Unconventional Economist

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Weekend Reading: 21-22 July 2018

Global Macro / Markets / Investing: First Test Drive of the Tesla Model 3 Performance: A Thrilling, Modern Marvel – WSJ Tesla’s battery maker suspends cobalt supplier amid… – Reuters Stolen Crypto Millions Paid Back for Cents on Dollar, Guaranteed – Bloomberg Fed’s Powell facing first test from the bond market – FT Microsoft’s Revenue

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NZ immigration eases as Aussie exodus ends

By Leith van Onselen Statistics New Zealand released its permanent & long-term migration figures for June 2018, which revealed that immigration into New Zealand has continued to drift back from record high levels, with 64,995 annual net permanent and long-term arrivals landing in New Zealand in the year to June, down from a peak of

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Labor’s Westconnex cash rebate is a taxpayer’s nightmare

By Leith van Onselen MB has frequently questioned the efficacy of Sydney’s WestConnex toll road and tunnel project – the $17 billion 33 kilometre motorway under construction that is more expensive per kilometre than the Chanel Tunnel. This hideously expensive project will see existing free public roads like the state-owned M4 (that have already been paid

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Grattan: Mass immigration has locked Aussies out of housing

By Leith van Onselen Earlier this month, Dr Bob Birrell and Dr Ernest Healy from The Australian Population Research Institute (APRI) published an excellent report explaining the deleterious impact Australia’s mass immigration ‘Big Australia’ policy has had on housing affordability in Sydney and Melbourne. Now, Bendan Coates, research fellow at The Grattan Institute, has admitted that mass

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Coalition ramps new immigration “bait-and-switch”

By Leith van Onselen Here we go again. The Turnbull Government has reignited its plan for tougher “English-language” and “values” requirements to become an Australian citizen. From The Australian: Citizenship Minister Alan Tudge has warned Australia is veering towards a “European separatist multicultural model”, flagging a rethink of immigration settings that could include new migrants

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CoreLogic weekly Australian house price update: more falls

By Leith van Onselen In the week ended 19 July 2018, the CoreLogic 5-city daily dwelling price index, which covers the five major capital city markets, declined another 0.11%: Values fell across all major markets except Brisbane: So far in 2018, home values have declined by 2.07%, with only Brisbane and Adelaide recording a value

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Links 20 July 2018

Global Macro / Markets / Investing: ETFs Unlikely to Cause Widespread Market Disruptions, Research Shows – WSJ Bond Traders Are Way Ahead of the Fed’s Powell – Bloomberg The False Tale of Amazon’s Industry-Conquering Juggernaut – Wired Quant Funds Are Getting a Bad Rap – Bloomberg Trump May Kill the Global Recovery – Project Syndicate Americas:

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Sydney’s final auction clearance rate plunges deeper into 40s

By Leith van Onselen Last weekend, CoreLogic released its preliminary auction clearance rates, which revealed the following results: CoreLogic has released its final auction results, which reported a large 5.5% decline in Sydney’s auction clearance rate to just 46.9%, with Melbourne’s also falling by 3.8% to 56.2%: According to CoreLogic, Sydney’s auction clearance rate fell

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Employment in detail: Not bad, could be better

By Leith van Onselen As summarised earlier, the Australian Bureau of Statistics (ABS) today released its labour force report for June, which registered a 50,900 increase in total employment but an unchanged headline unemployment rate of 5.4%, driven by rising labour force participation. In trend terms, the unemployment rate fell marginally from 5.43% to 5.41%:

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Chinese drive record $107 billion tourism spend

By Leith van Onselen Earlier this month we revealed that Chinese tourist numbers had hit an all-time high 1.4 million in the year to May, with their share of total tourists also at a record 15.8%: Today, Minister for Tourism, Steve Ciobo, revealed that Australia’s tourism spend – comprising both domestic and international tourists – increased by

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Personal insolvencies reach highest level since GFC

By Leith van Onselen The Australian Financial Security Authority (FSA) has released personal insolvency statistics for 2017-18, which reveals a sharp rise in total personal insolvencies to the highest level since the Global Financial Crisis (GFC), with record high insolvencies reached in WA and NT, and debt agreements also hitting an all-time high: According to

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Sydney’s rental vacancy rate to top 3% by year-end

By Leith van Onselen We noted on Tuesday how Sydney investors are facing the twin shock of both falling prices and rents. This came after SQM Research’s June rental report revealed that Sydney’s asking rents were now falling on the back of a spike in the rental vacancy rate to 2.8% – the highest level

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Sydney’s East revolts against “massive overdevelopment”

By Leith van Onselen With Sydney having hit permanent peak hour: And the city being transformed into a high-rise ‘battery chook’ farm: NSW Deputy Opposition Leader, Michael Daley, has slammed a “massive overdevelopment” in the inner suburb of Pagewood: Mr Triguboff’s company Meriton proposes to build more than 3000 apartments over 10 years on the former

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Aussie housing market teeters “on the precipice”

By Leith van Onselen Australia’s falling housing market: Combined with record debt loads: And falling houshold income: Has left the Australian housing market teetering “on the precipice” according to DFA’s Martin North, who was interviewed as part of a New York Times investigation: Georgia Blackie felt she needed to buy it or rent for the

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Why ordinary Aussie workers will shoulder a higher tax burden

By Leith van Onselen The Parliamentary Budget Office (PBO) has released a new report examining the future of tax revenue in Australia, which has projected that federal budget will become even more reliant on personal income tax revenue as other sources dwindle and no action is taken to better tax resources: …since 2001–02, the most significant

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ANZ: High house prices, immigration, a ‘productivity killer’

By Leith van Onselen ANZ’s latest Property Focus claims that claims that unaffordable housing and excessive immigration is killing productivity in New Zealand. From Interest.co.nz: “High house prices make it more difficult for younger households to invest in businesses, limiting the entrepreneurial endeavours of younger people. They also create barriers to labour mobility and social

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Links 19 July 2018

Global Macro / Markets / Investing: The economics of blockchains – VOX The Most Important Asset – Of Dollars & Data An Open Letter to Elon Musk – Loup Ventures Goldman Sachs Ushers In New Era as Solomon Takes CEO Reins – Bloomberg Value is Dead, Long Live Value, with Modest Proposal – The Investor’s

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Aussie property “prime target for money laundering”

By Leith van Onselen For years, MB has called on the federal government to implement the second tranche of anti-money laundering (AML) legislation covering real estate gate keepers, which was promised by the government more than a decade ago. MB’s incessant lobbying follows a veritable conga-line of reputable international organisations urging Australia to meet its

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When will Labor commit to raising Newstart?

By Leith van Onselen The chorus calling for a lift in Australia’s pathetically low Newstart Allowance for unemployed workers (the ‘dole’) is getting too loud to ignore. In recent times, we have witnessed a huge cross-section of industry groups and commentators calling for Newstart to be lifted, including: Deloitte Access Economics senior partner Chris Richardson;

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Adani white elephant ‘almost locked in’, says son

By Leith van Onselen With the Turnbull Government confirming that the Adani Carmichael coal mine will not receive NAIF funding, Australia’s largest rail freight company – Aurizon – stating that it will withdraw its application for a federal government loan to build the rail corridor, as well as deep public opposition, the project should have

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Dr Bob Birrell: High immigration is eating youth jobs

By Leith van Onselen Dr Bob Birrell from Australian Population Research Institute has argued that foreign students “gaming” Australia’s immigration system are locking younger Australians out of the jobs market. From The Australian: Surging overseas student numbers have driven net overseas migration to more than 240,000 a year, putting downward pressure on wages and pushing

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Mortgage hikes to crunch Aussie borrowers

Interest rate comparison website, RateCity, has estimated that Australian mortgage holders are facing sizeable increases in repayments on the back of out-of-cycle rate rises by lenders. From The Australian:  …mortgage holders with loans of $500,000 would be hit with a bill for an extra $358 each year if their lender increased rates by 10 basis

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Sydney becomes both a “buyer’s and renter’s” market

By Leith van Onselen SQM Research has released its rental vacancy series for June, which revealed a 0.2% lift in the national vacancy rate over the month but a 0.2% decline over the year: Over the year, decreases in vacancies were recorded in Adelaide (-0.3%), Perth (-1.3%), Brisbane (-0.6%) and Canberra (-0.3%), whereas increases were