Unconventional Economist

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Labor to further neuter Australian Treasury’s influence

By Leith van Onselen This site has previously lamented the gradual denuding of Australia’s public service, which has been stripped raw by decades of government outsourcing, waves of senior redundancies, as well as a preference for governments to seek advice from paid consultants, erroneously named ‘think tanks’, and political staffers. The end result has been

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NZ house price expectations capitulate

By Leith van Onselen The New Zealand Labour-led Government’s promise to rein-in the country’s housing market via a combination of demand and supply-side reforms is already bearing fruit, with the Reserve Bank of New Zealand’s (RBNZ) Household Inflation expectations survey reporting a significant slowing in house price expectations over the next year (see right columns

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Banking Royal Commission gathers more steam

By Leith van Onselen After narrowly holding-off a banking Royal Commission in September 2016, it was reported last month that three Coalition MPs were considering crossing the floor of parliament and voting in favour of establishing a Royal Commission. Today, The AFR reports that Nationals Senator, Barry O’Sullivan, is pushing ahead with a private members

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As Aussie dwelling prices surge, homes shrink in size

By Leith van Onselen Back in 2010, the CBA produced the below slide claiming that part of the reason why Australian housing is so expensive is because we have the biggest homes in the world: HSBC’s Paul Bloxham has previously made similar arguments: …the quality of the housing stock is high. Australia has the largest

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Victoria’s ponzi sinkhole economy exposed

By Leith van Onselen You’ve gotta wonder about the economic literacy of the Victorian Government. After the ABS released the state accounts for the year ended June 2017 on Friday, Victoria’s Treasurer Tim Pallas, released the following baloney trumpeting the result: Victoria’s economy leads the nation with gross state product for 2016-17 growing 3.3 per

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Chinese tourist arrivals hit new record

By Leith van Onselen The Australian Bureau of Statistics yesterday released its overseas short-term arrivals and departures figures for September, which continued to show a trend rise in the number of inbound tourists, with Chinese arrivals continuing to boom. The number of short-term visitor arrivals fell 5.6% in September in original terms, whereas short-term resident

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Sydney auction clearances continue to crash

CoreLogic released its auction report yesterday, which reported another fall in the preliminary national auction clearance rate to 65.4% from 66.5% last weekend, and remained well below the 74.4% recorded in the same weekend last year: Auction volumes nationally were 3,335 – above the 2,987 recorded in the same weekend last year: As shown above,

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Links 20 November 2017

Global Macro / Markets / Investing: Ancient data, modern math and the hunt for 11 lost cities of the Bronze Age – Washington Post Myths of the 1 Percent: What Puts People at the Top – NY Times Greenhouse gases must be scrubbed from the air – The Economist “It’s a Ponzi Scheme”: Wall Street

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Weekend Reading 18-19 November 2017

Global Macro / Markets / Investing: Keystone Pipeline Leaks About 5,000 Barrels of Oil – NY Times Here Are Goldman’s Top Trades for 2018 – Bloomberg Open Banking Will Revolutionize Financial Services … Maybe – The Financial Brand The market power of ‘superstar’ companies is growing – Chicago Booth The Bond That Really Asks You

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Long-term arrivals into Australia hit another record high

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released visitor arrivals and departures data for the month of September, which registered another lift in annual permanent and long-term arrivals, which have hit record high levels. In the year to September 2017, there were a record high 777,440 permanent and long-term arrivals into

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Australia becoming “two nations divided by immigration”

By Leith van Onselen Fairfax’s Nicholas Stuart has penned a thought-provoking article imploring Australia’s politicians to address the ‘elephant in the room’ – Australia’s mass immigration program: It’s time to discuss seriously the one issue that’s threatening, more than any other, to tear the country apart: immigration… [QLD’s election] result depends almost entirely on the

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Sydney home prices fall for 10th consecutive week

By Leith van Onselen Evidence continues to mount that Sydney’s housing boom is cooked. CoreLogic’s dwelling values index has registered its tenth consecutive weekly decline in Sydney dwelling values, with values down a cumulative 1.0% over that 10-week period, and dwelling values also down 0.9% over the past 15-weeks: Sydney’s quarterly growth rate continues to

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CoreLogic weekly Australian house price update

By Leith van Onselen In the week ended 16 November 2017, the CoreLogic 5-city daily dwelling price index, which covers the five major capital city markets, fell another 0.04%: Values fell in Sydney, Adelaide and Perth, but rose in Melbourne and Brisbane: So far in November, home values have fallen by 0.06%, again driven Sydney:

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Links 17 November 2017

Global Macro / Markets / Investing: Deutsche Bank Says Junk Bonds Are a Buy, But Be Ready to Get Out – Bloomberg Wall Street pioneer takes out ad in WSJ to warn of bitcoin trading perils – MarketWatch One bitcoin is selling for almost $14,000 in Zimbabwe – VICE Yale’s Swensen Sees Low Volatility as

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Reality hits company tax debate

By Leith van Onselen From the get-go, MB has opposed the Turnbull Governments proposed reduction in the company tax rate from 30% to 25% on the following grounds: Foreign businesses and shareholders would gain the lion’s share of the benefits due to Australia’s dividend imputation system; The Budget would lose $8.2 billion a year, according

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Private health insurance ‘death spiral’ raises tricky questions

By Leith van Onselen I have previously claimed that Australia’s private health insurance system is facing forces similar to the electricity “death spiral”, which arises when demand for power declines, due in part to customers taking up solar, leading to higher prices to cover fixed network costs. That is, the more people that take-up solar

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ABS employment in detail: Botox boom rolls on

By Leith van Onselen As summarised earlier, the Australian Bureau of Statistics (ABS) today released its labour force report for October, which registered a soft 3,700 increase in total employment and a 0.1% decline in the headline unemployment rate to 5.4%. In trend terms, the unemployment rate fell marginally from 5.48% to 5.45% – the

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Luci Ellis rings the bell at the top of Australia’s ponzi-growth model

By Leith van Onselen RBA Assistant Governor, Luci Ellis, game a speech last night where she played down concerns over where Australia’s future growth would come from: As the mining investment boom turned down, and became a drag on growth, the question was often asked: ‘Where is the growth going to come from?’ Commentators started

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With Millennials screwed the world over, it’s time for a global revolt

By Leith van Onselen This site has frequently railed against the unfair treatment leveled at Australia’s Millennial generation. This inequity is most apparent in the housing market, where today’s younger generations are being forced to pay far more than their parents to live in smaller and poorly located accommodation. But it extends beyond housing and

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Scientists: population growth “primary driver behind ecological and societal threats”

By Leith van Onselen 15,364 scientists from 180 countries have put their names to a BioScience journal article calling for population growth to be limited, and governments to stop only focusing on economic growth. According to the ABC article attached to the report, “the number is believed to be the largest group of scientists to

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Why consumer and business sentiment has wildly diverged

By Leith van Onselen This week, we have experienced a strange phenomenon. On Tuesday, the NAB’s business survey reported that business conditions are running at their strongest level since monthly records began in 1997, whereas business confidence remained above the long-run average level. By contrast, yesterday’s Westpac’s consumer sentiment survey revealed that consumers remain dour,