Houses and Holes

12

Kouk: Budget surplus falling apart

Via the Kouk today: Word has it that the framing of the budget, due to be handed down by Treasurer Josh Frydenberg the day after April fools day (and around 6 weeks before the election), is more problematic than usual. Problematic because there is some mixed news on the economy that will threaten the current

1

Piss weak wages growth about to weaken!

Via Damien Boey at Credit Suisse: In an article last year (“Desperately seeking wage inflation”, dated 20 February 2018), we introduced our proprietary wage tracker. Using data from the NAB business survey on labour costs, wage claims from enterprise bargaining agreements (EBAs), and male full-time equivalent employment as a share of the “active” labour force,

51

Minack Australian recession call goes mainstream

Via the AFR, only a week late: The economy is at risk of a “doozy recession” as the housing downturn accelerates at an “alarming pace” weakening consumer sentiment, warns former Morgan Stanley global strategist Gerard Minack. Mr Minack, who is known for calling the global financial crisis, said a recession would drive cash rates to

14

90-day mortgage arrears hit record high

But records are made to be broken. Via S&P: Australian Prime Home Loan Delinquencies Rose In December; 90-Plus Days Arrears Hit Record High MELBOURNE (S&P Global Ratings) Feb. 20, 2019–Australian prime home-loan  arrears rose in December, according to a recently published report by S&P  Global Ratings. The Standard & Poor’s Performance Index (SPIN) for Australian 

6

Treasury genius demands housing led recession

From Treasury genius Phil Gaetjens this morning: Treasury Secretary Philip Gaetjens has warned that “falling house prices could also cause consumer spending to be weaker than forecast” and said “care must be take” on mortgage broker reforms. Mr Gaetjens told an estimates committee that government needed to remain fiscally disciplined at a time where debt

32

Robb, Carr cut Chinese dough and run

Via Domain comes another signal of a step change in the milieu of Australia/China relations: Former trade minister Andrew Robb has quietly ceased his controversial $880,000 per annum consultancy with a company closely linked to the Chinese government, as the deadline looms for lobbyists for overseas state interests to sign up to Australia’s new foreign influence

13

Scummo pawns Aussie soft power to TV oligarchs

Fair dinkum this government is corrupt, via the ABC: Australia has a new strategy to win over its Pacific neighbours: reality television. The Government has framed it as a soft power push that will lift Australia’s profile by beaming top-rating programs into Pacific nations. Australia will plunge billions of dollars into projects across the region

1

Westpac leading index continues to fall

Via Westpac: • The six month annualised growth rate in the Westpac– Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, fell from –0.29% in December to –0.43% in January. As discussed last month, despite some choppiness, the major trend is consistent

37

Fake Greens headed for ballot box doom

Via The Australian: The Greens face an electoral backlash as voters concerned about climate change and asylum-seekers — and enticed by Bill Shorten’s softer policy agenda — refuse to shift their support to a minor party beset by dysfunctional campaigning and infighting. Private polling from the major parties shows the Greens’ national vote remains below

11

Bureaucratic RBA minutes blinded by detail

Via the RBA come minutes: International Economic Conditions Members commenced their discussion of the global economy by noting that growth in Australia’s major trading partners had been above trend, despite moderating in the second half of 2018. Growth in major trading partners was forecast to be around trend in 2019 and 2020. However, the downside

0

UBS: Profits season holding up

Via UBS today: Reporting season has been better than feared. To date, the 1.2 ratio of beats-to-misses has been only modestly below average, while company guidance has been surprisingly resilient, with more outlook upgrades than downgrades. Despite companies remaining generally optimistic on the outlook, 61% of companies have seen downgrades to FY19 consensus EPS estimates

42

Village idiot RBA whines about contracting gene pool

Via The Australian: The Reserve Bank has called on education authorities to help ­arrest the sharp decline in the number of senior students in NSW studying economics, by ­elevating the status of the subject within the curriculum. Once the third most popular subject choice for Year 12 students, economics enrolments have plummeted over the past

9

Canberra does boats as China launches cyber war on Parliament

Via The Australian: An international cyber hunt ­involving Australian, US and British intelligence agencies has been launched in response to an attack on the Australian parliament and the major political parties using a form of sophisticated “tradecraft” that had not been detected before. While the source country has not been identified beyond doubt, intelligence officials

12

A shining example of Chinese student risk

Via FTAlphaville: A recent petition at a University of Toronto campus drew on a familiar rhetorical strain. Students felt “offended and hurt”, and believed it was their “obligation to protest”. The petition, which attracted over 11,000 signatures, had little to do with domestic politics. Instead, the signatories objected to the election of a student union president of

13

UBS: Foreign property bid has collapsed

Via UBS’s excellent George Tharenou today: The Foreign Investment Review Board released data for 17/18. The value of approvals to buy housing collapsed 58% y/y to $13bn in 17/18, the lowest level since 09/10, after already slumping 59% y/y to $30bn in 16/17. After a ‘super boom’ of 322% from 12/13 to the record $72bn

31

Angry China singles out Aussie coal for pain

Via Reuters: Chinese coal traders are halting purchases of Australian coal and coking coal as clearing times through China’s customs have at least doubled to 40 days or more, four traders at major buyers told Reuters on Monday. The traders said only cargoes from Australia, the biggest supplier of the fuel to the world’s top