Links 19 May 2020

Global Macro / Markets / Investing:





Leith van Onselen



    U.S. homebuilder confidence rises in May … Reuters / Yahoo Finance

    WASHINGTON, May 18 (Reuters) – Confidence among U.S. single-family homebuilders rose in May, potentially signaling that the worst of the economic downturn was probably over as the country gradually reopens after lockdowns to slow the spread of the novel coronavirus. … read more via hyperlink above …
    … Unlike Australia and New Zealand with grossly overpriced serviced lots, the median price of U.S serviced lots is about $US50,00 … allowing substantially more affordable housing to be built …

    Lot Values Hit Record Highs (median now $US 50,000 ! )…Natalia Sineavskaia… U.S National Association of Home Builders

    • In contrast …


      New Reserve Bank figures show that household debt to income ratios continued to blow out right up till the lockdown – and first home buyers were in the frontline … David Hargreaves … Interest Co NZ

      Probably encouraged by the fairly strong upswing in the housing market at the start of this year, the first home buyers were increasingly gearing themselves up to get into their own homes.

      The latest Reserve Bank figures on residential mortgage lending by debt-to-income ratio (DTI) show that the FHBs were continuing to borrow more money on high debt-to-income ratios right up to the March lockdown. … read more via hyperlink above …
      … Following Ireland’s 2007 housing crash, that sent all its Banks to the wall requiring 70 billion euros of bailouts, subsequently the Central Bank of Ireland generally capped mortgage lending at 3.5 times annual household incomes. Access background research which found excessively high multiple lending caused the greatest destruction …

      Mortgage Measures – Central Bank of Ireland

  2. Seems a somewhat successful vaccine is coming soon, the drama of corona wrapping up?
    The market in U.S. going up?!

  3. migtronixMEMBER

    Man covid is the best. First buzz feed folds now some garbage 10Daily is dead and hopefully abc life and The Australian next. Apparently when people don’t have to pretend to work they don’t spend time reading that crp…

  4. Queensland border closure could remain in place until September, Premier warns – ABC

    Is Australia a country or not? What’s the point of having federal government when a person cannot even move from a state to a state?

    • Doing the opposite of what you suggest is pretty good governance doc. Imagine your embarrassment if Moderna’s vaccine works!

    • migtronixMEMBER

      To take your money and give it to billionaires who are exempt from restrictions. Like I’ve always been saying, it’s skippy and lefties that lie…

      • Too bad the dominate economic imperative under pinning neoliberalism is a right wing thingy ….

        I favored Sanders, supported Occupy wall st, against corporatism, for strong regulatory state function in markets …. you know all the things you have been against since I’ve known you.

    • If she keeps the cockroaches out, they should win the next election in a canter. Imagine being able to enjoy the beauty spots of your own neighbourhood without a horde of Mexicans, Sydney spivs and other foreigners. Open the motels now so we can have one last enjoyable trip before the barbarians return !

      • that’s so idealistic and nice view, but unfortunately a fairytale …

        tourism contributes (directly and indirectly) 8% of GSP and in coastal areas that’s more like 30% or even 50% …
        Gold Coast gets 10k per capita directly from tourism, without it it’s going to hit 30% official unemployment ….
        I wonder how is she going to win any vote in that case

        the only way QLD can survive is by attracting domestic tourists from Syd and Mel … otherwise QLD is doomed

        • I doubt many of these businesses are Qld businesses……probably Mexicans risking their super jacking up the strata fees on jerry built tower blocks that we will have to fix for them. Most are staffed by overseas sourced slave labour. Also we really don’t want our children bought up to bow and scrape. These are a net drag on Qld.

    • Pluckaduck’s been able to do what no other Queensland Premier’s been able, including the ardent secessionist Joh “what brown paper bags?” Bjelke-Peterson and that’s to close the boarders with the rest of Australia. Can’t wait for the secessionist movement to really fire up.

    • macaroni jewelerMEMBER

      NSW has suppressed it’s CV19 cases, for now. It’s a wise decision for any other state to wait a few weeks after NSW & VIC open up their schools and shops fully, as there is likely many undetected asymptomatic people about to go forth and spread.
      QLD, WA, NT, SA aren’t as needy for foreign visitors.
      NSW & VIC want everyone nationally to rush back to open borders and foreign house buyers/ students.

  5. S &P up 3% overnight. Looks like I was wrong. Seems insane, but there you are.

  6. reusachtigeMEMBER

    It is great that kids are finally going back to school where they belong. It comforts me to know that wherever my Australian kids are they’ll be learning social skills again and building their relations channels.

  7. Though an enthusiast of reason, I believe that rational choice theory has failed abysmally, and it saddens me that this failure has brought discredit upon the very enterprise of serious theorizing in the field of social study …

    Rational choice theory is far too ambitious. In fact, it claims to explain everything social in terms of just three assumptions that would hold for all individuals in all social groups and in every historical period. But a Theory of Everything does not explain anything in particular … And being unable to account for differences among individuals and for the variety of social interactions, systems, processes, and institutions, the theory is bound to be unrealistic, i. e., false …

    The reader may feel that my criticism is excessive: that I am throwing the baby out along with the bath water. My reaction is that there is no baby … It died long ago from mathematical anemia, from deficiency in the enzymes required to digest the simplest social facts, and from lack of exposure to the sound and light and fury of the social weather.

    Most mainstream economists want to explain social phenomena, structures and patterns, based on the assumption that the agents are acting in an optimizing — rational — way to satisfy given, stable and well-defined goals.

    The procedure is analytical. The whole is broken down into its constituent parts so as to be able to explain (reduce) the aggregate (macro) as the result of the interaction of its parts (micro). Building their economic models, modern mainstream economists ground their models on a set of core assumptions describing the agents as ‘rational’ actors and a set of auxiliary assumptions. Together these assumptions make up the base model of all mainstream economic models. Based on these two sets of assumptions, they try to explain and predict both individual and social phenomena.

    The core assumptions typically consist of completeness, transitivity, non-satiation, expected utility maximization, and consistent efficiency equilibria. – Snip

    File under burning bushes …

      • So considering it underpins everything that has happened regardless of political party or anything else in setting up our currant environment and the inability to deal with stuff that was known some time ago …. its wgaf – ????

        Then some point at others and say stoopid people did it …. fill in blank to preferred scapegoat[s.

          • OK, sorry for my bad mood, unrelated to the issue at hand.
            So far as rational choice goes, it’s an academic concept that probably always was a fudge factor, and was written off by (ahem, rational) people decades ago.
            I don’t disagree with your thesis that economics is just a cloak to cover up dastardly acts.