Links 9 November 2018

Global Macro / Markets / Investing:





Leith van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

Latest posts by Leith van Onselen (see all)


  1. US mortgage rates jump to highest level in 7 years – AP / The Washington Post

    U.S. mortgage rates jumped this week to the highest level in seven years, a trend that is pulling down home sales and slowing home price growth.

    Mortgage buyer Freddie Mac said Thursday that the average rate on a 30-year, fixed rate mortgage rose to 4.94 percent, from 4.83 percent last week. A year ago the rate was 3.9 percent.

    The average rate on a 15-year, fixed rate loan increased to 4.33 percent, from 4.23 percent last week. Read more via hyperlink above …
    TREASURIES -U.S. yields edge higher ahead of Fed statement | Reuters
    The US debt is like ‘the boiling frog,’ investors say … Yahoo Finance

  2. From the horse’s mouth.

    From Caixin.

    “An economy benefits the most from rising debt when its household-debt-to-GDP ratio is under 10%, according to the IMF. When it hits 30%, it can interfere with the country’s medium-term economic growth. Above 65%, it begins to undermine financial stability.”

    Contact reporter Charlotte Yang ([email protected])

  3. How it was Pt3:
    If the general managers of the 12 banks that burst in 1891 and 1893 had kept paid clowns to make fun of the valuations of city and suburban land, made by the old-established auctioneers and valuators of Melbourne in the land boom days, their banks would never have closed their doors.
    Every bank should keep a laughing department where absurd valuations and ridiculous securities could be laughed off the premises.
    The easiest marks as borrowers were the building societies and the land and estate agents, and they had a right royal time asking for and getting advances.
    In those halcyon days nobody was ever refused a loan by a bank manager.
    So the banks opened agencies in Scotland, Ireland and England, and borrowed millions on deposit receipts for 18 months and lent them out in Victoria for 30 years, and a great deal of the money, for eternity.
    It wasn’t a mad or pessimistic or despondent thing to do.
    It was one calling for laughter, for merriment, for jocosity.
    Why should the good-humoured borrower explain to the dismal bank manager, irritated and worried by Head Office letters and circulars censuring him for not lending money fast enough, that though he had paid £1 a foot for land at Coburg or Glen Iris or Mentone that it was not in his own opinion worth the £10 a foot of his own valuation.
    Nobody dared to laugh at these insane transactions, nobody was brave enough to say,
    ” All this business is frenzied, delusive and pure buffoonery. There must be a smash.
    ” And there was. Prices of houses and lands jumped higher and higher, day by day, nay, hour by hour, and more and more people were drawn into the maelstrom, into a true Walpurgis ride to sudden wealth.
    Rateable property in cities, towns and boroughs went up by leaps and bounds from £53 to £86 million sterling in 5 years, while the rateable property of shire councils jumped from £71 to £108 million in the 5 years 1886-1890.
    It was all so dashed funny, because there was no solid foundation for all this paper wealth.
    Production did not increase part passu, nor overseas trade, nor exports, nor shipping, except that imports increased literally horribly.
    During 1886 and 1890 in Victoria, railways costing Z8 ,000,000 and 486 new churches and chapels were built.
    To me it was all so ridiculous and amusing, and the best of the joke was that none of the leaders of the people in Press, Parliament, Church, or on the platform, ever uttered a single word of warning about the coming debacle,
    The terrible catastrophe so close at hand which brought ruin to tens of thousands of decent people and nearly smashed Victoria.
    Bank assets rose from £41m in 86 to £63m in 91.
    Deposits grew from £31m in 86 to £40m in 91.
    After that they fell away and did not reach £40m until 1907, or 28 years later.
    I am writing of what I know because I went through that critical period on the inside in a finance company and in a property company as an executive officer, and when the panic stopped I was a member of the Stock Exchange.

    • the only disappointment is that he is rather coy about the relations parties at the various clubs that he frequented.

      • Reusa would approve:
        Chillagoe: QLD At midnight I was roused from sleep to go and meet a deputation in the ” dead-house ” up the yard. My reception had been carefully staged.
        There were 4 stark naked men standing silent, smiling, silly, but not berserk, on their heads in the 4 corners, and 3 more nude musicians playing the fiddle, concertina and Jews’ harp.
        My ” shout ” was 3 dozen bottles of beer at 1s/6d, a piece.
        Then came along another huge chimera, known to the public as the Chillagoe Copper Mines and Railway Company, a venture blessed with the patronage of some very big personages in the mining world.
        And lo ! Ben Adhem’s name led all the rest.
        Paris :France Was taken to a supper at the Cafe Americain once, perfectly decorous and quiet, at which the gentlemen were dressed in evening clothes of the finest make and the 4 lady guests wore nothing.
        The can-can, or high kicking quadrille, was then a feature at the Moulin Rouge and at the Bal Bullier danced by professionals. Restaurant Harcourt was a lively rendezvous for the students, and there were a dozen brasseries near by where the patrons were artists, students and midinettes, lively, jolly and not vulgar

  4. Now, the wrap up of the Lion prang
    “the crews were insufficiently trained to deal with a simple instrument malfunction on a VFR day.”
    WW agree.
    Now what is the latest on the runaway train??

      • Very Astute MrB
        Something has dramatically changed
        this time last year no one gave a rats arse about veterans. Less than a rats arse
        now everyone is all over veterans like a rash
        my call is some veterans groups some where have directly threatened the govt.
        (there are any no of countries which will not allow their military to practice military drill in case the military stages a coup.)
        next what may have occurred is that social media has highlighted the failures of past military ventures and directly attributed the shortcomings of the politicians and the military commanders
        Maybe the current politicians have some inkling that their ??? cant fnd the words, is so outside the bounds of good practice, that no one will support them and probably would oppose them.
        and maybe that all the worst side of human behaviour is being displayed by those who would intend others go to battle for them, that no one is putting their hand up to take part in the military.
        You have to have a war memorial and regional shrines.
        but you also have to have access for the public to be able to independently assess and review how come all those good diggers went off to battle never to return. Many lost to history altogether.
        We have to have a military and we have to have hardware and we have to have the best hardware, not like the rubbish our soldiers were issued with in the past.
        But where are you going to get the forces,
        No one would be stupid enough today to have anything to do with the military, so there is the problem.
        this in my opinion is what is going on, an attempt to mesmerise the young and inexperienced to join the forces.
        but, every conflict strayans have ever been involved in has to have the real true story made available and then anyone who wished to participate is directed into a new mercenary militia, non govt controlled, which operates like the security forces in say Afghanistan, and is valued and reimbursed at current business rates.
        Those in the population who wish to participate can be as the US Minutemen.
        Something is going on??

  5. The train, was hauling 280 fully loaded iron ore wagons, took off unexpectedly after the driver stopped the train and left the cabin to inspect an issue with one of the wagons.
    It then travelled almost 100 kilometres across the Pilbara in around 50 minutes before being derailed by remote operators based in Perth.
    “very swift thinking” of the remote operators based in Perth forced the derailment. “
    “So they threw the points at a time when they knew it was moving quickly to derail the train and stop if before it damaged anybody.

    • truthisfashionable

      Ahh, most of the reports lead with ‘driverless train’, and people are interpreting that to mean it was (at least partially) autonomous.

      Where as the truth seems to be it was a regular train, and it left without its driver, thus driver-less.

      This explains why it couldn’t be remotely slowed/stopped and they had to derail it using the switching point on the tracks.

      So, don’t worry future Sydney metro users, this one is not comparable.

      • It seems to be a very long story
        Bogan tells us the driver stopped the train(at the instructionof the operators in perth
        due to a mechanical mal function
        then the driver left the cab and spent the next hour or so applying the manual brakes on the next 60 wagons from the locomotives,
        before the train ran away.
        so maybe the train had issues with braking and the intention was to park it up until maintenance arrived
        even so if that story s correct,
        the driver spent an hour maybe 2 hours applying the manual brakes on 60 wagons.
        BHP should be upfront with shareholders, about what occurred or it this the same strategy as Samarco?
        Deceit. then Class actions.

  6. Australian John McLean is the latest climate scientist to shine a light. His audit found the main ¬global temperature set used by climate models exaggerated warming and was not fit for global studies. Fahrenheit temperatures were recorded as Celsius, longitudes and latitudes were in error, crude adjustments were unexplained and place names were misspelled. Tropical islands recorded a monthly average of zero degrees, a place in Romania averaged minus 45C for a month and a site in Colombia for three months recorded an impossible 82C.

  7. LNP senator plays hangman with self!

    You would think the stench of property developers and political donations generally would make one pause, but no, they cannot help themselves.

    From today’s Oz: “Overrule ‘devious’ cash ban, says LNP senator”

    “Queensland’s ‘devious’ political legislation banning property developer donations is likely to damage the federal government’s chances in the battleground state at the next election and needs to be overruled, LNP senator James McGrath says.

    Federal parliament is set to discuss new legislation banning foreign donations to political parties in the next few sitting weeks.

    The Coalition wants to include clauses giving federal political funding regulations primacy over state laws.

    The Queensland Labor government has introduced changes to ban donations from property developers, with the electoral commissioner being responsible for defining who should be blacklisted.

    In calling for the clauses to be in included in the political donation laws, Senator McGrath said the state laws could get in the way of a Coalition victory … ‘I guess it has come out of Queensland that state Labor have brought in a law that is offensive on so many levels in terms of how it impacts upon the Liberal National Party and the Liberal National Party’s ability to campaign in federal elections’. “

    Thanks James!

  8. Ruth Bader Ginsburg fractures another three ribs:

    As explained before the election, the important battle was always going to be the battle for the Senate.

    Will the US return this this:

    (Also note the BBC’s implicit bias. “The justice’s recent fall has once again sparked concerns for her health and worries about the prospect that the Supreme Court could tilt even further to the right.” I take no sides on this issue, but it is interesting to note that Zurcher might just as easily have written: “The justice’s recent fall has once again sparked concerns for her health and hopes about the prospect that the Supreme Court could tilt even further to the right.” )

    • Stephen – I think you are extrapolating a tad. I take it from that comment in the article that the presumption by the Beeb is that a balanced court is better than one leaning in any particular direction. Surely not everything has to be tribal.

      • a) The BBC never had such “worries” when it was tilting the other way.

        b ) As Zelman Cowen (supposedly) remarked whenever told of a supposedly “impartial” panel, “Impartial on whose behalf?”

        p.s. I myself don’t favour a right-wing Court. The only benefit it might have is to convince the “Progressives” – who have long seen it as a way of imposing their policies on everyone else – that there is a danger of the “other side” gaining control. In the long run, political decisions are best made democratically or by politicians, not by Ivy League lawyers dressed in black robes, sitting in a marble temple.