Leith van Onselen

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Weekend Reading: 28-29 March 2020

Global Macro / Markets / Investing: Was Pre-Coronavirus Stock Market a Bubble Inflated by “Financial Engineering”? – Open Politics This Is Not Capitalism: This is your brain on central banking, regulatory capture, and financialization – Medium Dow rallies 1,000 points, lifting its 3-day gains to 20% – Apple News Americas: Unemployment claims hit 3 million

26

Australia to run out of ICU beds in 10 days

Earlier this month, we warned that Australia’s hospital system was already dangerously short of hospital beds before the coronavirus outbreak, given it has only 3.8 hospital beds per 1,000 people – only slightly better than Italy and less than one-third Korea and Japan: The Grattan Institute followed claiming that at current growth rates, Australia would

16

Foxtel dies of the virus

As we know, the widespread cancellation of sporting events across the globe has dealt a serious blow to Foxtel’s viability, whose only competitive advantage rests with televising live sporting events. In particular, the cancellation/postponement of the 2020 AFL and NRL seasons has been particularly devastating for Foxtel, given these are the jewels of the company’s

15

Australian vehicle trips down 75% amid partial virus shutdown

Interesting data from the Grattan Institute shows that traffic on Sydney’s and Melbourne’s roads has crashed 75% amid the coronavirus pandemic: Australians do appear to be changing their behaviour in response to the spatial distancing and quasi-lockdown measures imposed by the state and federal governments over the past weeks. The chart below shows that the

16

Decimation of Australia’s car industry could literally cost lives

The federal government’s short-sighted decision to allow Australia’s automotive manufacturing industry to close has left the nation desperately short of ventilators, placing lives at risk: The coronavirus crisis is placing immense pressure on the global availability of ventilators, which are needed to pump oxygen into the failing lungs of critically ill patients. Italy’s swamped hospitals

6

NBN passes initial virus stress test

A few weeks back there were concerns that Australia’s beleaguered National Broadband Network (NBN) would struggle to cope with extra user demand as large numbers of Australians work from home and access online streaming services: NBN Co said it had already seen a rise in demand during both working hours and the peak evening usage

29

Only a complete shutdown will stop virus spread

Raina Macintyre from the University of New South Wales believes a total lockdown of Australia could potentially stop the coronavirus within two weeks. Stephen Duckett from the Grattan Institute in turn suggests that it could take three weeks or so to halt the virus’s spread. A total lockdown would be enforced by police, and people

21

Superannuation funds beg for RBA bail out

Some of Australia’s superannuation funds are facing a liquidity crunch due to holding illiquid unlisted assets at the same time as the Morrison Government is permitting members to make early redemptions: Jeremy Cooper, Chairman of Retirement Income at Challenger Limited and formerly the Chair of the government’s Super System Review in 2010… warns that there

33

Bust imminent as Australian housing catches virus

ABC’s The Business last night ran a segment on how the coronavirus pandemic is likely to hammer Australia’s housing market, causing sharp falls in prices, rents and transaction volumes. The segment features real estate agents, landlords, AMP’s Shane Oliver and CoreLogic’s Tim Lawless, and claims that dwelling vales could fall by as much as 20%.

16

Coalition and Treasury have no idea on welfare

MB’s idea of implementing a temporary universal basic income (UBI) to see Australia through the coronavirus crisis has received support from the 156,000-member United Workers Union: UWU national secretary Tim Kennedy, in a position paper, said there was an urgent need for the federal government to intervene “and play an active role in guaranteeing and

45

Fresh calls to expand money laundering visas

Atlas Advisors Australia has wasted no time in using the coronavirus pandemic as an excuse to lobby the Morrison Government to open the floodgates to Significant Investor Visas (SIV) – affectionately known as “Golden Ticket Visas”: About $100 million could provide a lifeline for start-ups and emerging companies crippled by the coronavirus if applications under

29

CoreLogic weekly house price update: Slowing

In the week ended 26 March 2020, the CoreLogic 5-city daily dwelling price index, which covers the five major capital city markets, rose another 0.13%: The rise in values was broad-based, with every major capital increasing in value: So far in March, dwelling values have risen by 0.72%, with all major capitals rising: Quarterly dwelling

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Links 27 March 2020

Global Macro / Markets / Investing: Coronavirus is the ultimate proof that the world can no longer afford to ignore tax havens – Eureporter Why ending social distancing early will not revive the economy – Project Syndicate The coronavirus outbreak is a stark reminder of the divide that exists in countries without universal healthcare, like

58

Private schools face collapsing enrolments

With unemployment set to rockets and households all over the nation facing falling disposable income, Australia’s private schools are facing a big drop-off in enrolments and fee revenue: The Association of Independent Schools in NSW, which represents 33 per cent of all independent school students in Australia, said COVID-19 coming on top of the bushfires

6

While Netflix booms Foxtel busts

As we know, Foxtel is heavily reliant on sports programming for subscription revenue. Thus, the cancellation of most live sporting events across the globe will have a major impact on its bottom line. Foxtel’s dedicated Kayo sports streaming service will be hardest hit, as advertising revenue is expected to fall sharply as more companies pull

17

Final auction clearance rate crashes into mid-50s

Earlier this week, CoreLogic released its preliminary auction clearance rates, which revealed the following results: Today, CoreLogic has released its final auction results, which reported a 4.4% decline in the final national auction clearance rate to 56.9% – still above the same weekend last year (50.9%): As you can see, Sydney’s final auction clearance rate

41

One quarter of workers swamp myGov in 20 hours

Australia’s Minister for Government Services, Stuart Robert, has confirmed that an extraordinary 3.2 million Australians attempted to login to myGov in only 20 hours: We have facilitated 3.2 million logins to myGov over the past 20 hours. This is just extraordinary demand. We will continue to run this service 24/7 and progressively increase its capacity

10

150,000 migrants flooded Sydney and Melbourne in 2019

The Australian Bureau of Statistics (ABS) yesterday released its Regional Population report for the 2018-19 financial year, which revealed that Melbourne remained the king of the population ponzi, adding an insane 113,480 people to its population in 2018-19, representing growth of 2.3%. Sydney’s population also surged by 87,065 people in 2018-19, representing growth of 1.7%

55

Property sales facing “worst ever” collapse

Only a fortnight ago, CoreLogic published the below chart showing that Australian property sales had bounced back from the “worst ever” collapse, with capital city sales running 9.1% above last years levels, driven by a massive increase in Sydney (+20.7%): Now, with Australia heading into lock down, Australians facing mass unemployment, and auctions and open

21

Is this the end of international education?

Globalisation expert Professor Salvatore Babones has penned a thought provoking article in trade magazine – Times Higher Education – asking whether the coronavirus crisis spells the end of an era for international education: Until now, the number of Chinese students studying abroad only ever moved in one direction: up… Many prestigious research universities have come

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Links 26 March 2020

Global Macro / Markets / Investing: A Debt Jubilee is the Only Way to Avoid a Depression – CounterPunch Amazon Prime delivery delays are now as long as a month – VOX Goldman Sachs CEO David Solomon Received A 20% Raise To $27.5 Million, While The Market, Economy And Job Market Crashed – Forbes The

31

Pay freeze for MPs and top public servants

Finance Minister Mathias Cormann has indicated that pay rises for federal politicians and senior public services will be put on hold due to the coronavirus pandemic. Judges and ministerial staff are also among the public sector workers whose pay will be frozen. Former Queensland premier Campbell Newman has suggested that public servants on annual salaries

9

Defective high-rise continues to plague Sydney

After experiencing an unprecedented boom in high-rise apartment construction over the past decade: And with flammable cladding and structural faults proliferating, the State Government in January finally took action by giving the NSW Building Commissioner the power to block dodgy developers from building high-rise: Designed to prevent repeats of the Opal and Mascot Towers ­crises,

16

The death knell tolls for Foxtel

With Foxtel already reeling from the AFL postponing its season until at least 31 May, the NRL yesterday also postponed its 2020 season indefinitely. AFL and NRL are undoubtedly Foxtel’s jewels when it comes to live sports broadcasting. Therefore, the closure of both codes presents a death blow to its Kayo Sports streaming service, whose

36

MyGov buckles as mass unemployment looms

Services Australia is hiring more staff and redeploying existing personnel as people made unemployed by the coronavirus lockdown continue to swamp Centrelink offices and the MyGov portal. Government Services Minister and serial buffoon, Stuart Robert, last night admitted that he underestimated the number of people who would seek to access MyGov following the lockdown decision,