintaining sovereignty. And that was when net foreign debt was about 30% of nominal GDP.

      Just for good measure, gross foreign debt currently stands at about 100% of nominal GDP. Thank you Howard and Costello – most incompetent economic managers since Federation.

      • As an Economics student of the early 90s I recall the constant tussle in academia over the importance of the 6% level of the CAD and seem to recall it feeding into Keating’s “Banana Republic” comment.

        That of course was before clowns like Howard, Swan and Hockey decided the Lego movie theme “Everything is Awesome” should be substituted for sensible economic discourse. I let Costello off the hook a little because he was simply a pussy – he knew he was doing the wrong thing – but didn’t have the prunes to stand up to JHo thinking the little turd would leave the S Bend with some dignity. Whoops…

        Now Australia is a Banana Republic with a bigger mortgage than ever before and an entitlement culture that can’t remember 1990

        Banks are lending people money to buy $1m fibro knockdowns in Cronulla

        If that doesn’t make you sick you have lost touch with reality.