Unconventional Economist


Weekend Reading: 24-25 March 2018

Global Macro / Markets / Investing: Stocks Drop Most in Six Weeks on Trade War Tension: Markets Wrap – Bloomberg Goldman Sachs CEO says sovereign balance sheets look risky – Reuters Bitcoin Falls on Fears of Regulatory Trouble for Big Crypto Exchange – Bloomberg Economists promote low-volatility cryptocurrency backed by dollars – FT Electric Cars


Leith van Onselen talks ‘Big Australia’ on Radio 2GB

Find above an interview I did this morning on Sydney Radio 2GB on Australia’s mass immigration ‘Big Australia’ policy, as well as company tax cuts. The interview begins at around the 10 minute mark and runs for about 14 minutes. Sustainable Australia president, William Bourke, also gave a great interview this morning with Melbourne’s Neil


Labor to embrace a ‘Giant Australia’

By Leith van Onselen With Australia’s permanent migration program already an insane 208,000 people a year – 2.5 times the level at the turn of the century: Labor looks set to raise Australia’s permanent migration intake even further – to around 240,000 people a year – by adopting The Greens’ policy of raising the humanitarian


Is private health insurance in its ‘death throes’?

By Leith van Onselen MB has frequently questioned the merits of government policy that forces Australians into private health insurance, and argued that diverting subsidies away from private health insurance into the public system would lead to more efficient health outcomes. We’ve also warned that Australia’s private health insurance system is facing a ‘death spiral’,


Sydney dwelling values record first rise in 28 weeks

By Leith van Onselen The deflation of Sydney’s housing market was halted this week, with Sydney recording its first increase in dwelling values in 28 weeks: In the week to 22 March, CoreLogic recorded a 0.05% rise in Sydney dwelling values. However, values have still declined by a cumulative 4.1% over that 28-week period, and


Links 23 March 2018

Global Macro / Markets / Investing: Zuckerberg Breaks Silence on Facebook Crisis as Criticism Grows – Bloomberg Attitudes towards immigration in an ageing society – VOX Cryptocurrency issuers clean up, shun U.S. investors as SEC gets tough – Reuters Jack Dorsey believes bitcoin will be the world’s sole currency within 10 years – Yahoo Eddie


Moody’s: Aussie mortgage arrears rose in Q4

From Moody’s Investor services: The performance of Australian prime residential mortgage-backed securities (RMBS) deteriorated over the three months ended 31 December 2017 (Q4 2017). Specifically, the 30+ day delinquency rate for prime RMBS increased slightly to 1.51% at 31 December 2017 from 1.50% at 30 September 2017 and 31 December 2016 respectively. Delinquency rates increase


Madness as immigration into Sydney and Melbourne hits record high

By Leith van Onselen The ABS has released its Australian Demographic Statistics for the September quarter of 2017, which revealed that Australia’s population continues to grow rapidly led by another surge in net overseas migration (NOM), mostly into Sydney and Melbourne, which have both seen record immigration flows. According to the ABS, Australia’s population rose


ABS employment in detail: Persistent labour market slack

By Leith van Onselen As summarised earlier, the Australian Bureau of Statistics (ABS) today released its labour force report for February, which registered a 17,500 increase in total employment and an increase in the headline unemployment rate from 5.5% to 5.6%. In trend terms, the unemployment rate rose marginally from 5.50% to 5.52%: Again, total


Unemployment rises to 5.6% in February

The ABS has released Australia’s labour force data for February, which recorded a 0.1% rise in headline unemployment and a 17,500 increase in jobs, with full-time employment up strongly. Below is the summary data: TREND ESTIMATES (MONTHLY CHANGE) Employment increased 19,300 to 12,480,500. Unemployment increased 4,300 to 729,500. Unemployment rate remained steady at 5.5%. Participation


More million dollar property sales than ever before in 2017

By Leith van Onselen CoreLogic comes a new report revealing that just under one quarter of Australian capital city houses sold for $1 million or more in 2017, with $1 million-plus sales also outnumbering sales below $400,000: Across the combined capital cities, 23.8% of all houses and 11.6% of all units sold over the year


Trump’s tax cuts risk 1970s-style stagflation

By Leith van Onselen JP Morgan’s Joseph Lupton forecasts that the US economy will expand by 1.25% over the next two years thanks to President Donald Trump’s company tax cut package, but that the tax cuts could potentially lead to 1970s-style stagflation, noting that fiscal conditions in the US at present are similar to those


Economists: Don’t expect Aussie standard of living to improve

By Leith van Onselen With Aussie standards of living sliding for several years on the back of falling real incomes, rising congestion pressure, and from living in smaller and more expensive housing, several senior economists have warned Australians not to expect an improvement in living standards anytime soon. From The ABC [my emphasis]: JP Morgan


RBNZ holds cash rate at 1.75%

By Leith van Onselen The Reserve Bank of New Zealand (RBNZ) has today left the official cash rate (OCR) unchanged at 1.75% and noted that economic growth is expected to strengthen and the labour market tighten, despite the housing market being restrained. It also indicates that rates will remain on hold for the foreseeable future


NSW stamp duty receipts follow prices down

By Leith van Onselen The NSW Office of State Revenue has updated its stamp duty data for February 2018, which showed that stamp duty receipts continue to fall following a monumental five-year boom that has lined the State Government’s pockets: As shown above, annual NSW stamp duty receipts ($7.343 billion) in February retraced further from


Charting Aussie house prices versus housing finance

By Leith van Onselen With the release Wednesday of the ABS house price results for the December, now is an opportune time to chart how capital city house prices are tracking against the ABS’ housing finance series. As readers no doubt already know, housing finance has historically been strongly correlated with values, so any shift


Links 22 March 2018

Global Macro / Markets / Investing: G20 sees need for ’dialogue,’ fails to defuse trade war threat – Reuters FAANG short sellers made nearly $1 billion in Monday’s Facebook-led plummet – MarketWatch Explaining Trades Is More Profitable Than Doing Them – Bloomberg Does Factor Mobility Nullify the Principle of Comparative Advantage? – Café Hayek Ripple’s


Auckland’s rat-wheel economy rides the population ponzi

By Leith van Onselen In August last year, Bernard Doyle, a strategist at JBWere, penned a ripping report on the New Zealand economy, arguing that rabid population growth was masking underlying weak productivity and poor per capita GDP growth: New Zealand has been in a productivity recession since 2012. Not that you’d notice from headline GDP


Adani to drain Australia’s scarce water reserves

By Leith van Onselen Late last year, The Conversation created the below infographic explaining the key impacts expected from Adani’s Carmichael mega coal mine, which is well worth a look: </p> For mine, the most damning information contained in this infographic is that: Adani would be allowed to extract unlimited volumes of water from the


NZ immigration eases despite ongoing Australian arrivals

By Leith van Onselen Statistics New Zealand released its permanent & long-term migration figures for February 2018, which revealed that immigration into New Zealand has continued to drift back from record high levels, with 68,943 annual net permanent and long-term arrivals landing in New Zealand in the year to February, down from a peak of