Houses and Holes

1

China to cut growth target

Via Reuters: China plans to set a lower economic growth target of 6-6.5 percent in 2019 compared with last year’s target of “around” 6.5 percent, policy sources told Reuters, as Beijing gears up to cope with higher U.S. tariffs and weakening domestic demand. The proposed target, to be unveiled at the annual parliamentary session in

45

Opal Towers “tip of the iceberg”

Via The Guardian: The senior bureaucrat who reviewed building regulation for the New South Wales government has condemned the lack of action on his 2015 report, warning the defects in the Opal Tower at Sydney’s Olympic Park “are likely just the tip of the iceberg”. Michael Lambert, the former secretary of NSW Treasury, was commissioned

40

Unions attack the wrong wages crush

Via The Australian: Unions will use a seven-day strike next week to intensify pressure on the Coalition and business over the “exploitation” of labour-hire workers, declaring public unrest at employer conduct will be a “vote-shifter” at the federal ­election. The Construction Forestry Maritime Mining and Energy Union yesterday revealed workers at the Wollongong Coal-owned Wongawilli

6

Why is the market obsessed with quantitative tightening?

Via Damien Boey as Credit Suisse: In recent articles, we have talked about the tail risks from central bank balance sheet reduction globally. Overnight, we have seen central bankers wax and wane in their positions:   After suggesting recently that balance sheet reduction need not be on “auto-pilot”, Fed Chair Powell has come back saying that

24

Virgin hikes mortgage rates

Drip, drip, drip: “The decision to increase interest rates is never easy. “We have absorbed higher funding costs for the last twelve months in order to delay the impact for our home loan customers. Unfortunately, funding costs remain high and are likely to remain elevated into the foreseeable future.” 20bps on front and back book.

8

What kind of fiscal stimulus should Treasury be readying?

The Australian economy is stalling as its key drivers sputter. Fiscal investment is plateauing as infrastructure hits a air pocket, via ANZ: There was a significant pull forward last year: Dwelling construction is about to crash: As house price falls power down: Which is also killing consumption, via CBA: Business investment is OK but capex

58

Luxury car sales swan dive

Via COMMSEC:  CommSec Luxury Vehicle index: For around a decade, CommSec has been tracking an index of luxury vehicles. Changes at the ‘top-end’ of markets – vehicles, houses and other assets – have tended to lead activity more broadly. We update the latest trends in luxury vehicle sales.  Luxury vehicle sales: The CommSec

23

So that’s why the ABC loves mass immigration

So that it could pump us coolies for all we’re worth, via The Australian: Embattled public broadcaster ABC has underpaid up to 2,500 casual employees over the past six years. In a statement on the ABC website, the corporation said it “recently identified that some casual employees have been underpaid.” “A detailed review is underway

33

FT: Aussie house prices highest risk of crash in G10

Via the FT today: Free iPads, rental guarantees and an eye-watering A$100,000 ($72,000) off the price of an apartment are some of the sweeteners on offer from property developers amid the worst housing downturn in Australia for 35 years. … according to Morgan Stanley, which warned this week the slump could torpedo Australia’s run of 27

2

Chinese inflation tanks

Chinese inflation for December is out and it’s adieu price pressures as growth fades: In December 2018 , the national consumer price rose by 1.9% year-on-year . Among them, the city rose 1.9% , the rural rose 1.9% ; the food price rose 2.5% , the non-food price rose 1.7% ; the consumer price rose 1.7% , and the service price rose 2.1% . In December , the national consumer price ratio was unchanged from

76

Mark Latham scythes into NSW election

Via The Australian comes Mark Latham campaigning in Western Sydney: …According to Mr Latham, the Berejiklian government’s much-vaunted “hi-tech Disneyland” ­vision for the area was another casualty of the state government’s “disastrous lack of planning” and its failure to manage the city’s migrant “population ­explosion”. …“If you can’t build a couple of tram tracks on the

16

L-plate Recessionberg crows about surplus as economy stalls

Via The Australian we get another glimpse of how far behind the economy are our illustrious leaders today: Josh Frydenberg says he will deliver a surplus budget before a federal poll, despite doubts cast on that commitment by a global ratings giant and the possibility of an early election. In contrast to the government’s December

25

Another retail chain shutters

Via the AFR: Beauty and home products retailer Crabtree & Evelyn is the latest retailer to fall victim to lower discretionary spending by under-pressure households, with restructuring experts KordaMentha appointed to close down the entire Australian network of stores. …The company has 12 stores across Australia in the country’s most prominent shopping centres…Rents for specialty

7

Is China readying “kitchen sink” stimulus?

Zero Hedge has some hints today: Over the weekend, when commenting on the latest rather disappointing RRR cut out of China (which would release just enough liquidity to offset liquidity drains via the MLP and repo) we pointed out another, far more important event which took place in late December, when traders were generally away on vacation,