Unconventional Economist

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Victorian housing activity still failing to launch

By Leith van Onselen The Department of Sustainability & Environment (DSE) has released data on the number of housing transfers and mortgage lodgements/disharges across Victoria in August, which showed ongoing weakness in both housing turnover and mortgage demand. Looking at the transaction side of the market first, you can see that the number of transfers

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Monetary expansion will continue despite taper

From Capital Economics comes its latest Monetary Indicators Monitor report, which forecasts an additional $US400 billion of asset purchases (quantitative easing) by the Federal Reserve between now and mid-2014 even if it begins to “taper” (wind-back) its asset purchase program: Regardless of whether the Fed opts to reduce its monthly asset purchases or not this

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Weekly short report

From Damian Klassen at Wilson HTM comes the Weekly Short Report: At the aggregate level there has not been a lot of movement over the last 7 days, resources sector shorting levels remain at 2 year lows, short selling in financials is at a record low – noting that records only exist for a little

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Links 17 September 2013

Global Macro / Markets: Treasurys, European stocks and currencies rallied after Lawrence Summers’s decision to pull out of the Fed contest – Wall Street Journal Hedge funds and the last half-decade: you don’t know what you’ve got ’til it’s gone – Financial Times North America: Larry Summers’s Not-So-Illustrious Predecessor – Bloomberg Why Lawrence Summers Withdrew

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Who will lead the Fed now?

By Leith van Onselen Chris Joye has this afternoon produced another interesting report in the AFR, featuring an exclusive interview with one of the few people to have worked closely with all of the main candidates to replace Ben Bernanke as chair of the Federal Reserve when his term expires in January: professor Warwick McKibbon.

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Lehman’s collapse shows change must be cultural

Cross-posted from The Conversation The weekend just gone witnessed the 5th anniversary of the collapse of Lehman Brothers, an event that tipped the world into economic crisis and shoved banking into the spotlight. The critical state of the world’s banks during the crisis has meant nearly everyone seems to have an opinion about how to

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Questioning the Coalition’s infrastructure priorities

By Leith van Onselen David Bassanese has written a good article today in the AFR supporting in principle (as I do) increasing infrastructure investment as the mining investment boom unwinds, but questioning the new Coalition Government’s infrastructure priorities, which seem to be based on a pre-conceived bias towards roads rather than an objective assessment of

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Australian dollar bounces back on Summers’ exit

By Leith van Onselen On Friday, the Australian dollar got hammered on speculation that former Treasury Secretary, Larry Summers, would be appointed by US President Barack Obama as the next chairman of the Federal Reserve Board, replacing Ben Bernanke whose tenure expires in January 2014. Now Summers has withdrawn his name from consideration for Federal

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Auction clearances power on

By Leith van Onselen Reported auction clearance rates in Australia’s two biggest markets were strong again over the weekend. In Australia’s biggest auction market – Melbourne – the preliminary clearance rate was 76% on 832 auctions reported to the REIV, although 105 auctions listed as “no result”, meaning there will likely be some downward revision

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Chris Joye talks more housing sense

By Leith van Onselen Chris Joye has followed-up on his fine work last week, warning over imbalances that may be developing in the housing market in the above Radio National interview, aired Sunday morning. According to Joye: Australia’s banks are incentivised to maximise credit growth in order to maintain pre-GFC levels of profitability. Accordingly, Australia

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Boomers stressing Australia’s superannuation system

By Leith van Onselen Last month, I asked whether the Baby Boomer generation had blown their retirement following a stinging critique by CPA Australia, which argued that many Baby Boomers had been spending and running-up big debts in anticipation of receiving a superannuation lump sum once they reach retirement, leaving them likely to be reliant

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APRA to curb investor loans?

By Leith van Onselen Goldman Sach’s Australian chief economist, Tim Toohey, believes that the Australian Prudential Regulatory Authority (APRA) may look to impose macro-prudential curbs on investor morgage borrowing should Australian house price growth accelerate. From the Weekend Australian: Investors have contributed 54 per cent of the bounce in mortgage lending in the past six

9

Hopefully, an end to the 24-hour spin cycle

By Leith van Onselen The internet and modern technology are wonderful. They allow fast dissemination of information, break down barriers to business and social interaction, and can enhance overall productivity and living standards by lowering costs and raising output. But there is also a dark side, an example of which is being on-call 24 hours

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Westpac Red Book shows consumer green shoots

By Leith van Onselen Late Friday, Westpac released its quarterly consumer Red Book, which provides an in-depth assessment of the current state of the Australian consumer. This quarter’s release, which captures the mood in the week prior to the Federal election, shows a consumer that is growing more confident and becoming decreasingly risk averse, but

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RP Data weekend market summary

By Leith van Onselen Please find below RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 15 September 2013. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates Latest median house & unit prices; Average time on market & vendor discounts;;

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Links 16 September 2013

Global Macro / Markets: BIS veteran says global credit excess worse than pre-Lehman – The Telegraph North America: Wall St. Exploits Ethanol Credits, and Prices Spike – New York Times Five years after Lehman, Americans still angry at Wall St. : Reuters/Ipsos poll – Reuters 3 Democrats Say They Will Oppose Summers for Fed –

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The RBA can learn from straight-talking RBNZ

By Leith van Onselen The Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ) could not be more different. The RBA’s speeches and commentary often feel like they have come directly out of a bank’s economics/marketing department, aimed squarely at appeasing foreign bond investors, rather than telling it as it is.

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Links 13 September 2013

Global Macro / Markets: Financial Crisis Retrospective: 5 Years After Lehman Brothers’ Bankruptcy – Bloomberg Businessweek North America: Why Michael Woodford Thinks the Fed Should Taper – Bloomberg Tired Of Inequality? One Economist Says It’ll Only Get Worse – NPR Jobless Claims Slump as Two U.S. States Upgrade Systems – Bloomberg Summers Seen Prone to

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House prices, interest rates and land supply

Cross-posted with permission from Dr Alan Moran at Catallaxy Files It is astonishing the disconnect between those looking at housing from the financial market perspective and those of us looking at the regulatory barriers. Christopher Joye in the AFR today discusses a debate he has been having with fellow self-proclaimed housing guru Gerard Minack.  Apparently these

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Has Ireland’s world-beating housing bust ended?

By Leith van Onselen Back in April, I wrote how Ireland’s housing crash, whereby values had fallen by over 50% peak-to-trough, was reportedly the biggest property crash on record, wiping-out an estimated  €257bn inequity (see below chart). Finally, after six years of pain, reports are now emerging of a pronounced pick-up in housing activity and

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Norway mirrors Australia at the polls

Cross-posted from The Conversation Imagine a country with a strong, well-performing economy, ruled by a centre-left party that has achieved a number of key reforms. Yet, despite having a good story to tell about strong growth, low unemployment, and low inflation it is heavily defeated at the polls, and replaced by a resurgent centre-right government.