David Llewellyn-Smith


The underemployment question

Yesterday’s strong employment numbers from the ABS stoked an interesting debate in the comments about what degree of underemployment Australia suffers. To help the debate along I’ve drawn up the following table from the ABS Underemployed Workers report. It is annual only and from Spetember 2010 It clearly shows two things. First, that labour markets in


The mad, bad commodity rally

There’s something wrong with this rally. To be honest, beyond some vague notion of Japanese reconstruction demand, I can’t find any real cause for it. With China clearly not done with tightening, QE2 about to cease, the ECB hiking rates, global growth past its prime and oil punching through $1.10 on Gaddafi’s scorched earth policy,


April 8 links: Commodity peak

Dear reader, I’ll being going off grid for the next week. Links will be still be available, compiled by Delusional Economics. I’ll still be posting but probably not in the morning’s. Back soon. David Rockets: ore, metals, energy. Up: Aussie. Down: grains. Flat: $US Commodity inflation hitting US expectations. Bloomberg Core Logic registers new plunge in US housing. Calculated Risk These are


Will the RBA cut?

Right now, the economy is far weaker than media and bank economist blather is letting on, or understands. For that matter it’s far more weak than global markets are assuming. The reason is simple and goes back to a piece I wrote ten weeks ago: So, let’s take a closer look at where we are


March 7 links: A QE timeline

Rockets: ore, metals, Aussie. Mixed: grains. Flat: energy. Down: $US A QE timeline. Calculated Risk Must read QE and commodities. Alphaville QE and commodities II. Alphaville More hawkish rhetoric. Tim Duy The US natural gas boon. Carpe Diem Global economy slowing. PragCap Waiting for the great rebalancing. Martin Wolf Maiden wakes up. SMH Port Douglas fire sale. The Oz Ore market dynamics. Reuters


Housing finance shocker

The drumbeat of crappy housing data is getting louder and more frequent. From the ABS February Housing Finance we get the following: Here are a string of graphs to give you a feel for how bad the trends are: I call them bad, yuk, crap and foul. And here’s one last one to drive home the


Golden rocket

As gold again surged to record highs last night on dovish Bernanke comments and weak data, it’s time to revisit the rally. I first began recommending gold to anyone that would listen in early 2001. I was laughed at. Later that year, my friends laughed at me again. This time, it was a running joke


April 6 links: No dice

Rockets: metals. Mixed: grains. Flat: energy, ore. Down: Aussie, $US. Foreigners snapping up Treasuries. Bloomberg Basel III way too soft. Economics Intelligence (h/t Naked Capitalism) No early exit from QE2. Calculated Risk, Tim Duy No inflation says Bernanke. Bloomberg CDOs are back. WSJ Services ISM peaks. Calculated Risk Fukushima radiation off the charts. NHK China raises interest rates again. Bloomberg


Canberra please read: Roubini calls time on China

From Nouriel Roubini at RGE Monitor: I’m writing on the heels of two trips to China during which I met with senior policy makers, bank executives and academics, just as the government launched its 12th Five-Year Plan, intended to rebalance the long-term growth model. My meetings deepened my own impression and RGE’s long-standing house view of


Hardly hawkish

Below is the RBA’s Statement on Monetary Policy: 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. The recent disaster in Japan will have a noticeable effect on Japanese production in the


Hawks and doves

So, it’s rates day. The usual suspects are out pounding the pavement. All over the media, currency boffins are calling for hawkish rhetoric from the RBA. But they’re all outdone by Australia’s one-man inflation fighter, former deputy governor of RBA, Henry Thornton, who calls for a hike today: Wage claims are on the march, with


March 5 links: The lucky country

Rockets: grains. Up: energy, metals. Flat: $US, ore. Down: Aussie. Former spook schools CNN on Libya. Zero Hedge Must watch video Rebels sell first oil. Reuters US flips in Yemen. Telegrpah Climate change sceptic flips. Paul Krugman Greenspan is a fox. Peter Hartcher Barney Frank responds. FT Shouldn’t have. Shoulda let Greenspan hang himself. Regulating shadow banking. The Money View


Michael Pettis: China easing off tightening

Exclusively from Michale Pettis’ newsletter: Three months ago during their 2010 Q4 conference, the PBoC said that they believed that the global economic recovery would continue in 2011, although they acknowledged a great deal of uncertainty. The PBoC also said that stabilizing the price level was their top priority, and the central bank planned to


Boom and bust is back

With Brent and WTI crude both surging to post-GFC highs Friday, I’m beginning to suspect that the world has entered a new era of oil price and growth volatility that spells the end of the Great Moderation. Why so? Supply and demand are the key to all things economic.  Previously at this site, the Unconventional


April 4 links: Oil high

Week ahead for the DOW. Calculated Risk Fukushima radiation. NYT Is the EU planning to invade Libya? Zero Hedge IMF wants Greek default. Reuters US/Saudi swapped Libya and Bahrain. Asia Times Told ya. The end of QE2. Alphaville America’s slow turnaround. The Economist What would the CPI look like if it included houses? Floyd Norris


Weekend Reading: The mutt opens an eye

Rockets: energy, ore. Up: Aussie. Mixed: grains. Flat: $US Down: metals. Oil speculation. Daily Finance (h/t Naked Capitalism) The Mellon doctrine. Paul Krugman America’s the April Fool. Henry Blodget US ISM strong, BIS solid. Calculated Risk Jobs recovery path. Zero Hedge Syria, Yemen protests. Give them Bancor. Joseph Stiglitz IEA courts Chinese oil. FT Chinese shadow banking. FT China PMI accelerates. Bloomberg No slowing



Sigh…I’m having an angry week. Regular readers will know that I’m no fan of vested interests. But I make one exception. Right now, the nation DESPERATELY needs a new vested interest body to support the non-resource tradable goods sectors of manufacturing, tourism and education. I can’t remember a peep out of either the education sector


Risks to the Aussie

The question I asked last week about Chinese growth and iron ore demand seems to have been answered for now. That question was the following: Not only has the market not priced a significant, if cyclical, China slowdown, if it comes, Chinese steel makers may very well enter an inventory cycle that liquidates some portion


April Fool’s Day links: Risks return

Rockets: grains, energy, ore. Up: Aussie, metals. Down:  $US Ireland 10 year, 2 year Another 24 billion for Irish banks. Reuters The road to default in Europe. BBC Fallout from Irish default. Bloomberg Radiation keeps coming. Reuters Japan PMI smacked. FT Long war. FT Regional Fed surveys on fire. Calculated Risk WalMart inflation alert. Zero Hedge Higher grain prices ahead. WSJ Now, actually. FT


House buying strike!

The above headline can’t have escaped the attention of many Australians yesterday. It sat at the top of the SMH, The Age, Brisbane Times and WA Today websites all afternoon. I can’t remember the last time I saw 500 comments on a Fairfax story (I literally can’t remember so it may not be that long).


March 31 links: Miracle restored

Up: Aussie, ore, metals. Flat:  $US Down: grains, energy. Fukushima may be re-critical. Zero Hedge The wondrous new Libyan democracy. FT Give us a break. Saudi versus Libyan crude. Alphaville America liquidating housing. Chris Whalen Where the bailout went wrong. NYT ADP 200k. Calculated Risk Fed needs a comms strategy. Tim Duy And how. Treasury’s will survive Fed exit. Gavyn Davies


Jobs point to restructure

The ABS released its Job Vacancies for February survey today. The overall release was a slight seasonally adjusted fall. More interesting is the industry split. The first chart below is for sectors with rising job ads for the month: And the second is for sectors with falling job vacancies for the month: This industry sector split


March 30 links: Rolling on

Up: Aussie, ore, grains, energy. Flat:  $US, metals. Libya’s future. FT Yemen. Reuters Syrian government resigns. FT QE2 will run its course. Tim Duy US real house prices. Calculated Risk Covered bonds headed for Level 1 liquidity status. Alphaville Yang Hengjun goes missing. FT, John Garnaut We sell them dirt but throw in bloggers. Oil risk is upside. PragCap Groundhog Day


The aliens have landed

An alien has landed in Australia and is confusing the hell out of everyone. That alien’s name is lack of system growth. In the old system, as the pie got bigger, there were no losers, only degrees of winners. Corporations in Australia’s dominant finance, realty and retail sectors could swap 2 per cent market share


March 29 links: Trouble in paradise

Up: Aussie, ore. Flat:  $US, grains. Whacked: energy. Double top on the CRB? Radioactive pool found. NYT, Kyodo News Latest Japanese supply chain decoupling. Zero Hedge Is intervention right in Libya? Guardian. (h/t Naked Capitalism) Syria won’t fall. Roger Shanahan Portugese yields hit record. Bloomberg The Bernanke oil shock paper. Zero Hedge The GFC trade collapse. Alphaville China’s huge copper


The bulls circle the wagons

Today on Smart Company, Craig James of Commonwealth Bank offered this brief article: The Reserve Bank Governor was asked a question on Australian home prices when he delivered a speech in London on March 10. The comments weren’t well reported, but he highlighted the fact that home prices aren’t rising strongly at present, that arrears


Tough day for banks

Banking Day today has a string of interesting articles that dramatically underline the increasingly dour future for the major banks, not to mention the broader services deconomy. First up, the possibility that the banks will, after all, be dragged into the new international measures demanding extra capital for systemically important financial institutions: Global financial regulators


March 28 links: Dollar dazzler

Rebels move west. Bloomberg Mission Accomplished. Barack Obama Ugly radiation. Zero Hedge Ireland going for haircuts. Reuters UK folk going for broke. FT Week ahead for the DOW. Calculated Risk Bullard swings to QE2 end. Bloomberg Uber-hawks now control Fed. Jack Barnes Wartering down Dodd-Frank. NYT Corrupting covered bonds. FT ASIC shrinking. SMH Dollar to


Weekend Reading: Two-pace, two-face, too much

Rockets: $US, Aussie. Flat:  Metals, energy, grains. Fukushima bleeding. New Scientist Not over. BusinessWeek Why I now love nuclear. George Monbiot Now Syria. FT Bahrain simmers. FT Endgame chimera. Paul McGeogh Oil to stay high. Credit Writedowns Is Spain next? WSJ IMF loosens the purse strings. Zero Hedge The RBA is very happy. The Source The FED’s lovely