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The European economy sinks

I discussed yesterday that the success of last week’s EU summit needed to be measured on a political scale not an economic one. There were obviously economic ramifications from the outcome, but the ratification of whatever they eventually turn out to be is likely to take many months of further politicking. In the meantime the downward


SQM hits “inaccurate” RP-Data daily index

Please find below a press release from SQM Research questioning the efficacy of the RP Data-Rismark daily home values index: Upon the back on recent commentary released by RP Data-Rismark in relation to increasing house prices in Australia, property research house SQM Research would like to take this opportunity to formally state our contrasting beliefs


NAB’s online index slows again

NAB has released its Online Retail Index for May and it shows ongoing deceleration: For the 12 months ending May 2012, Australia’s total online spending was around $11.3 billion. This level is equivalent to 5.2% of traditional bricks & mortar retail spending (excluding cafés, restaurants and takeaway food) for the year ended April 2012. The NAB Online


Introducing “Macro Investor” (updated)

In 2011/12, the MacroBusiness blog forced a passage through the bog that is Australia’s failing business media. The success of the site was quite something. With a founding investment of $1,500, zero marketing, no employees and no supporting network, MB reached levels of traffic in May ’12 at roughly one third that of Business Spectator


Currency ideals

The slow motion train wreck that is the Euro is grinding relentlessly on. Commentators are smugly, if not gleefully, announcing the currency’s imminent demise, enjoying their triumphant occupancy of the moral high ground. The European elites are just as determinedly asserting that the currency will survive, looking for some sand to stick their heads in.


Australia’s commodity volume bonanza

The Bureau of Resource and Energy Economics (BREE) is out with its latest quarterly assessment of commodity markets. I like BREE. They tend to forecast more conservatively than one might expect. The major story emanating from the latest update is the fruits of the long predicted surge in volumes in Australia’s major commodity exports, which


Perpetual no longer

The era of the financialisation of Western economies has come to a grinding halt, replaced by an era of de-leveraging, dis-leveraging or whatever term one wants to coin. The shrinking of the finance sector is partly ameliorated in Australia because of the $1.3 trillion super pool and inflow of funds from the levy, but there is nevertheless a new era


McKibbin looks beyond the boom

At the AFR today, Professor Warwick McKibbin offers us a ball tearing narrative for our times. It’s worth taking some time to dissect this piece as it is rare that we get something beyond the usual drivel. McKibbin begins: Many policymakers fail to realise that a long-term transformation of the global economy is under way


China’s, ahem, “stabilising trade”

Courtesy of Also Sprach Analyst. While country A’s import from country B should be equal to the export from country B to country A, statistics from different countries do not always match up.  That is understandable as there are differences in how things are counted. In the China case, the difference itself is not what interests me


The European summit is a write off

Spain took a beating overnight after Moody’s downgraded the long term debt and deposit ratings of 28 Spanish banks on the back of the sovereign downgrade earlier in the month. Yields on short term debt spiked at auction: Spain’s short-term borrowing costs nearly tripled at auction on Tuesday, underlining the country’s precarious finances as it struggles against


Are bonds or equities right about the future?

The stress in the global capital markets has some strange consequences. In an environment in which most developed economies have, in effect, have little or no cost of capital, many of the usual inter-relationships do not behave normally. The centre  may not hold, as it were. Dividend yields are above bond yields in all major developed economy markets. Macquarie is pointing out that


Ten trends in a yuan float

ANZ has produced an interesting note on the capital market and currency shifts we are likely to see in the build up to a full float of the Chinese yuan. To put it mildly, this is a big deal. The beginning of the end of US hegemony, if we’re not already past that point… Greater


Bill Evans abandons July cut

From my favourite bank economist: The Reserve Bank Board meets next week on July 3. We had expected the Board to decide to cut rates by 25bps. However, the contents of the Minutes for the June Board meeting make it clear that a cut in July is unlikely. Despite what we considered to be a


REIV capitulates

By Leith van Onselen The release of the 2012 REIV State of the Victorian Property Market report (below) provides a sobering assessment. According to the REIV, transaction levels – both private sales and auctions – are well down on the five-year average (see below table). Which, given that transaction volumes typically drives prices, suggests that


China’s hot and cold shipping

Bloomie has got some new indexes for shipping that are showing a rather mixed picture for the Chinese economy: On the on hand, we see a pretty healthy bounce in containerized traffic (red). At the same time, however, China’s Coastal Bulk Freight Index(white) is flat following the big fall last year. The orange line is


Australian banks most profitable in the world

The Bank of Interntional Settlements (BIS) released its 2011/12 annual report over the weekend and the results were spectacular for Australia’s banks for the year: As a percentage of total assets, that’s Australian banks at number one, with net interest margins at fourth, loan loss provisions at sixth and operating costs at second. No wonder


‘Twas the land bubble that killed productivity

Even though more words have been written about Australia’s productivity performance than most other economic issues, I have learnt very little about what our productivity trends really mean. Recently, the RBA tried to unravel the mystery. Here at MacroBusiness my wise colleagues have often penned their interpretation of events. To throw a little more confusion


The semiotics of markets

The Economist this week had an interesting discussion about the epidemiology of financial contagion. It is interesting to observe the use of language. The article starts out with a correct observation about how economists choose a particular type of language used to lend their observations credibility: “Economists, who like to borrow medical terms to lend themselves