David Llewellyn-Smith


Turning a soft landing hard

Sigh. I apologise for the ceaseless battery of bearish outlooks this morning but damn, that’s the way the world is going, and I’m not going to “pull a Yardney” and pretend it isn’t so that yours and my hard earned capital goes up in smoke. This morning we have two excellent pieces on the debt-ceiling


Deadlines, debt and downgrades

Find below an excellent note from Westpac covering the fallout from various scenarios emanating from the US debt-ceiling debacle. The note is both useful and entertaining, with Russell Jones of the rates strategies team nicely capturing the absurdity of the situation.


August 1 links: Blather goes on

Blather goes on. Bloomberg Wall St mobilises. NYT Meanwhile, in the global economy…Zero Hedge US economy below stall speed. Gavyn Davies Planning for a Treasury default. Alphaville Shitty GDP US style. Alphaville US productivity boom vanishes. Innovation and growth China won’t dump US debt. Patrick Chovanec Gaddafi getting stronger. Guardian Jawboning the RBA. SMH A new survey! Gittins!


CBA’s online retail report

  CBA have released an excellent piece of research this morning that helps demystify foreign online spending by Australian consumers. The research is drawn from the bank’s credit card and merchant businesses. It’s a must read this one. Full report below. A million customers can’t be wrong There has been a dearth of reliable data


A bullhawk macrobated?

Well…probably not. But spare a thought for HSBC’s Paul Bloxham, who, having predicted an August rate rise all year, and only pushed out his predicted timeline for a hike a week or more ago, suddenly finds his fellow bullhawks (Joye and Carr) taking to the higher atmospheres, screetching for an August move. This morning he


I am beneficent

Yesterday, to tremendously little fanfare, the Treasurer, Wayne Swan, released his Discussion Paper for the tax summit to take place in October this year. Find the document below. There is not much point going into the full details of the document. Most of it is framework and fluff. And, really, given the extraordinary pressures that


29 July links: Farce goes on

        Up: ore, $US  Flat:  gold, energy  Down: , Aussie,  metals , CRB, grains, euro Italy and Spain headed to highs: 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


ANZ backflips on rate rise

Yesterday’s unaninmity among the banks that there will be no rate rise in August has lasted a full 24 hours with ANZ rolling over and going all in: RBA TO LIFT RATES BY 25 BPS TO 5.0% IN AUGUST  ANZ now expects the RBA to lift the cash rate by 25bps to 5.0% in August.


Another “affordability” study

  Below find the new National Centre for Social And Economic Modeling (NATSEM) report into housing affordability. The report is both quite good and quite frustrating. It acknowledges the severe unaffordability of the national housing market but never uses the word “bubble”.  As such, it provides some very good overvaluation assessments but fails completely to canvass


The horns of a dilemma

Yesterday’s CPI number sent the Bullhawks (Carr, Joye, Bloxham) into the stratosphere. The leader of the group, Chris Joye, had the following to say on his blog: Well, as predicted here more consistently and loudly than pretty much anywhere, Australia officially has a major inflation problem. And I mean “major”. Underlying or core inflation has


July 28 links: More slowing

Up: ore, $US  Flat:  gold, Aussie,  metals , CRB, grains  Down: euro, energy  Contagion on for the bigguns: 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


Banks unanimous in calling no hike

Here are the respective analyses of the economics teams at ANZ, Westpac, CBA, NAB and HSBC. All conclude there will be no hike in August but that the risk for Q4 has increased. That will be revelation to you but the details of the respective analyses are useful. Westpac Aust 2011 Q2 CPI +0.9%qtr, 3.6%yr; average RBA


CPI comes in hot

JUNE KEY POINTS THE ALL GROUPS CPI rose 0.9% in the June quarter 2011, compared with a rise of 1.6% in the March quarter 2011. rose 3.6% through the year to the June quarter 2011, compared with a rise of 3.3% through the year to the March quarter 2011. OVERVIEW OF CPI MOVEMENTS The most


Abusing money for power

For me, the most remarkable part of writing The Great Crash of 2008 with Ross Garnaut was diving into the murky depths of Wall St’s extraordinary manipulation of money. In the book, we called this “Clever Money”. It was the story of how, over many years, Wall St took the plain vanilla process of securitisation,


July 27 links: Loving a US default

Up: ore, gold, Aussie, euro, energy , metals , CRB, grains Down:  $US  Contagion mixed: 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 2


Moody’s warns on Aussie housing market

Try as I might, I can’t find any reference in the Australian media (could be wrong) to a press release this afternoon by Moody’s warning of trouble ahead for the Australian housing market and a review of RMBS ratings. Thankfully in New Zealand they still seem to breathing (via Alex Tarrant at Interest.co.nz): Sydney, July 26, 2011


Glenn Stevens macrobated

Well, so much for being the lunatic fringe. The Governor of the Reserve Bank of Australia has delivered a seminal speech on the Australain consumer this afternoon and regular readers can pretty much throw it away. They have read it here for the past six months. Glenn Stevens has been “macrobated” (that is, converted to,


Glenn Stevens on the cautious consumer

Find below the full text of Glenn Stevens speech this afternoon. The Cautious Consumer Glenn Stevens Governor Address to The Anika Foundation Luncheon Supported by Australian Business Economists and Macquarie Bank Sydney – 26 July 2011 Thank you for coming out once again in support of the Anika Foundation.[1] I want also to thank in


The bizarre retail debate

One of my favourite journalists, Adele Ferguson of The Age, today calls for a retail bailout: Other figures show that online spending is going gangbusters. There is an estimated $12 billion a year spent in online retail, but it could be much higher than this. Domestic online sales have been growing at 5 per cent


Trading the Guv’

Westpac offers a neat little observation this morning: The RBA Governor will today deliver a speech to the Anika Foundation  on ‘Issues in Economic Policy’. Recall in 2009 that it was this platform  that was used to shift the Bank’s stance away from an easing bias. Over the past 18 months, the Governor has made


Out of time

While markets remain fixated with the debt ceiling debacle in America, I am more concerned with Europe. We’ve had just two days of gains in European sovereign bonds and already the yield blowout has resumed. Both short term and long term Italian bonds were under pressure overnight: The same for Spain: It was the same


July 26 links: Contagion returns

Up: ore, gold (red and yellow metal!) Flat: Aussie, $US  Down: euro, energy , metals , CRB, grains Contagion returns! 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


Access goes all in on rate rises

Boy, do we have a market in interest rates. From Bloomberg: Australia’s central bank will increase interest rates three times in the coming year as a mining boom boosts wages and helps the economy recover from natural disasters, a Deloitte Access Economics report showed. High resource prices and strong demand will boost Australian incomes and there


Producer prices ease, but…

JUNE KEY POINTS FINAL (STAGE 3) COMMODITIES increased by 0.8% in the June quarter 2011. mainly due to rises in the prices received for building construction (+1.2%), petroleum refining (+10.3%) and other agriculture (+7.9%). partly offset by falls in the prices received for industrial machinery and equipment manufacturing (-2.0%). increased by 3.4% through the year


Australian stagflation

Late last week, the venerable Melbourne Institute released its Monthly Bulletin of Economic Trends. In it, the economists of the institute predicted that Australia is headed back to the seventies with a bullet: Policy dilemmas ahead … In contrast to other forecasters, we have cautioned for some months now that GDP growth is likely to be


Don’t mention the savings

Two senior Australian business and economics commentators today make throwaway arguments about the struggles of the retail sector. First, it’s Alan Kohler, who dedicates his column to explaining how retail is suffering from Dutch disease. His argument is as follows: Retailing is the bedrock of the economy, employing about 1.3 million people directly and touching


Peak everything

Below find Jeremy Grantham’s latest quarterly newsletter. In it he draws out his thesis that the world stands at the edge of peak everything. Here is his executive summary on likely outcomes: Summary We humans have the brains and the means to reach real planetary sustainability. The problem is with us and our focus on


July 25 links: Auction surge!

FDR 1936 . Jesse Cafe Americain Q2 US growth. Calculated Risk Week ahead for Dow. Calculated Risk US inflation easing. Carpe Diem On Fed asset purchases. Econbrowser Madly in love with rationality. Andrew Gelman Iran and China price in barter. Zero Hedge Good company for the miners. Signs of life in Sydney property market. SMH Auction


CPI preview

NAB has produced a rather useful guide to next week’s CPI read, which all seem to think will be crucial in determining the August interest rate outcome. Personally, I think there’s little chance of a hike, not least because three days later, when it releases its quarterly Statement on Monetary Policy, the bank is most likely