Houses and Holes


The powerless Fed

Markets sold off last night on the concern that Fed is not going to man the big QE3 pump. With good reason it seems, though there is still hope. We know that the dominant clique at the FOMC is concerned about inflation. However, in his speech overnight, Ben Bernanke made it clear, rightly, that the


The Chairman’s speech

Find below the full text of Chairman Bernanke’s overnight speech: Chairman Ben S. Bernanke At the Economic Club of Minnesota Luncheon, Minneapolis, Minnesota September 8, 2011 The U.S. Economic Outlook Good afternoon. I am delighted to be in the Twin Cities and would like to thank the Economic Club of Minnesota for inviting me to


September 9 links: Bernanke gloom

Rockets: $US, Treasuries, gold Flat: CCI, metals Down:  energy, grains, Euro, Aussie Creeping contagion: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year 10 Year Germany


Flipping the bird at NSW ‘austerity’

From the SMH today comes this story of union action against the O’Farrell government’s plans to limit pay rises: Unions are claiming victory in their campaign against the state government after an angry crowd of about 30,000 marched on State Parliament today. …The crowd of public sector workers, made up mostly of teachers, public servants,


More on labour hoarding

Find below HSBC’s and NAB’s take on today’s jump in unemployment. Both are even handed assessments on the unwinding of labour hoarding but also more sanguine than I am about the immediate trajectory for the jobless rate. Two reasons I can think of for the weakness concentrated in both WA and QLD. First, that’s where


More on unemployment

So, NSW lost 12,000 full time jobs, VIC added 17,000 but that was a give back for last month’s drop of 29,000 so over two months is down 12,000, Qld and SA dropped 2,000 and WA lost 5,000. Here’s a chart of the states unemployment rates: And here is what is about to become a


Unemployment jumps

The ABS August Labour Force report is out and the slide is on, with unemployment jumping in the month to 5.3%. The ABS details are below. More analysis to come… AUGUST KEY POINTS TREND ESTIMATES (MONTHLY CHANGE) Employment increased to 11,439,900. Unemployment increased to 620,300. Unemployment rate steady at 5.1% from a revised July 2011


Extinction is a crisis

Yesterday Deutsche Bank released a new report into Dutch disease and it makes fascinating reading. The report more or less follows the line put forth by the Canberra boffins, that manufacturing has been in long term decline and offers some quite useful charts. The report concludes the following (with comments): Manufacturing is in long-term decline,


Gooooooo GOP!

I would like to able to report this morning that US economic leadership has reached a rapprochement. That both Treasury and the Federal Reserve have agreed a new round of stimulus measures that aim specifically to create US jobs and reverse the decline of its middle class through a sensible balance of medium term spending,


September 8 links: Inflationista

Rocket: energy Up: Euro, Aussie Flat: ore, CCI Down:  grains, metals Smacked:  $US, Treasuries, gold Core relief, periphery pain: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year


GDP double takes

Here are some more analyses of today’s National Accounts. The pick in my view is the first by Bill Mitchell: As winter arrived (June 1), the March quarter Australian National Accounts came out and showed that the Australian economy contracted by a staggering 1.2 per cent. With the seasons passing into spring and the warm


A couple of points from the Guv

I really quite enjoyed this morning’s speech from Glenn Stevens. It was lively and candid and offered a couple of points worth noting for monetary policy debates. The first point I want to make is that Stevens has rather subtly ridden to the defense of the RBA board: By the time of the May Board meeting, there


Still interesting times

Here’s a copy of Glenn Stevens speech he is currently delivering in WA: Still Interesting Times Glenn Stevens Governor Address to the Chamber of Commerce and Industry (Western Australia) and the Chamber of Minerals and Energy (Western Australia) Corporate Breakfast Perth – 7 September 2011 It is very good to be with you this morning. In the


Europe’s optimism trap

To describe as sobering last night’s UBS report into the consequences of a European breakup hardly does it justice. It is about time someone began to assess the consequences of a breakup with a hard, cold eye and kudos to UBS for doing so. Hopefully it will help dispel some of the elementary drivel floating around


September 7 links: Swissy flips the bird

Up: $US, Treasuries Flat: gold, energy, ore Smacked: CCI, grains,  Euro,  Aussie, metals Core relief, periphery pain: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year


RBA holds, ramps caution

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. Conditions in global financial markets have been very unsettled over recent weeks, as participants have confronted uncertainty about both the resolution of sovereign debt problems and the prospects for economic growth


Qld drives housing finance bounce

So, we’re having a bit of a bounce in housing finance. Owner occupied was up 1.6% in July and investors 1.9%. Nothing too extravagant but certainly a rising from the floor. To the knees one might say: We’ve recovered much of the territory lost in the first half slump, though as you can see the


More CEOs grab bonuses

In The Great Crash of 2008, Ross Garnaut and I identified four major causes of the GFC: housing bubbles, global imbalances, clever money and greed. Pretty much none of these causes has been seriously addressed. But today I’m going to focus on the last. Greed is a part of all bubbles of course, but in


They are coming for the RBA

To me, it’s as clear as day that Australians hate their new economy. And, at face value, what’s to like? Although the MSM drones on about our good fortune, the fact is, it’s not like the old times. Back then, blind Freddy could get rich, just buy a house, then another! So long as you


September 6 links: European ugly

Rocket: gold Up: $US, CCI, grains, Treasuries Down: Euro,  Aussie, energy, metals Ragin’ contagion Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year 10 Year Germany


Mining 1, everyone else 0

For a group of pick wielding boof heads mining sure does a hell of a job on its public relations. Such a good job, in fact, it is running rings around the city-slicking bags of fruit who are supposed to understand the services business. What the hell am I talking about? This, from the SMH today:


ANZ job ads point to rising unemployment

ANZ job ads was out earlier today. It continues its recent trend of slowing growth: Total job advertisements on the internet and in newspapers decreased by 0.6% in August. Annual growth in total job advertisements decelerated to 6.1% y/y. • Newspaper job ads fell by 3.0% m/m, while internet job advertising decreased by 0.5% m/m.


TD Securities monthly inflation undershoots

I’m not sure that anyone is terribly concerned about the squawking of bullhawks anymore but for those that are you may rest easy for another month as the TD Secrurities Monthly Inflation gauge just dramatically undershot expectations recording outright deflation in August: Here are the details from the release: The TD Securities – Melbourne Institute


World Bank endorses MB

Many readers have noted the largish impact that MB has had on the reporting of the national media on certain topics. Indeed, one reader coined the term “”Macrobation” to describe the phenomenon. Now the World Bank is out with fascinating new research into the effect economics blogs (h/t Adrian). And it’s a ringing endorsement: Economic


Return of the Jedi

So, that was the US week that was. The August data flow was probably a little better than I reckoned on but was certainly bad (I tend to move more quickly than an economy does). Indeed, data was bad enough, especially Friday’s employment report, that the tenure of US debate has clearly shifted from worry


Safety in numbers

The MB nemesis, Gittins!, offered a piece over the weekend in which he gave the economics fraternity a caning for failing to foresee the current global slowdown. Using the now famous Carmen Reinhart and Kenneth Rogoff text, This time it’s different, Gittins! concludes: In their landmark study of hundreds of financial crises in 66 countries


September 5 links: Productivity palaver

ABN Amro CEO: bank funding harder. Bloomberg European deposits fleeing to American banks. The Street Light US participation rate also falling. Calculated Risk Week ahead for the Dow. Calculated Risk China’s gold reserves. Wikileaks via Zero Hedge Yield curve can’t invert. Aleph blog Slow but not yet recession. James Hamilton That’s not Santa it’s some fat guy


Terms of trade stall

Missed this yesterday. From the RBA: Australia’s recent spectacular run of terms of trade rises finally stalled in August. Preliminary estimates for August indicate that the index rose by 0.4 per cent (on a monthly average basis) in SDR terms, after rising by 1.8 per cent in July (revised). The largest contributor to the rise in August


Gerry’s black Christmas

It’s a dour line-up today and I was going to give you all a break from the steady drumbeat of recession talk but, sadly, I’ve just received more of same from the excellent folks at Forecast. In addition, I notice  that the usual suspects are engaging in spruikalicious drivel on the back of Gerry Harvey’s