Houses and Holes


Businessomics sets about destroying ScoMo

Overreach. It’s always fun to watch. Via the AFR: Prime Minister Scott Morrison has vowed to slash government red tape to unlock investment and opened the door to industrial relations reform, challenging business to make the case for change and to deliver “shared gains” for workers and employers. In his first major domestic policy speech


Another idiotic ‘Boomer versus Millennial’ housing debate

The AFR’s war on rate cuts took a new an ever more stupid turn on the weekend: Baby Boomers and Millennials are trading blows about who is responsible for deteriorating economic conditions that weaken their chances of home ownership or retirement security. Millennials allege profligate Boomers got a free kick from no university fees and


Pentagon launches China containment plan

Via Peter Jennings at ASPI: The United States is rapidly restructuring its military presence in Asia and rethinking how it could fight a major conventional war in the area which the Pentagon has identified as the ‘single most consequential region for America’s future’. This will have important strategic consequences for Australia. The Indo-Pacific strategy report released this


Westpac: Australian dollar will fight the Fed to fall

Via Westpac: For the FOMC, “uncertainties” now dominate At the June meeting, the FOMC’s stance on monetary policy shifted materially. While their core view of the economy remains positive, “uncertainties” now dominate. Beginning with the core view, it clearly remains constructive. The only real economy forecast to see material revision in June was the 2019


China can’t dump US debt

Via FTAlphaville: The pace at which China is selling its holdings of US Treasuries has accelerated dramatically since the beginning of 2018. Against the backdrop of the escalating US-China trade war and other protectionist measures, the move has sparked concerns that China is actively weaponising its position as the largest foreign creditor to the US government. The fear is


CBA flash PMI enjoys ScoMo pop

Via CBA: Flash PMI data for June signalled a further pick up in growth momentum across the Australian private sector. Output and new business both expanded at the steepest rates for seven months amid reports of firmer underlying demand conditions. Consequently, outstanding workloads rose solidly, leading firms to raise their staffing levels for the second


Angry APRA wet lettuce slaps Westpac

Yesterday we saw regulatory capture out in the open at the AFR: Westpac has unleashed a fresh wave of property lending by relaxing serviceability conditions on low risk home loans, immediately increasing the borrowing capacity of aspiring home owners by as much as 8 per cent. A spokesman for Westpac confirmed the policy change saying credit officers


Westpac slices off a head of APRA wet lettuce

Via the AFR: Westpac has unleashed a fresh wave of property lending by relaxing serviceability conditions on low risk home loans, immediately increasing the borrowing capacity of aspiring home owners by as much as 8 per cent. A spokesman for Westpac confirmed the policy change saying credit officers would now have the discretion to approve principal


Gas cartel is the sovereign risk, not Australia

Via The Australian: Australian energy producers have slammed a move by the Coalition to consider domestic gas reservation, arguing the interventionist measure wouldn’t lower prices for local users but would significantly increase the nation’s sovereign risk profile. …Cooper Energy, which is building the Sole gas project off the Victorian coast, said a reservation policy would


CBA: Second rate cut in July

Via CBA: Lowe signals another cash rate cut is imminent Following Lowe’s speech today we are now expecting the RBA to cut the cash rate in July rather than August. We expect another 25 basis point cut later in year, probably November, taking the cash rate to 0.75%. Once again, the RBA have emphasised that


Goldman launches US/China trade deal barometer

Via Goldman comes the market for anything: Given the assumption that the observed datapoints are normally distributed, barometer readings can be seen as the market-implied probability for a “trade deal” if one believes the historical highs (Jan 19) or lows (Mar 18) over the past 18 months are in fact reasonable representations of those outcomes.


Aussie banks run by psychos

Honestly, our regulators are the biggest pack of no-hopers, via the AFR: The psychologist inserted by the corporate regulator into boardroom discussions of more than 20 blue-chip companies including Qantas, Woolworths and AMP warns that Australia’s financial sector culture is broken. Elizabeth Arzadon, the regulator’s psychologist of choice, also warns that resistance by boards to


Vale mulls S11D expansion

Via BNAmericas: Brazil’s supreme court of justice has authorized local miner Valeto resume operations at its largest iron ore asset in Minas Gerais state, the 30Mt/y Brucutu complex. In a release on Wednesday, Vale said that the decision will allow the full resumption of wet processing operations at Brucutu within 72 hours, thus increasing the average


China is enjoying a little funding squeeze

Via Bloomie: China’s central bank has acknowledged its monetary tools are insufficient. The most powerful ones are proving too blunt to drill through a hardening financial system. The country’s money markets have been shuddering since regulators took over Baoshang Bank Co. last month, despite initial assurances from the central bank and other authorities that they would maintain ample liquidity.


Back in the USSR: How China saw the Hong Kong rebellion

Via Bloomie: As hundreds of thousands of protesters march in Hong Kong’s streets against unpopular China-backed extradition legislation, another battle is unfolding across Beijing’s Great Firewall. Photos and information about the biggest protests since the handover of the former British colony are being systematically wiped from China’s internet. Meanwhile, Chinese state media is pushing a