Unconventional Economist

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Weekend Reading: 20-21 August 2022

Global Macro / Markets / Investing: Monkeypox vaccine maker can’t keep up with demand as case numbers swell – CBS Hundreds of Google workers demand abortion protections, data privacy – PBS Big prarma should brace for worst cancer outcome – Reuters Bank Stocks Make a Comeback – WSJ Wall Street Bets the Fed Is Bluffing

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A deep dive on the economy, politics and Australia’s housing market

On Tuesday night, I had a fabulous discussion with Martin North on the Australian economy, the state of politics and policy making, and Australia’s housing market. Key topics included: The Albanese Government’s upcoming increase in Australia’s immigration intake to record levels, and what it means for the economy and living standards. The idiocy of growth

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The calm before the international student storm

The latest Overseas Arrivals and Departures figures from the Australian Bureau of Statistics (ABS) revealed that international student arrivals have failed to rebound following the reopening of Australia’s international border late last year. Only 35,110 international students arrived in Australia over the quarter – down significantly from the decade average of 98,000 quarterly arrivals: Over

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Australian company insolvencies jump

Deloitte Access Economics’ Weekly Economic Briefing examines Australian company insolvencies, which jumped 23% year-on-year in June as companies grapple with high inflation, rising interest rates, shortages and a slowing global economy. The good news, however, is that insolvencies are still tracking below pre-COVID levels; although that will likely change over the year ahead: The average

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Migration Council Chair demands cheap visa flood

The ACTU’s brilliant submission to the upcoming Jobs & Skills Summit demanded that all temporary skilled migrants be paid at least average weekly full-time earnings: Increase the Temporary Skilled Migration Income Threshold (TSMIT) – the salary floor for temporary skilled migrants – to Average Full Time Weekly Earnings (approx. $90,916.80 at November 2021) to be indexed

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Coalition PC lackey blames low productivity for poor wage growth

In 2018, I lamented how the “esteemed government organisation – the Productivity Commission (PC) – is facing politicisation, with Treasurer Scott Morrison appointing former Liberal Party staffer, Michael Brennan, to head the Commission”: Brennan is a former staffer to former Liberal Finance Minister Nick Minchin and also served in that role for former Victorian Liberal

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HIA forecasts housing construction bust

The Housing Industry Association (HIA) has updated its dwelling starts forecasts, which now tips a steady decline in detached house construction all the way to 2024 on the back of rising interest rates and high construction costs: It is anticipated there will have been 131,730 detached starts in 2021/22. This is just 6.7 per cent

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Albo follows Rudd’s ‘Big Australia’ immigration plan

The similarities between the Albanese Government and the former Rudd Labor Government are uncanny. Both came to power following a long stint in the political wilderness and initially rode a wave of strong popular support. And both quickly established national summits to ‘solve’ the nation’s problems: The Rudd Government’s Australia 2020 Summit was a two

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RBA rate hikes sink Aussie house prices

CoreLogic’s weekly Australian house price index, which tracks value changes across the five major capital cities, fell another 0.37% in the week ended 18 August – the 15th consecutive weekly decline: The decline in values was driven by the three largest capital cities, namely Sydney (-0.5%), Melbourne (-0.34%) and Brisbane (-0.39%): So far in August,

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Links 19 August 2022

Global Macro / Markets / Investing: Electric Car Prices Spiking Due To Rising Costs And Demand – Inside EVs On the corrupt $280 billion CHIPS handout to semiconductor oligarchs – IBO News Fed sees interest rate hikes continuing until inflation eases substantially – CNBC OPEC not to blame for soaring inflation, new chief says, citing

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Dan’s Suburban Rail Loop strangles Victorian Budget

To nobody’s surprise, the cost of building Melbourne’s suburban rail loop has doubled to $125 billion, with another $75 billion projected for operating expenses. That’s according to the Victorian Parliamentary Budget Office: According to the state parliament’s budget office, which published a report overnight, the north and east sections of the rail loop could blow

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Australia’s jobs boom ends, extinguishing RBA rate hikes

The Australian Bureau of Statistics (ABS) has released labour market data for July, which showed that Australia lost 40,900 jobs (-0.3%) over the month, with hours worked also falling by 16 million (-0.8%): However, because the labour force participation rate fell by 0.3% to 66.4%, the nation’s unemployment rate actually fell by 0.1% to 3.4%

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NAB scaremongers as real wages plunge to 2012 levels

NAB’s economics team has talked-up yesterday’s soft wage growth data, claiming private sector wages are in fact booming. In turn, this justifies further aggressive interest rate hikes from the RBA: NAB director of economics and markets Tapas Strickland had a clear message: “Ignore the headline [Wage Price Index] excluding bonuses.” Instead, he said to look

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Labor fruit cake demands 800,000 migrants a year

Meet Cameron Milner. He’s a former Queensland Labor Secretary that was also then Opposition leader Bill Shorten’s top advisor. Milner has penned one of the most egregious articles I have ever read in The Australian attacking the “whining social services lobby groups”, defending the Stage 3 tax cuts, and lobbying for “a huge increase in

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Labor blames “supply” for housing crisis, then drops record immigration

The federal Minister Housing and Homelessness gave an interview yesterday on the Today Show (video below) where she blamed Australia’s housing crisis on a lack of supply: “Ultimately [the housing crisis] is an issue of supply, and we need to get more homes on the ground as quickly as we can. And that’s what we’re

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Links 18 August 2022

Global Macro / Markets / Investing: New Study Links Financial Wellness with Better Sleep – Altoirablog After Google’s “Blood In The Streets” Warning, Apple Lays Off Employees – NDTV Warren Buffett’s Berkshire Hathaway topped up its Apple and Chevron stakes last quarter – Yahoo Dow, S&P 500 Close Higher Ahead Of Big Week For Retail

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Australian weekly economic indicators bounce

Roy Morgan CEO, Michelle Levine, has provided a useful update on Australian politics and economics, based on the firm’s latest surveys. First, Roy Morgan’s latest voting intentions tracker shows that the Labor Albanese Government has extended its electoral lead over the Coalition by 1%, and now leads 53% to 47% on a two-party preferred basis.

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Aussie leading index dead cat bounces

Westpac’s Bill Evans with the index. It’s difficult to see how the economy could bounce in the face of aggressive interest rate hikes from the RBA and crashing house prices. Household consumption drives the economy and should fall as both rising mortgage repayments and the negative wealth effect from falling house prices bite.  ____________________________________________________________________________________________ Growth

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Soft Aussie wage growth tempers RBA rate hikes

Australian wage growth missed economists’ expectations in the June quarter of 2022, according to new data released today by the Australian Bureau of Statistics (ABS). Total wages grew by only 0.72% in the June quarter, missing analyst’s expectations of 0.8% growth. Private sector wages grew by 0.72% over the quarter, whereas public sector wages grew