Houses and Holes

24

Full time jobs down again

  MAY KEY POINTS TREND ESTIMATES (MONTHLY CHANGE) Employment increased to 11,444,200. Unemployment decreased to 588,400. Unemployment rate steady at 4.9%. Participation rate steady at 65.6%. Aggregate monthly hours worked increased to 1,602.5 million hours. SEASONALLY ADJUSTED ESTIMATES (MONTHLY CHANGE) Employment increased 7,800 (0.1%) to 11,440,500. Full-time employment decreased 22,000 to 8,027,100 and part-time employment

23

China’s great iron ore pile

I won’t lie, the iron ore price has been making a goose of me for almost two years. At various points my forecast for big falls has almost been right but in total I have been clearly wrong. My prediction has been frustrated by tear away fixed asset investment in China, new market dynamics and

11

Global energy amusement

On the day that OPEC trashed Ben Bernanke’s greatest hope of a bounce in the US economy, we offer the following global energy roundup from BP, chock full of interesting detail on production and consumption of oil, gas and coal. Makes for hours of scary reading! (h/t Zero Hedge)

35

June 9 links: Iron ore glut

Up: $US, ore, grains, energy, CRB Down: gold, metals Crushed: euro, Aussie OPEC fights, oil leaps. FT Sovereign contagion: Ireland, Portugal, Spain, Italy, Belgium, Greece Greek CDS hit record on bailout hurdles. Zero Hedge Useless economists. FT US housing in April. Calculated Risk Aussie to fall. WSJ And it sure did… More flexibility for yuan. China Daily Asia braces for QE3. Bloomberg Not here. US profits and stimulus. Alphaville

24

Lurching

The reasons behind the RBA’s decision to leave interest rates unchanged yesterday have largely been ignored in today’s commentary. The radical alterations made to the accompanying statement have been overlooked, lied about or dismissed. Instead, pretty much to a man, media and bank economic commentary has stuck to its so far completely wrong assessment that

21

No milky wilkies

Below find the full text of Chairman Bernanke’s speech this morning. No comfort here for markets. The upshot? No milky wilkies until you waaaaiiil… Chairman Ben S. Bernanke At the International Monetary Conference, Atlanta, Georgia June 7, 2011 The U.S. Economic Outlook I would like to thank the organizers for inviting me to participate once

3

June 8 links: Goin’ nowhere

Down: $US Flat: Aussie, gold, metals, grains, energy, CRB, ore Up: euro Sovereign tension: Ireland, Portugal, Spain, Italy, Belgium, Greece European fallout Kenneth Rogoff BLS job openings decline in April. Calculated Risk Rail traffic slowing. Money Game Who’s on the hook hook for PIGS debt, insurance? Calculated Risk China’s emormous bailout. Zero Hedge, Alphaville Hong Kong housing slows. Bloomberg Natural gas many miles from global pricing. FT Road

40

Bullhawks vanquished!

After the frighteningly hawkish SoMP and minutes from last month, it appears the RBA has done a straight one-eighty and presented us with an extraordinarily dovish Statement. Let’s pull it apart: At its meeting today, the Board decided to leave the cash rate unchanged at 4.75 per cent. The global economy is continuing its expansion, led

12

RBA holds

Statement by Glenn Stevens, Governor: Monetary Policy Decision At its meeting today, the Board decided to leave the cash rate unchanged at 4.75 per cent. The global economy is continuing its expansion, led by very strong growth in the Asian region, though the recent disaster in Japan is having a major impact on Japanese production, and

37

Will the US economy bounce?

There is a wealth of debate surrounding the US economy at the moment. The basic tenets of the debate can be summarised as bulls arguing that the current slowdown is the result of high oil prices whacking consumers and the Japanese tsunami whacking production. Bears are arguing there is a structural problem that these shocks

12

June 7 links: Pause or end?

Up: $US, gold, metals Flat: Aussie Down: euro Smashed: grains, energy, CRB Sovereign tension: Ireland, Portugal, Spain, Italy, Belgium, Greece UN calls for regulation of food speculators. Guardian Greek default gains momentum. WSJ Leaving the euro. John Dizard Rebuilding US manufacturing. Seattle Times (h/t Naked Capitalism) US slowdown is temporary. SocGen Gas and Japan smacked US consumers. Money Game Withering demand. The Big Picture US is circling

54

The new economic glossary

Regular readers will know that I am in the process of building a new glossary of terms to help describe Australia’s dramatically evolving contemporary economy. I’ve just added another today and it suddenly occurred to me that it is time to make it official. Here is the whole dictionary thus far: Politico-housing complex The great public/private

29

ANZ job ads whacked

ANZ job ads for May are out and got thumped. As usual, the accompanying commentary comes with the rhetoric of boom ahead. I think it’s about time we called this what it is: Futureboom. The worse the data, the bigger the Futureboom, it seems: Total job advertisements on the internet and in newspapers decreased by 6.5% inMay to

16

May inflation – nothing to see here

  Below find the full text of the May TD Securities, Melbourne Institute inflation survey. The TD Securities – Melbourne Institute Monthly Inflation Gauge rose by 0.2 per cent in May, following a 0.3 per cent rise in April and a 0.6 per cent rise in March. In the twelve months to May, the Inflation

40

Boozing with central banks

In mid to late 2007, I had a couple of beers with a very impressive individual who had just returned from a rather important US Federal Reserve conference. Apparently, the conference had been abuzz with discussion and dark rumour of an ensuing economic accident. My drinking partner told me that there was a distinct possibility

6

June 6 links: Below trend

Principal reductions. Reuters So overdue… 2010 vs 2011 US labour. Calculated Risk Week ahead for the Dow. Calculated Risk China car sales tumble, inflation to rise. Zero Hedge Fed in a box. WSJ The 2% economy. Time Earth to Battellino. Global recovery is slowing. Fast. NYT, Gavyn Davies The calm before the volatility storm. Alphaville

21

Weekend reading: The mistake of 2010

Smashed: $US Up: euro, gold, metals, Aussie, CRB Mixed: grains, energy This action shows a market betting on QE3 sooner not later… Sovereign easing: Ireland, Portugal, Spain, Italy, Belgium, Greece US jobs for May bad. Calculated Risk, Free Exchange But ISM services accelerate. Calculated Risk ECRI WLI falling but not fast. Seeking Alpha The mistake of 2010. Paul Krugman Move over

1

Services activity insipid

The AIG PSI (which tracks services economy activity) for May is out and shows a struggle on Main St: KEY FINDINGS ■ Activity levels in the services sector eased slightly in May, following a solid increase in April.The latest seasonally adjusted Australian Industry Group/Commonwealth Bank Australian Performance of Services Index (Australian PSI®) fell by 1.6 points

36

Commodities crash brewing

So, the game of QE3 is afoot. Let’s begin with an excerpt from John Hilsenrath of the WSJ: Federal Reserve officials are in no hurry to respond to recent indications U.S. economic growth has hit another soft patch, despite chatter in financial markets that the Fed might start a new program of U.S. Treasury-bond purchases

4

June 3 links: Will they or won’t they?

Up: euro, Aussie, grains, energy Down: gold, $US, metals, CRB Sovereign tension: Ireland, Portugal, Spain, Italy, Belgium, Greece Trichet calls for fiscal integration. Bloomberg EU shifts a millimeter that way. Reuters Debt ceiling fallout. Paul Krugman (h/t NakedCap) Moody’s mulls US downgrade. Alphaville BLS preview. Calculated Risk Commodity financialisers make hay. WSJ China downturn would cut 60% from commodities: S&P. Reuters No shit… Fed rebuffs market. WSJ

1

Trade surplus steady

ABS International Trade for April is out. Not much of a surprise with an ongoing strong surplus: APRIL KEY POINTS BALANCE ON GOODS AND SERVICES The trend estimate of the balance on goods and services was a surplus of $1,557m in April 2011, a fall of $47m on the surplus in March 2011. In seasonally adjusted

14

Commodities hit new record

Missed this one yesterday. From the RBA’s Index of Commodity Prices: Preliminary estimates for May indicate that the index rose by 2.3 per cent (on a monthly average basis) in SDR terms, after rising by 7.3 per cent in April (revised). The largest contributors to the rise in May were increases in the estimated export prices of

52

QE3 chicken

Breaking news! Last night, Federal Reserve Chairman, Ben Bernanke, announced he is pregnant.  A glowing Bernanke told a packed press conference that the child was neither a girl nor a boy. It was, in fact, a third round of quantitative easing. The child is expected to be born before the year is out. Don’t say

17

Getting so much poorer all the time…

From yesterday’s National Accounts, here’s a stab at explaining why, despite the ongoing growth in the economy (ignoring the March quarter hiccup), there are so many folk that are clearly feeling the pinch. First, a graph of real gross national income: A few observations here. First, that extraordinary dip in 2008 looks like the way

15

June 2 links: QE3 dawn

Up: gold, $US Down: euro, Aussie Smashed: CRB, energy, metals, ore, grains Sovereign tension: Ireland, Portugal, Spain, Italy, Belgium, Greece US ISM smashed in May. Calculated Risk ADP employment report crunched in May. Calculated Risk US rising rents. Tim Duy Now Ireland goes for haircuts. FT Eurozone endgame. Martin Wolf China may assume local debts. Businessweek Four banks control 85% of OTC derivatives. London Banker

5

Manufacturing slides away

Last month the AIG PMI  showed a hint of improvement suggested light at the end of the tunnel for manufacturing. Sadly, this month, it’s ugly. The RBA has its adjustment going just fine already. Manufacturing activity remained in negative territory in May with the seasonally adjusted Australian Industry Group-PwC Australian PMI® down slightly by 0.7 points to 47.7

51

Relative optimism

Today I’m going to take issue with a couple of my fellow bloggers. I’m going to be optimistic, in a real sort of way. I write often on Dutch Disease, which is a very real problem and, in my view, poses a serious threat to our prosperity in the long term. This, however, can sometimes

5

June 1 links: Garnaut

Up: CRB, energy, euro Flat: gold, Aussie, metals, ore Down: $US, grains Sovereign easing: Ireland, Portugal, Spain, Italy, Belgium, Greece New Greek bailout. Alphaville Food to double by 2030. BBC US PMI tanks. Calculated Risk US housing still dumping. Calculated Risk US consumer confidence hammered. Naked Capitalism Inflation will prevent QE3. Zero Hedge QE3 will nationalise the ten year. Zero Hedge Fed still set to tighten. Tim Duy

10

Credit flat

The RBA credit aggregates for April are out and show litttle change from the 30 year lows in mortgage growth rates. Business credit has stalled again and personal credit remains weak. Total credit provided to the private sector by financial intermediaries was flat over April 2011, after rising by 0.6 per cent over March. Over the