Global Macro / Markets / Investing:
- The Rich Get Richer as Billionaires Increase in Number – WSJ
- The World Loves Refugees, When They’re Olympians – NY Times
- What’s slowing growth? Sorry, conservatives: It’s not the size of governments – Washington Post
Americas:
- Georgia poll: Clinton leads by 7 points – The Hill
- Poll: Clinton leads by 13 points among likely voters – Politico
- Wall Street’s Reluctant Embrace of Clinton – NY Mag
- This election, it’s foreign policy, stupid – Boston Globe
- The Newspaper Association of America is mad at John Oliver for telling the truth about journalism – Quartz
- Trump’s ’revolution’ should be embraced by both parties – NY Post
- A Letter From G.O.P. National Security Officials Opposing Donald Trump – NY Times
- More and more women are now dying in childbirth, but only in America – VOX
- Percentage of Pack-a-Day Smokers Hits Record Low in U.S. – Gallup
- U.S. housing agencies would need more taxpayer funds in a crisis: regulator – Reuters
Europe:
- Draghi Jumps Brexit Hurdle to Find Oil Damping Price Outlook – Bloomberg
- ECB Leaves Investors Guessing on Some Banks’ Stress-Test Results – Bloomberg
- Zingales on the Risk Italian Banks Pose to the EU – Bloomberg
- Vulnerable UK banks still paying billions in dividends to shareholders – The Independent
- West uneasy as Moscow and Ankara edge closer – FT
- Brexit: Lessons from history – VOX
- Millennials suffering twice the inflation rate of baby boomers – The Telegraph
- The Ten Commandments of an independent UK trade policy – VOX
Asia:
- Banned from working, refugees are building Japan’s roads and sewers – Reuters
- Chinese tourist loses wallet and becomes refugee in Germany for two weeks by mistake – The Telegraph
- China’s first refrigerated container train leaves for Moscow – cri.cn
- China warns of ’crucial juncture’ over Hinkley delay – BBC
- China’s Credit-Based Stability Seen as Leaders Head to Beach – Bloomberg
- China’s Coal-Market Reforms Fuel Rebound in Prices – WSJ
- Debt-for-Equity Swaps Expected in Troubled Steel and Coal Firms – Caixin Online
- Australia is the biggest hurter of China’s feelings of the moment – Quartz
- Hong Kong Property Stocks Are Hottest Since Eve of 1997 Collapse – Bloomberg
- The less-noticed deterrent to North Korea attacking South Korea: Chinese tourists – Quartz
- When Chinese State Support Evaporates on Investors – WSJ
Trans-Tasman:
- ‘Blind Injustice: NAB has been charging an elderly blind farmer from rural Victoria 28 per cent interest rates on his mortgage’ – Michael West
- Australian Government’s Stupid Census Plans Puts Privacy At Risk, May Destroy Their Own Census – Tech Dirt
- ABS head must take blame if census compromised – IT Wire
- Census 2016: Labor urges all Australians to include their names – The Guardian
- Conservative Liberals use Four Corners to put Malcolm Turnbull on notice – The Guardian
- ‘We will split the Liberals on this’: Crossbench pushes on with doomed 18c race law crusade – The SMH
- Online gaming may boost school scores but social media is wasted time, study suggests – ABC
- Leading Economist Proposes Canada, UK, New Zealand, Australia Union – cfmo
- Election 2016: Voter turnout lowest since compulsory voting began in 1925 – The SMH
- Stop trying to fix unfixable families, academic urges – ABC
- ‘Fair value’ Australian dollar still a problem for RBA – The SMH
- We’ve Devoured A Year’s Worth Of Natural Resources In Just Seven Months, And Australia Was A Huge Contributor – Gizmodo
- South Australia signalling the death of base-load generation – Renew Economy
- Working class or affluent? Find out where you fit in Australia – ABC
- China: Australia is full of “second class convicts” – Global Times
- Republican nominee drags Australia into Trans-Pacific Partnership debate – News.com.au
- Never had it so good? The misconceptions about the cost of living – The Guardian
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What should Generation Rent do with their savings? – Interest.co.nz
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Key expects banks to pass on OCR cut – Interest.co.nz
Other:
- In First Autopilot Crash In China, Tesla Model S Driver Crashes In Beijing With Autopilot Engaged – Zero Hedge
- LTA on Tesla: CO2 emissions for electric cars start at power grid – Channel News Asia
- Are the Olympics ever worth it for the host city? – aeaweb
Latest posts by Unconventional Economist (see all)
- Housing market “settling” as vendors accept lower prices - August 8, 2022
- Links 8 August 2022 - August 8, 2022
- Weekend Reading: 6-7 August 2022 - August 6, 2022
UNITED STATES MEDIAN RESIDENTIAL LOT / SECTION PRICE $US45,000 … FURTHER INFORMATION … NATIONAL ASSOCIATION OF HOME BUILDERS (NAHB)
… FOLLOWING THE RECENT WALL STREET JOURNAL ARTICLE …
… SEE COPY BELOW …
… FURTHER IMPORTANT INFORMATION FROM THE U.S. NATIONAL ASSOCIATION OF HOME BUILDERS (NAHB) …
LOT VALUES AT RECORD HIGH ($US45,000) … NAHB
http://eyeonhousing.org/2016/07/lot-values-at-record-high/
GOVERNMENT REGULATION IN THE PRICE OF A NEW HOME … NAHB
http://www.nahbclassic.org/fileUpload_details.aspx?contentTypeID=3&contentID=250611&subContentID=670247&channelID=311
Low Supply Lifts Housing Lot Prices To a Record ($US45,000) – WSJ
… google search title if blocked …
http://www.wsj.com/articles/low-supply-lifts-housing-lot-prices-to-a-record-1470442821
The prices home builders pay for single-family lots hit a record high in the U.S. last year, a sign that a scarce supply of developed land is pushing up the cost of new homes.
Median single-family lot prices were $45,000 last year, surpassing the previous peak of $43,000 at the height of the housing boom in 2006, according to an analysis of the most recent census data by the National Association of Home Builders. …
. Prices have hit record highs even as the typical lot has been shrinking. Median lot sizes for single-family homes last year dropped to 8,589 square feet (HP comment … 797.5 square metres), the lowest since the Census started consistently tracking the data in the early 1990s. … read more via hyperlink above …
Five successful cities with cheaper houses than New Zealand – and what we can learn | Michael Daly | Fairfax NZ … Stuff.co.nz
http://www.stuff.co.nz/business/82089717/Five-successful-cities-with-cheaper-houses-than-New-Zealand-and-what-we-can-learn
The missing piece of the Auckland housing puzzle (Houston) | Catherine Harris | Stuff.co.nz
http://www.stuff.co.nz/business/industries/77529177/The-missing-piece-of-the-Auckland-housing-puzzle
In Houston, Texas, there’s no such thing as a housing shortage.
The state’s biggest, blue-collar dominated city rolls out as much as is needed, and land is cheap. Real cheap.
A decent house that might cost more than a million in Auckland will set you back US$200,000 to $300,000 in Houston. … read more via hyperlink above …
Why Tokyo is the land of rising home construction but not prices – FT.com
http://www.ft.com/cms/s/0/023562e2-54a6-11e6-befd-2fc0c26b3c60.html
The city had more housing starts in 2014 than the whole of England. Can Japan’s capital offer lessons to other world cities? … read more via hyperlink above …
LAISSEZ-FAIRE IN TOKYO LAND USE … MARGINAL REVOLUTION
http://marginalrevolution.com/marginalrevolution/2016/08/laissez-faire-in-tokyo.html
by Alex Tabarrok
Tokyo (prefecture … not greater metro area … HP comment), Japan’s capital city, has a growing population of over 13 million people but house prices have hardly increased in twenty years. Why? Tokyo has a laissez-faire approach to land use that allows lots of building subject to only a few general regulations set nationally. Robin Harding at the FT has a very important piece on the Tokyo system: … read more via hyperlink above …
2016 12th ANNUAL DEMOGRAPHIA INTERNATIONAL HOUSING AFFORDABILITY SURVEY
http://www.demographia.com/dhi.pdf
Tokyo Median Multiple … 4.3
Schedule 4 … Page 44
Good interview (https://www.youtube.com/watch?v=SNvyGnDueNk)
Retailers, Suppliers, and an Oligopoly payment schedule palsy in the press
http://ritualisedforms.com/payment-schedule-spin/
Australia’s mainstream media specialises in precisely this type of piece which I often refer to as ‘good news pap’ and have written for a number of corporate clients in markets other than Australia. The below is an interesting piece as although there is nothing particularly controversial (or an outright lie) in it, the entire tenor of the piece is presented to the reader in such a way as to give rise to a number of essentially false assumptions.
These are –
• That a supplier to Australian grocery retailing is identifying ‘improving’ competition – without for a moment questioning if all suppliers are the same in supplying to Australian grocery retailing (when the company doing the identifying has considerable power over the duopoly to protect its interests, and could quite rightly identify that the presence of an oligopoly in Australian grocery retailing over the last 15-20 years actually protects its interests). The desire to push this message would presumably be stemming from the marketing and media analysis services the large corporate has access to are probably picking up increased levels of suspicion about the retail world and its links to and treatment of suppliers – note the Michael West pieces of late about the treatment of agricultural and dairy producers selling through Coles and Woolworths.
And
• That the market is ‘increasingly competitive’ – without looking for a moment at whether it has been quite uncompetitive for a number of years or without for a second raising the idea that there is an ACCC which is supposed to be ensuring a particular degree of competition but which has been bound and gagged in many respects when it comes to looking at retail, and is averse to looking at payment terms to suppliers in any field.
The thrust of the piece is an unspoken ‘everything is going well’ mood in grocery retailing, when it is fairly obvious that everything isn’t. And this bien etre is being pushed to you via the financials of a supplier who benefits from the lack of competition in the Australian grocery sector, is protected by that lack of competition from competing products, and where the message is being pushed to the public in a media which is another oligopoly and benefits from precisely the same sort of cosy relationship as the sole source of being able to deliver a message for the large global corporate.
It is probably delivered against a backdrop of all parties (the retailers and the providers of goods – in this case a very large multinational) not wanting a revived ACCC looking at (let alone reporting on) the retail sector and its consequent impacts on Australian consumers.
One wonders how the story came about. It is most unlikely to be a journalist interested in the subject of payments and pressures applied by larger organisations on smaller suppliers – particularly with the spin it has. More likely there is someone in an editorial capacity somewhere who has told a journalist the line of a piece they wanted, and presumably pointed them in the direction of the line from the Kraft Heinz report, which provides the only remote substance (albeit spectacularly flimsy) for the piece which fits with the headline. What motivated this individual is another question. Something makes me suspect a tipoff from a PR type, which has become a desk based piece which can be written easily with a few search queries in google, and gets served up as an incoherent glibness reporting on nothing much at all……..
Presumably Kraft Heinz is noticing this from the perspective of a very large global supplier of a considerable number of the products you see in your grocery basket each week, which has presumably had a cosy agreement with Australia’s grocery retailing oligopoly of Coles and Woolworths. As a very large player it will have the scale to be able to influence the oligopolistic behavior of Woolworths and Coles, and will own of a large number of products which customers know and trust (giving it some power in negotiating with retailers), and because the Coles Woolworth approach to suppliers (particularly if they are small) will act to deter new competitors, Kraft Heinz will benefit from keeping the oligopoly working as long as it is delivering the sales at a price which suits Kraft Heinz.
The throwaway about Kelloggs’s is interesting. Kellogg’s is a supplier to Coles and Woolworths too and like Kraft Heinz, it would be in a position to influence margins and shelf space. But the article takes us off in the direction of the treatment Kellogg’s affords its suppliers. Having started an article referring Kraft Heinz and what it is saying about the retail sector, we have slipped into a discussion about Kellogg’s and its treatment of suppliers. More to the point there is no reference to how Kraft Heinz treats its suppliers – a question which is begging already.
OK this is where the ‘pap’ comes from. Over a chunk of earth too large to meaningfully consider the CEO says retail competition is ‘intensified’ . What does that actually mean in terms of competition? Has it intensified across the board in all those regions, or intensified on average? Have some parts of that geographic spectrum intensified less than others, and where would Australia sit in terms of that intensification? – Neither the journalist or their editors seemingly have thought to go there. Does he mean that all those other ‘mature’ markets are devolving into comfortable oligopolies like Australia? Or is he just saying that to keep a ‘nice little earner’ in play in Australia lest Australia become as competitive as nearly all of those other mature markets? From there we get a plug for a load of Kraft Heinz brands, and some touting of company financials which don’t tell us a thing about how much it makes per sold item in Australia vis a vis how much it makes per sold item somewhere else. All fine provided nobody starts asking meaningful questions about what it means for Australian consumers.
From there we get space cadet figures which aren’t even attributed (to anything). Apparently they tell us that grocery spending is rising marginally while consumers are opening up the turps (which is a good distraction for the ambient reader). Then we get half a sentence from a Macquarie note suggesting grocery is weak right now (It is weak because the nation is in debt, and has become gripped by a load of rent seeking oligopolies creaming consumers every chance they get with impotent competition regulatory settings powerless to do much about it is the real issue here) with some timeframe references so short as to be meaningless – April and May were weak and June was up, so how are we looking YoY?
From slipping the reader the thought of alcohol sales – even if unattributed – versus grocery sales, or where retail competition is intensified across much of the developed world for Kraft Heinz, all of a sudden we are back with the big bad business over there (pointing to Kellogg’s) and not here (where Coles Woolworths and Kraft Heinz mentioned in the opening paragraph are). It has told suppliers they can wait 120 days for payment – anyone interested in large producers and retailers taking producers to the cleaners should take a look at some of Michael West’s recent pieces, Supermarkets’ “pay-on-scan” scam ups ante on suppliers http://www.michaelwest.com.au/supermarkets-pay-on-scan-scam-ups-ante-on-suppliers/ (August 7, 2016) and Pay time: the big squeeze on small business http://www.michaelwest.com.au/payment-ruse-big-squeeze-on-small-business2664-2/ (August 1, 2016).
But from there the line about Kellogg’s having someone work with suppliers is your classic example of corporate psychopathy. Slap some glib words into a press release about ‘working with’ and companies can often evade a look at the pressure they are actually bringing to bear. We can be pretty sure that whoever from Kellogg’s is ‘working with’ affected suppliers will also be letting them know they can be replaced by other suppliers that want the outlet for their product if they wont accept the terms Kellogg’s is dictating to them. It is exactly that sort of mindset that the corporate protected by a secure oligopolistic position will try and dictate across the board to bolster its profits – to suppliers and consumers, and even outlets if it thinks it can (or isn’t getting an appropriate cut from the outlets it is working with).
The next sentence makes a valid enough point – suppliers do have issues about longer term payment timeframes – but it doesn’t refer to who is the supplier in the context of this article. You the reader are being supplied with bullshit on this point. Are we talking about suppliers to retailers (where we have no discussion on what their payment terms are, and no discussion of Coles Woolworths or Kraft Heinz who were mentioned in the lead sentence) or are we talking about suppliers to suppliers of products to the grocery retail world (in which case we have Kellogg’s being fingered for being nasty to suppliers but no look whatsoever about the impact this same approach has on consumers).
After that, however, we certainly have an issue and one which becomes ever more paramount in a very low interest rate world (and one with soft demand) where large companies (with bigger balance sheets, in a better position to get credit from large banks) force terms on suppliers to them (who are not in as good a position with banks – generally smaller balance sheets, where cash flow is a more significant factor) and where this ability to force terms on suppliers can be used to buttress the bottom line of either a larger supplier or a retailer, and force the smaller suppliers to crimp their margins further. And if you think that approach might be solely reserved for suppliers, then try comparing the prices on offer at a supermarket without a competitor in the vicinity to those with a competitor over the road or down the street.
John Winter is wheeled out to make a statement of the blindingly obvious, followed and an acknowledgement that there aren’t stats on the blindingly obvious.
Finally we get the Food and Grocery council suggesting that it is the end consumer setting the payment date for suppliers with the risk involved in the wait not being carried by the retailers. Some mild stats tossed in to suggest there has been some improvement in the last year on the payment timeframes, and a closing introduction of the Kouk suggesting things have never been better, but at least providing a longer term perspective. What anybody was supposed to make of this bilge in the first place, or even why it was run, must remain a mystery. But it was in your press.
+many easier to read at ritualisedforms.com top ?
The election of Brendon Grylls to WA National Party leader on the up-front platform of a resources tax may be the game-changer needed to finally get policy debate about the capture of economic rents.
http://www.abc.net.au/news/2016-08-09/brendon-grylls-elected-nationals-leader-in-wa/7706490
Interesting HR model…
http://www.bloomberg.com/news/articles/2016-08-08/stranded-in-desert-foreign-labor-is-casualty-of-saudi-slowdown
Established working class. Gotta get some more culture and fancy friends, clearly.