Unconventional Economist

39

OECD: Australian housing still overvalued

By Leith van Onselen The OECD released comparative data on housing valuations overnight. And despite Aussie John Symonds’ claim that “there’s never been a better time to buy property”, it showed Australian housing to be the sixth most over-valued in the OECD, with house prices relative to incomes 21% over-valued and prices relative to rents

15

Links 30 May 2013

  Global Macro/Markets: US Treasury Trading Volume Hits Record – Business Insider Treasuries Fall as Bonds Worldwide Drop Most in Almost a Decade – Bloomberg After crunching Reinhart and Rogoff’s data, we’ve concluded that high debt does not cause low growth – Quartz QE: Because Nobody’s Got Any Better Ideas – pawelmorski.com Central Banks Act

6

PIMCO warns on mining hole

By Leith van Onselen One by one, the international investment community’s love affair with the Australian ‘miracle economy’ appears to be coming to an end. The latest salvo comes from the world’s biggest bond manager, PIMCO, which has published an interesting report supporting MacroBusiness’ warnings of a big hit to Australia’s growth as the mining

31

Mining investment has peaked

By Leith van Onselen The ABS has just released data on the value of construction work done for the March quarter of 2013, which registered a seasonally-adjusted -2.0% fall in total construction activity over the March quarter, but a 0.2% increase over the year. Analysts had expected a 1.0% increase over the quarter. The fall

32

US house prices, sentiment surge

By Leith van Onselen The recovery of the US housing market rolls on, with the release of the Case-Shiller 20-city house price index recording the 12th consecutive monthly gain, with prices rising by a seasonally adjusted 1.1% in March and by 10.9% year-on-year. It was the strongest annual price growth since April 2006. However, house prices

6

Links 29 May 2013

Global Macro/Markets: Household aggregate wealth in the main OECD countries from 1980 to 2011: what do the data tell us? – repec.org A Divergence Is Opening Up Between Inflation And The Stock Market – Pragmatic Capitalism North America: U.S. Oil Boom Divides OPEC – Wall Street Journal Consumers Reluctant to Boost Spending, Despite Falling Gas

39

Gold is different

Cross-posted from Bullion Baron Just a brief post today to share a recent article on Gold by David Evans. Those who have been reading my blog long term may remember that I saw David present at the 2011 Gold Symposium and he also founded Gold Nerds, a research tool for picking stocks in the precious metals sector (a

8

High AUD punishes manufacturing exporters

By Leith van Onselen The Australian Bureau of Statistics (ABS) today released data on the characteristics of Australian exporters. According to the ABS, the overall number of exporters in Australia fell marginally over the 2011-12 financial year, with a -10% reduction in services exporters more than offsetting a 1% increase in goods exporters (see below

19

RP Data: Confidence in housing still strong

By Leith van Onselen RP Data, in association with Nine Rewards, has just released its May housing market sentiment survey (below), which asked 1,030 participants a range of questions on what they expected from Australia’s property market over the next six to twelve months. According to the survey results, housing market sentiment remains fairly strong,

23

High home ownership bad for employment?

By Leith van Onselen Overnight, the Peterson Institute of International Economics (PIIE) released an interesting study exploring the hypothesis that high home ownership damages the labour market. The study, which is based on an examination of data from the US, found that rises in the rate of home ownership are a precursor to eventual sharp

78

Building our way out of the mining capex hole

By Leith van Onselen Jessica Irvine has posted an interesting article on Business Spectator today arguing that Australia’s governments should borrow and build infrastructure in order to fill the void left as the mining investment boom unwinds. Let’s take a look: Australia has a significant urban infrastructure deficit, and a deep pool of superannuation savings

5

Links 28 May 2013

Global Macro/Markets: Economic reality finally cracks market fervor – Reuters Reinhart and Rogoff defend themselves – Econbrowser North America: Larry Summers has an edge in the race to head the Federal Reserve – Financial Times The Obamacare Shock – New York Times Californias New Problem – Too Much Money – New York Times Stiglitz Says

24

REIA slams falling FHB subsidies

By Leith van Onselen Back in February, after first home buyer (FHB) mortgage demand collapsed in New South Wales and Queensland, I made the following statement: Expect political recriminations to fly over first home buyers being ‘locked-out’ of home ownership, as well as increased special pleading from the property industry demanding that taxpayer funds once

29

Ignoring the land price gorilla

By Leith van Onselen In Wayne Swan’s weekly economic note, published yesterday, he reiterated the Treasury’s/RBA’s expectation that the non-mining economy (read housing construction) would fill the void left as the mining investment boom unwinds: We see evidence all the time that Australia’s economy is currently undergoing some substantial transitions… These challenges were underscored on

70

I’m the Kouk and I’m addicted to daily house prices

By Leith van Onselen The “Greenspan put” was a term coined in 1998 after the Federal Reserve, under Chairman Alan Greenspan, dramatically lowered interest rates following the collapse of the investment firm Long-Term Capital Management. By allowing investors to borrow funds cheaply, the Federal Reserve effectively acted to prop-up securities markets, thereby averting a potential

12

Auction clearance rates dip (updated)

By Leith van Onselen The auction clearance rate in Australia’s biggest auction market – Melbourne – fell slightly over the weekend, with 71% of the 665 auctions reported to the REIV selling, with 40 auctions still listed as “no result”, which will likely lead to some minor downward revisions to the clearance rate as the

60

Secret of the Howard Government’s surpluses

By Leith van Onselen Little-by-little, inch-by-inch, the common misconception that the Howard/Costello Government were fiscal superheroes is unravelling and the truth is being revealed. The latest salvo came from the Sydney Morning Herald’s economics editor, Ross Gittens, who published a well reasoned article on Saturday arguing that the lion’s share of the current budget deficit

16

Links 27 May 2013

Global Macro/Markets: How Gold Rallied for Years on a ‘Misunderstanding’ – CNBC The case for 4% inflation – VOX Stock markets lose nerve on fears of end to quantitative easing – The Guardian Warning signs at the punchbowl – The Age North America: Gold Drops as U.S. Growth Signs Fuel Concern Fed to Cut Stimulus

12

Canadian housing market hits the wall

By Leith van Onselen The Canadian housing market, ranked by The Economist as one of the world’s most overvalued, looks to have finally hit the wall. After peaking in August last year, house prices have begun to fall, down -1.2% nationally (see next chart). More importantly, a new report from the Canadian Association of Accredited

9

Links 24 May 2013

Global Macro/Markets: Austerity: the history of a dangerous idea – The New Yorker ‘Recessions Hurt, but Austerity Kills’: Study – CNBC The banking crisis as a giant carry trade gone wrong – VOX Don’t fear the bubble – Reuters Are we living in a time of asset bubbles? – Marginal Revolution Fears grow over EM