Featured Article

39

Credit Suisse: Why RBA must move to cut the cash rate

Again great stuff from Damien Boey at Credit Suisse who has a much better grasp of the economy than does the lunatic RBA: By now, CPI, unemployment and RBA forecast downgrades are becoming old news … The Consensus view is that the RBA will moderately downgrade its forecasts, but not capitulate on its rate stance

37

Back to the bad old days for Chris Joye

From Chris Joye today: If Prime Minister Scott Morrison pulls off a miracle and wins the May election, housing conditions should stabilise as investors pile back into the market to pick up cheap assets once the threat of Labor’s deleterious tax changes is removed. I also expect the accessibility of credit to improve following the royal

37

Recessionberg, Scummo endorse criminal banking

The lead into Hayne pain has begun in earnest with the corrupt Coalition preparing the ground to do nothing, via the AFR: Mr Frydenberg said the principal focus of the government’s response would be to protect consumers and restore their faith in the sector but ensuring a free flow of credit to households and businesses

24

Morgan Stanley: RBA lost, rates and AUD to fall

From Morgan Stanley today comes some sense at last, via ForexLive. On the NAB survey: decline was led by a noticeable reduction in profitability and trading conditions the lowest level for both since mid-2014 The weak business sentiment compounds the decline in confidence we have already observed on the household side On the RBA: RBA

122

Aussie auto delinquencies surpass GFC high

By Leith van Onselen Hot on the heels of the heavy 15% decline in new car sales in 2018, along with the 9% decline in motorcycle sales, Moody’s has released the below chart showing that delinquencies for Australian auto loan asset-backed securities (ABS) has surpassed Global Financial Crisis (GFC) levels: Auto loans are non-revolving with

97

Foreign buyers flee Australian housing

NAB has released its Q4 property survey, which confirms that foreign buyers continue to flee Australian property, exacerbating the downturn: The boom in Australian real estate sales to foreign investors has clearly run its course, with NAB’s latest survey results highlighting a trend decline in foreign buying activity over the course of 2018. In Q4,

33

FT: Aussie house prices highest risk of crash in G10

Via the FT today: Free iPads, rental guarantees and an eye-watering A$100,000 ($72,000) off the price of an apartment are some of the sweeteners on offer from property developers amid the worst housing downturn in Australia for 35 years. … according to Morgan Stanley, which warned this week the slump could torpedo Australia’s run of 27

76

Mark Latham scythes into NSW election

Via The Australian comes Mark Latham campaigning in Western Sydney: …According to Mr Latham, the Berejiklian government’s much-vaunted “hi-tech Disneyland” ­vision for the area was another casualty of the state government’s “disastrous lack of planning” and its failure to manage the city’s migrant “population ­explosion”. …“If you can’t build a couple of tram tracks on the

36

Property investor confidence craters

Via Martin North: Following on from our mortgage stress report for December 2018, which we released yesterday, we complete our monthly data series with the release of the December Household Financial Confidence Index, our gauge of how households are feeling about their financial situation. The overall index fell again in December to an all-time low of

24

Australian dwelling approvals are crashing

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of November. At the national level, the number of dwelling approvals fell by a seasonally adjusted 9.1% to 15,465. The overall fall in approvals was driven by the volatile unit & apartment segment (-17.9%), whereas the detached

33

And the answer to rising NT unemployment is…coolies galore!

We live in very strange times. The Northern Territory is broke, its economy is slowing fast post-Inpex, and its labour market is loosening at a good clip: With historically weak wages falling in real terms: The answer? Coolies unlimited! Via SBS: From cooks to family day care workers to motor mechanics, low skilled migrants will

74

The Coalition’s Murdoch fixation is killing it

As I wrote last year, the Australian political economy has splintered into discrete “identity” groups that replicate the machinery of the old nation state: In Australia the phenomenon of identity politics has gone much further. The fragmentation of national consciousness into vertical market identities has formed its own self-sustaining political economy structure. The Guardian is

68

Bowen lashes L-plate Treasurer’s property giveaways

Via The Australian: Shifting his focus from Bill Shorten’s proposal to limit negative gearing to new dwellings and the “retiree tax”, the Treasurer yesterday cited government analysis that showed Australians would be taxed up to 36.75 per cent on their capital gains under Labor’s policy, up from 23.5 per cent now. By comparison, US taxpayers

54

A Tyrannosaurus sized egg is about to land on the RBA’s face

It couldn’t happen to a nicer central bank. The world’s most corrupt monetary manager is about to do a spectacular volte face with seventeen twists. After years of pretending that it understands the economy, that Australia’s outlook is relentlessly bullish, that it was a good idea to supplant a mining boom and bust with a

64

Lazard: Aussie house prices to fall for six years?

Via Livewiremarkets comes Philip Hofflin at Lazard: The critical financial issue in the Australian economy at present is clearly the possible economic effect of the decline in home prices. We have been warning about high home prices and household debt since 2015, but have always known that the timing of any downturn would be difficult, if