Houses and Holes

1

Australian dollar hammered as RBA goes full Bernanke

The Australian dollar has been hit this morning: Bonds are tearing it up: XJO is stalled: Why? This from the RBA’s Michelle Bullock in a supposedly reassuring speech about house prices: Currently, the risks here appear to be elevated but contained. But, of course, this is eerily similar to another central banker in 2007, Ben Bernanke:

2

RBA guides CFR towards house price crash

The RBA is at it again at the Council of Financial Regulators which met yesterday: At its meeting on 15 March 2019, the Council of Financial Regulators (the Council) discussed systemic risks facing the Australian financial system, regulatory issues and developments relevant to its members. The main topics discussed included the following: Financing conditions and

18

Is Australian property the next Ireland?

Via News: Australia could be the “first domino to fall” in a global economic crisis for the first time in its 200-year history. That’s according to economist John Adams, Digital Finance Analytics founder Martin North and Irish financial adviser Eddie Hobbs, who argue Australia’s economy is looking increasingly similar to Ireland’s prior to the 2007

2

Trade doubts sink Australian dollar

DXY was weak last night as EUR and CNY firmed: AUD was nonetheless down the board: Gold was firm: Oil stable: Metals lifted: So did miners, expect BHP and RIO which fell on Vale’s good news: EM stocks are poised for breakout on dovish Fed: EM junk is already there: Treasuries and bunds fell: Stocks

62

Kernel of lunacy: RBA stokes inflation panic

Yes, it’s inflation and, like some creature from the black lagoon, it is emerging from booming wages, via the AFR: Reserve Bank assistant governor Chris Kent says bond markets are underestimating the risk of wages growth stoking higher inflation, as long-term Australian bond rates fall towards historically low levels. …”What we have had here is

22

Mad Macquarie kills Bank of Mum and Dad

Via the AFR: Macquarie Bank is axing popular “Bank of Mum and Dad” financing and borrowing for self-managed super fund investment property as it continues to overhaul its residential property operations. The bank, which recently announced it was no longer underwriting new “home-branded” loans for several household-name lenders, stopped offering family loan guarantees on Monday

5

Gas cartel rorts ACCC

The ACCC was out with its LNG net-back price yesterday: It’s calculations for net back are higher than mine largely because of this: For a given measure of Gladstone FOB prices in A$/GJ, the next step in the calculation of netback prices is to deduct LNG plant costs. For this, the ACCC has used estimates

11

Westpac: RBA on track to cut

Via Bill Evans at Westpac: The Minutes of the March Reserve Bank Board meeting emphasise the Board’s uncertainty around the slowdown in output data while labour market data remains robust. In the final paragraph of the section on the policy outlook, the Board noted “they assessed that it would be appropriate to hold the cash

1

Australian cities crash down global cost of living index

Via The Economist Intelligence Unit: The Economist Intelligence Unit (The EIU) today launches the latest findings of its Worldwide Cost of Living Survey. Here are the findings for Australasia. Weaker local currencies have pushed all five Australian and two New Zealand cities surveyed down in the ranking. While Asian cities have largely risen in cost-of-living terms, many

24

Rise of the secondary job

Some nice work from Greg Jericho: 2018 saw a surge in people working in secondary jobs that has led to the first time there being more than one million people working multiple jobs. The surge was most pronounced in the last half of 2018 where 30% of the new jobs created were going to those

9

Will Australia allow Shell to eat it?

Because that is its plan. The ACCC confirmed yesterday that the gas cartel is still taking the major piss, via The Australian: Gas prices on Australia’s east coast are set to fall this winter, potentially providing some relief to long-suffering manufacturers and heavy industry, according to data from the competition watchdog. Domestic gas prices may

76

UBS: Get ready for sub-1% RBA

Via the excellent George Tharenou at UBS: For the RBA outlook, given the limited policy firepower at a 1.5% cash rate, & our deep dive showing banks likely won’t pass on the full reduction, to make cuts more effective, the RBA should communicate a ‘dovish easing’, with a commitment to further ease if required to

9

China “avoiding” Aussie coal

Via Credit Suisse: The price of Australian thermal coal sold to China (5500kcal high-ash) is being hit relative to competitors, at odds with assurances by the Chinese and Australian Governments that there is no ban on Australian coal at China ports. Whether there is a ban or just restrictions, the price suggests importers are not

1

Trump/XI meeting shunted again

The God King’s diary is guiding global markets, via SCMP: A meeting between US President Donald Trump and Chinese counterpart Xi Jinping to end the trade war may be put back to June, sources have said, as they will not be able to finalise an agreement by April. It had initially been hoped that they

2

Labour force preview

Via Westpac: Total employment lifted a solid 39.1k in January, well clear of the market median of 15k. The year started with a solid trend pace of employment growth with a three month average gain of 31.9k. While it is just one month into the year, employment has gained 271k in the year to January

4

Deloitte: Budget windfall to be brief

Via Deloitte: The economy is getting worse, but the Budget’s getting better. That’s unusual:  people think politicians drive the Budget, but it’s almost always the economy in the driver’s seat. So it is undeniably bad news that the economy has been taking a few hits since the Budget update was issued ahead of Christmas. It’s hard to pick up a newspaper without getting depressed:  global

26

Melbourne’s McMansion mushroom cloud darkens

At the end of 2017, it became apparent that Melbourne’s house and land market had become an giant bubble after the median price for a housing lot hit $318,500 – up 31.5% in only 12 months. In mid-2018, we learned that that Chinese developers had taken control of Melbourne’s land supply pipeline, driving-up prices even further: Chinese developers have

1

Labor mulls wage rises for only the poorest

The wages war rages on with more good material from the suddenly less Fake Left over the weekend. Mike Seccombe at The Saturday Paper: Back then Tony Abbott’s chosen employment spokesman, Eric Abetz, led the scare campaign, doing his very best to talk up the threat of an economy-wrecking wages breakout. He was never clearer than