Unconventional Economist

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Links 23 November 2020

Global Macro / Markets / Investing: The World Bank warns The G20 from ignoring the debt problems – Guardian Mag The Dow has completely recovered its 2020 bear-market loss. Here’s what comes next – Market Watch Euro Tops Dollar as Payments Currency for First Time Since 2013 – Bloomberg Apple to Pay $113m to Settle

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Weekend Reading: 21-22 November 2020

Global Macro / Markets / Investing: Gold fell to its lowest level in 4 months – Guardian Mag ‘Attack of the debt tsunami’: Coronavirus pushes global debt to record high – CNBC Nvidia Crushed Earnings Estimates. Its Stock Is Slipping – Barrons Americas: 12 Million To Lose Jobless Benefits The Day After Christmas Unless Congress

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Retailers anticipate solid Christmas sales

Roy Morgan’s annual Christmas retail sales forecasts, conducted in conjunction with the Australian Retailers Association, suggest Australians will spend over $54.3 billion across retail stores during the Christmas trading period, an increase of 2.8% from the $52.9 billion of retail expenditure during the 2019 Christmas trading period: Roy Morgan’s annual Christmas retail sales forecasts conducted

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Final auction clearance rate strengthens

CoreLogic has released its final auction clearance results for last weekend, which reveals that the final national clearance rate firmed to 70.6% from 69.0% the prior week: Sydney’s auction clearance softened to 71.3% from 73.3% the prior week, whereas Melbourne’s firmed to 69.7% from 68.0%. As noted by CoreLogic: There were 1,728 capital city homes

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Mirvac tells states to wean off stamp duty

NSW Treasurer Dominic Perrottet’s plan to phase out stamp duty on property transactions and replace it with a land tax has won broad support, including from Mirvac CEO Susan Lloyd-Hurwitz. Lloyd-Hurwitz says stamp duty is a “very poor tax” that lessens mobility and keeps people in the wrong type of housing “for too long”. Lloyd-Hurwitz

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Senate must reject criminal mortgage push

21 months is a long time in Australian politics. In February 2019, the Kenneth Hayne released his final report from the banking royal commission which, as its first recommendation, directed the government to keep responsible lending rules: This recommendation came after the Hayne royal commission documented extensive cases of criminal lending and behaviour, leaving Australia’s

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ABS: Business confidence and revenue outlook improves

The ABS has released its Business Indicators, Business Impacts of COVID-19 survey for November, which shows widespread improvement in confidence and revenues: Almost a quarter (24 per cent) of businesses reported an increase in their monthly revenue in November compared to 16 per cent in October, according to results released from the Australian Bureau of Statistics

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12% compulsory superannuation would lower lifetime incomes

The full report of the review commissioned by the federal government into retirement income will be released on 20 November, but its key findings have been made known. Importantly, the report suggests that lifting the compulsory superannuation rate to 12% could disadvantage low-income earners and reduce workers’ lifetime incomes: “A rate of compulsory superannuation that

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Half of Aussie renters experiencing financial stress

The Consumer Policy Research Centre (CPRC) has partnered with Roy Morgan Research to conduct monthly surveys measuring the financial impacts and consumer experiences of COVID-19 across essential and important services markets, including housing, energy, telecommunications, credit and insurance. The September Report has just been released which shows that around half of Australian renters are experiencing

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Australian policy makers don’t want higher wages

The Guardian’s Greg Jericho argues the Morrison Government is using the COVID-19 pandemic to lock in low wages and insecure work: One thing that could improve the [low wage] situation is for the federal government to help spur wages growth by lifting its 2% annual wage growth cap… The government instead announced that “commonwealth public sector

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Youth unemployment surges

Yesterday’s ABS labour force release for October revealed that Australia’s youth unemployment – i.e. for those aged 15 to 24 years old – surged despite solid growth in jobs. The headline youth unemployment rate rose 0.9% to 15.6% and remains nearly three times higher than the rest of the labour market (5.4%): However, youth jobs

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Links 20 November 2020

Global Macro / Markets / Investing: An unemployment statistic that goes uncounted: the long-term unemployed – The Guardian Mapped: The Top Export in Every Country – Visual Capitalist Airbnb refunded $1 billion in bookings this year – QZ Bank of America advises selling short-term amid market euphoria Market’ optimism about economic growth is at 20-year

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Aussie companies privatise profits, socialise losses

The Australian taxpayer is businesses’ best friend. We have already witnessed company profits soar during the pandemic courtesy of JobKeeper, while workers’ wages and salaries tanked: Senior executives of Australia’s largest companies also secured massive bonuses after claiming JobKeeper subsidies: The Morrison Government’s JobMaker program will keep the largesse flowing by subsidising the wages of businesses

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Another Victorian COVID-19 failure emerges

Days after the Australian Medical Association (AMA) slammed the Victorian Health Department over its COVID-19 response, another shocking failure was revealed at a parliamentary inquiry into the state’s contact-tracing regime: A worker infected with coronavirus from Melbourne’s Cedar Meats was twice turned away from COVID-19 testing at least 10 days before the first case was

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ABS employment in detail: recovering

As summarised earlier, the Australian Bureau of Statistics (ABS) today released its labour force report for October, which registered a 0.1% rise in the official unemployment rate to 7.0% but a 1.4% increase in jobs: Full-time jobs surged by 97,000 and part-time employment by 81,800: The participation rate rose by 0.95% to 65.81%, which is

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Sydney airport land deal shows need for federal ICAC

A September report from the Australian National Audit Office (ANAO) slammed the Department of Infrastructure (DOI) for purchasing the land from a billionaire family at 10 times its market value in what it calls a “significant and unusual transaction” related to the Western Sydney Airport. The land known as the Leppington Triangle was purchased by

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Zero new COVID-19 cases recorded with SA cluster under control

Australia recorded 8 new COVID-19 infections overnight; however these were returned travellers in hotel quarantine: Importantly, there were zero new locally transmitted cases, with South Australia seemingly getting their outbreak under control after isolating 4,000 people and implementing a full 6-day lockdown: Australia now has 96 active COVID-19 cases, of which 45 are locally acquired:

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12% superannuation hangs in the balance

The federal government will release the findings of its review into retirement incomes on Friday. Amongst other things, the review is believed to support a recent warning from Reserve Bank governor Philip Lowe that the legislated increase in the superannuation guarantee (SG) will reduce wages and economic growth. The SG is slated to rise from

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Deloitte: Australia awash with small business ‘zombies’

Deloitte has released its weekly economic briefing, which Australia’s COVID-19 induced economic recession has put many businesses under financial pressure. But unusually, the number of Australian businesses that have had to close down due to running out of money (become insolvent), has actually fallen in 2020. This is partly due to economic stimulus measures that

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CBA Mortgage lending consolidates in October

CBA has released its internal mortgage data for October, which shows that mortgage lending consolidated in October, whereas lending for renovations rocketed. Consumer and business lending also remained weak. Key Points: There was a consolidation in lending for housing in October after several months of very strong growth. But lending for renovations continued to rocket

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SEEK jobs ads rebound

From SEEK: OVERVIEW OF OCTOBER 2020: STATE OF THE NATION: SEEK job ads are up by 8.5% month-on-month (m/m). SEEK job ads are down 11.7% year-on-year (y/y), which is the smallest y/y decline since the pandemic began. Industries with the highest job ad growth m/m by volume are Trades & Services, Healthcare & Medical and

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Don’t sell NBN to Telstra

Telstra has embarked on a major restructuring as it gears up to purchase the National Broadband Network (NBN) from the Australian Government: The restructure involves creating three separate legal entities under a Telstra Group umbrella, which Mr Penn and Telstra chief financial officer Vicki Brady said could theoretically be spun off as separately listed companies,

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Links 19 November 2020

Global Macro / Markets / Investing: Warren Buffett appears to be buying a secret stock that could be revealed within weeks – Business Insider Rising gold prices – Business Devilhunter Bond Investors Win Big Betting on U.S. Consumer – WSJ Quant Shock That ‘Never Could Happen’ Hits Wall Street Models – Bloomberg Americas: WSJ: Hundreds