Unconventional Economist

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Links 4 March 2021

Global Macro / Markets / Investing: Jeff Bezos would pay over $ 5 Billion a year under Warren Wealth Tax Plan. – CNBC Startups Lose Innovative Edge Under Corporate Funding. When an established tech company invests in a startup, innovation suffers – Medium American Homeowners Are Adding Fuel to Bond Market Sell-Off – Bloomberg Experts

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Roy Morgan business confidence strongest since 2014

Roy Morgan Research has released its business confidence survey for February, which reported its “highest three-month average sentiment since January to March 2014”. Business confidence rose 0.3pts (+0.2%) to 120.8 in February to be 7.3pts above the long-term average of 113.5 (see next chart). Business Confidence is now 16.2pts higher than it was a year

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Perth property headed for mega boom

All indicators are pointing to a mega boom for Perth’s property market. According to CoreLogic’s February dwelling value results, Perth recorded the strongest quarterly value increase of all capital cities, with prices surging 4.3%. This was the strongest price growth since 2006. The latest market indicators from the Real Estate Institute of Western Australia (REIWA)

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Australian border ban extended until June

Fairfax reports that the federal government has announced an extension of Australia’s international border closure until at least 17 June 2021. This will mean that Australia’s international border will have been shut for 15 months after initially closing on 17 March 2020. Health Minister Greg Hunt says the Australian Health Protection Principal Committee had recommended

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New Zealand house prices go vertical

CoreLogic has released its New Zealand dwelling value results for February, which shows that price momentum continued to gather steam. Dwelling values nationally surged by 2.6% over February to be up a whopping 7.6% over the quarter and by 14.5% year-on-year. As shown in the next chart, quarterly value growth is running at its hottest

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Aussies continue to shun public transport

The COVID-19 pandemic continues to adversely impact the nation’s CBDs. According to recent data from Roy Morgan Research, people movements in January were well down on the same time last year across every Australian capital city, with Melbourne and Sydney most adversely impacted (see next chart). With so Australians still working from home and avoiding

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Australian consumer confidence rises back to average

After three consecutive weekly declines following Melbourne’s hard lockdown, the ANZ-Roy Morgan Consumer Confidence Index posted a 1.0% rise on 27/28 February, taking the index to around the long-run average (see next chart). According to ANZ’s head of Australian economics, David Plank, consumers are becoming increasingly concerned about rising inflation, brought about in part by

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Aussies are taking out and repaying mortgages at a record pace

Record low interest rates and households awash with stimulus money is having interesting effects on Australian borrowing habits. On the one hand, Aussies are taking advantage of the lowest borrowing rates on record to pile into the housing market, with new mortgage issuance running at all-time high levels in January, according to the Australian Bureau

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Links 3 March 2021

Global Macro / Markets / Investing: Charging patients just $10 more for medications leads to more deaths – VOX What To Do on the Stock Market in 2021? Warren Buffett Advises You To Bet on America. His confidence in America is unshakeable. – Medium Is Inflation a Risk? Not Now, but Some See Danger Ahead

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Construction loans continue to break records

The Housing Industry Association (HIA) has hailed the success of the federal government’s HomeBuilder stimulus after loans for construction rose for their seventh consecutive month to the highest levels on record: “Confidence in the housing market has been improving since the announcement of HomeBuilder in June 2020… “The number of construction loans to owner occupiers

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Government admits there “are simply not enough jobs”

The federal government recently suspended indefinitely a ‘star rating’ system that ranks privately-run employment services providers. Its decision has been described as ‘galling’ by unemployment support groups, as it comes at a time when the government is increasing its auditing of job applications submitted by unemployed people, as well as implementing a hotline for employers

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Australia drags chain on vaccine rollout

The Australian Medical Association’s (AMA) president Omar Khorshid says the federal government’s goal of vaccinating the entire population by October is looking challenging, and the end of the year is looking more realistic. The federal government has already fallen well short of its target of vaccinating 60,000 people by the end of February, with only

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The shills are beating the drum for mass immigration

As expected, Australia’s business lobby and wealthy elite are growing more vocal demanding the federal government open Australia’s international border to migrants. These groups like mass immigration for three main reasons: It provides a bigger pool of available workers to recruit, thereby increasing competition in the labour market, lowering worker bargaining power, and holding down

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RBA commodity index booms

The Reserve Bank of Australia (RBA) has released its index of commodity prices for the month of February, which continues to boom. The commodity price index rose by 3.6% in February in Special Drawing Rights (SDR) terms – the key determinant of Australia’s terms-of-trade – to be up 19.6% over the quarter and 23.9% year-on-year.

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Don’t raise taxes to fund aged care

It is reported in The AFR that the federal government will allocate an additional $452 million to aged-care in response to the final report of the royal commission into the sector, with further measures to be included in the May Budget. The report has made a total of 148 recommendations, with commissioners Tony Pagone and

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Revenge of the first home buyer

For the first time in more than a decade, Australia’s first home buyers (FHB) are enjoying their moment in the sun. Thanks to generous subsidies and a 60 basis point discount in mortgage rates, the value of mortgages issued to FHBs has overtaken investors. As illustrated in the next chart, there were $7.2 billion FHB

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Links 2 March 2021

Global Macro / Markets / Investing: Bill Gates on bitcoin: If you have less money than Musk, watch out – Guardian Mag Content Moderation Costs Social Media Companies Billions – Quora A digital dollar would help the U.S. and its allies keep China in check – CNBC Musk loses about $ 14 billion in one

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We are witnessing a replay of the post-GFC housing boom

CoreLogic has released its full dwelling values results for February, which confirmed that a synchronised boom has developed with every capital city market and Australia’s regions reporting strong price inflation. The results are summarised in the table below: The 2.1% price growth nationally was the strongest month-on-month increase since August 2003: According to CoreLogic’s research

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Immigration collapse is no ageing disaster

Suncorp Group chair Christine McLoughlin has called on the federal government to expedite the opening of Australia’s international border. She claims that businesses are suffering from the ban on international visitors, such as international students, migrant workers and tourists. She also claims that the economy will suffer from having a smaller, older population: “We’ve got