Leith van Onselen


Michael Pettis kicks Aussie butt on the ABC

By Leith van Onselen Please find above a fantastic interview between Peking University’s Professor Michael Pettis and The Business’ Tickey Fullerton discussing the ructions within the Eurozone, China’s efforts to rebalance, and what it means for Australia. The full transcript is provided below, whereas the original HD video can be viewed here. TICKY FULLERTON, PRESENTER:


More evidence of fundamental value in US property

By Leith van Onselen A few weeks back, I posted the below chart from the Economic Report of the President showing how US housing has returned, more or less, back to fundamental value as measured by house prices versus rents (see next chart). Following large declines from 2007 through 2011, housing prices bottomed out in early


The debt that’s killing the UK economy

By Leith van Onselen Early last year, McKinsey Global released research showing that the UK economy had the third highest debt in the developed world, behind Ireland and Japan (see next chart). McKinsey’s analysis followed an earlier Strategy Note by Tullett Prebon, which argued that the British economy had become critically dependent on private borrowing


Links 27 March 2013

Global Macro/Markets: Stocks Fall Globally as Cyprus Deal Dissected – Wall Street Journal Identifying Demand and Supply Shocks in the Oil Market – The Big Picture Why the world needs reckless bankers – Financial Times Financial crisis far from over, says outgoing Bank of England chief – The Guardian ‘Did the Iraq War Cause the


Captain Glenn on financial regulation overload

By Leith van Onselen Please find below today’s somewhat boring speech by Reserve Bank Governor, Glenn Stevens, entitled Financial Regulation: Australia in the Global Landscape, presented to the Australian Securities and Investments Commission (ASIC) Annual Forum. The speech provides an overview of recent developments in the global financial regulatory architecture since the onset of the


Residex sees improving housing market on shrinking volumes

By Leith van Onselen Please find below Residex’s latest housing market update, which includes house and unit price results as at end-February 2013, whereby house prices rose at the national level (+0.96%) and unit prices fell (-0.15%). In this month’s report, Residex’s founder, John Edwards, sees continued improvement in the housing market. There is one


The mining cliff won’t be bridged

By Leith van Onselen Please find below a spectacular chart pack from Westpac’s economics team, which provides detailed analysis of the outlook for the Australian economy at both the national and individual state levels. A summary of the national economic outlook is provided below: The Coast-to-Coast Report highlights how the Australian economy has lost considerable


UK house prices lift on mortgage stimulus

By Leith van Onselen Recent mortgage stimulus launched in the UK seems to have done the trick, with home prices now starting to lift. According to Hometrack, UK house prices rose the most in three years in March, led by a big jump in London, where prices rose by 0.7% over the month. Hometrack’s results


Weekly RP Data property wrap

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 24 March 2013. This week’s report includes: Latest weekly dwelling value results; Latest median house & unit prices; Average time on market & vendor discounts; Auction results & clearance rates;


QLD transfers and mortgages buck FHB strike

By Leith van Onselen The Queensland Department of Environment and Resource Management (DERM) has released data on housing transfers and mortgage lodgements for the month of February. According to DERM, the number of housing transfers and mortgage lodgements fell by -10.1% and -3.7% respectively in February 2013. However, on a year-on-year basis, housing transfers rose


Melbourne unit boom squeezes landlords

By Leith van Onselen Following on from last week’s post on the huge surge in Melbourne CBD apartment approvals, the Age over the weekend published a great article on the large lift in apartment approvals across Melbourne’s CBD and inner suburbs, which is depressing apartment rents across the city: The number of apartments built in


Links 26 March 2013

Global Macro/Markets: Economic Outlook and the Role of Monetary Policy – The Big Picture North America: Bernanke rejects devaluation concerns – Business Spectator Bernanke Speech: Monetary Policy and the Global Economy – Federal Reserve Goldman Sachs: Sorry, U.S. manufacturing isn’t coming back – Washington Post The Housing Bubble Is Back – Forbes What Can the


Doug Cameron calls for higher taxes

By Leith van Onselen Hot on the heels of Per Capita’s 2012 tax survey, which found that Australians have become simultaneously more averse to paying tax but also want greater government investment in essential social services, Senator Doug Cameron has come out today requesting that the Government raise taxes and improve budget efficiency in order


HIA sees “steady state” housing market

  By Leith van Onselen The Housing Industry Association (HIA) has today released a Research Note entitled “Perspectives on Australian House Prices”, which attempts to review the state of the housing market with a view to establishing the likely future direction of prices. The HIA first plots house prices and the number of house transactions


Aussies sure do hate paying tax

By Leith van Onselen Per Capita has released its third annual tax survey, based on a representative sample of 1,422 Australians in October 2012, which reveals that Australians have become increasingly averse to paying tax and highly skeptical of government expenditure. A summary of the survey’s findings and the key charts are provided below: Australians’


Auction clearances survive ‘Super Saturday’

By Leith van Onselen The weekend just gone was dubbed “Super Saturday” for the 2,415 auctions scheduled across Australia’s capital cities, which was the highest number of auctions since late-2010: Based on the available data, the auction market performed solidly, with preliminary clearance rates in the mid-to-high 60% range recorded in the two major auction


Dutch housing downturn crunches economy

By Leith van Onselen I have written previously how the Netherlands housing system all but guarantees unaffordable housing and a susceptibility to housing bubbles, via: ridiculously easy credit, with a third of mortgages guaranteed by the government; mortgage interest tax relief and generous subsidies offered to home buyers; a dysfunctional rental market that encourages households


OECD sees endless China boom

By Leith van Onselen Over the weekend, the OECD released a detailed 161-page economic survey on China, which provided a rosy assessment of China’s economic prospects. The OECD notes that China’s economic performance has been spectacular, with its rate of growth over the past 30-years being the fastest in history (see next chart). A key


Links 25 March 2012

  Global Macro/Markets: Leverage In The Western World – Business Insider International finance: The end of an era? – The Economist Hedge funds storm back into form in 2013 – The AFR Gary Shilling: Global economies face an era of deflation, not inflation – Bloomberg North America: Why the Government Is Desperately Trying to Inflate


Weekend links 23-24 March 2013

Global Macro/Markets: Demand for stock funds plummets over Cyprus fears: Lipper – Reuters North America: US February oil demand down 4.1 pct from year ago -API – CNBC Older Households Loading Up on Debt – Wall Street Journal Baby Boomers Less Fit Than Last Generation, Study Finds – New York Times. And their kids are


US LNG exports set to explode?

By Leith van Onselen I have written extensively on how the burgeoning shale gas boom underway in the US poses a direct threat to Australian exports of thermal coal and liquefied natural gas (LNG). Australian thermal coal exports have already been adversely affected as significant coal-to-gas switching in US electricity generation has led to large


Melbourne to tower over other capitals

By Leith van Onselen Earlier in the week, Houses and Holes reported how Victoria’s planning minister, Matthew Guy, had approved the monumental Australia 108 development, which would become the tallest tower in the Southern Hemisphere, and that Mr Guy had approved more than 17,000 apartments in 30 projects within the City of Melbourne since taking office


Weekly RP Data house price update

By Leith van Onselen In the week ended 21 March 2013, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, recorded a 0.04% increase, which followed last week’s big 0.47% increase. It was also the sixth straight weekly rise (see next chart). Value gains were driven by Perth,


The war over Auckland land supply hots up

By Leith van Onselen The war over Auckland land supply has continued this week, with the new Minister for Housing, Dr Nick Smith, uping the ante on his promise to smash Auckland’s urban growth boundary (called the “Metropolitan Urban Limit” or MUL). Regular readers might recall that the Auckland City Council had moved to shift


Links 22 March 2013

Global Macro/Markets: S&P 500 near Parity with Gold – Avondale Asset Management Recession? No, According to Leading Economic Indicators (LEI) – The Big Picture Fund Managers Are Alarmingly Bullish! – theshortsideoflong.blogspot.com Map: The world, color-coded by countries’ openness to foreigners – Washington Post North America: President Obama and Dodd-Frank: Why Won’t He Defend It? –


Mining and the economy

By Leith van Onselen The Reserve Bank of Australia (RBA) today released its March Quarter Bulletin, which included a paper entitled The Resources Boom and the Australian Economy: A Sectoral Analysis, which attempts to explain the three phases of the resources boom and their effects on the domestic economy. As expected, it provides a fairly