Moody’s: Sweden, Canada, Australia housing banks at risk

Via Moody’s: Possible house price drop poses some risk for Canadian, Swedish, Australian banks House prices and household debt have risen to unprecedented levels in Canada, Sweden and Australia. This increases the risk that adverse economic developments could trigger a house price drop, leading to higher loan losses for banks. We have recently taken rating


Macro Morning (Trading Week)

By Chris Becker  The October non-farm payroll (NFP) print came and went on Friday night with no surprises, although a little on the disappointing side, it still pushed the headline unemployment rate down to 4.1% and reinforced the Federal Reserve’s resolve to hike interest rates sooner rather than later. While the longer term trajectory is


IT billionaire preaches immigration class war from harbour mansion

From Mr Scott Farquhar: Atlassian co-founder Scott Farquhar has warned the government’s proposed changes to modernise the visa system could stunt the growth of local tech companies, and are already causing harm, ahead of the expected release of the official report next week. The tech billionaire said Australian-based technology companies needed to bring in specialist top


Asian LNG customers demand more discounts as we overpay

Via Reuters: After getting Qatar and Australia to lower gas price, India today pitched for flexible terms for LNG purchase including provision of pricing review, flexible take or pay and abolition of destination restriction clause. Speaking at the LNG Producer-Consumer Conference here, Oil Minister Dharmendra Pradhan said the global LNG market is undergoing a major


Cutting sugar in beverages “could save 155,000 lives”

By Leith van Onselen The Obesity Policy Coalition has called for mandatory reformulation of sugary beverages following new modelling showing that at least 155,000 premature deaths would be averted if beverage makers slashed the energy content of their sugary drinks by 30%. From The Canberra Times: “The results are a clear demonstration of the harm


RBA still neutral

From the RBA: At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent. Conditions in the global economy have improved. Labour markets have tightened and above-trend growth is expected in a number of advanced economies, although uncertainties remain. Growth in the Chinese economy is being supported by increased


Netflix’s rise is free-to-air TV’s loss

Netflix continues to grow in popularity in Australia, with 7.6 million Australians now watching the online streaming service, according to a new Roy Morgan Research survey. By comparison, Australians continue to switch-off from free-to-air television: The growth of Netflix use over the past 18 months far exceeds its Australian Free-to-Air competitors. An estimated 7,558,000 Australians


How exposed is Melbourne to the next drought?

By Leith van Onselen A decade ago, Melbourne was gripped in drought. Water storages had fallen to below 30% and widespread water restrictions were in place across the city: Several years of strong rainfall followed and today Melbourne’s dam storages sit at a healthier 69%. However, today The ABC reports that Southern Australia is getting


Australia’s pokies addiction is doing us harm

By Leith van Onselen Back in February, The Economist released the below chart showing that Australia was leading the world in gambling losses, losing just under $US1,000 a year per resident adult, with nearly half of these losses coming from poker machines (see below graphic). According to The Economist: To the general public, Australia hardly


Links 8 September 2017

Global Macro / Markets / Investing: Automation will make countries with a youth bulge more volatile – Global Risk Insights Goldman’s Blankfein on Markets: ‘Things Have Been Going Up for Too Long’ – WSJ Ray Dalio: How to build a company where the best ideas win – TED Is Blockchain Ready for Fiat? Why Banks See Big Promise


Weekend Links, September 2-3, 2017

Spring Moon, John Aland, 1967, Art Gallery of NSW   China China sees new world order with oil benchmark backed by gold – Nikkei Asian Review ‘We must send our best to the front line’: Xi Jinping goes all out to rid China of poverty in three years – SCMP China bans new deposit certificates,


Farewell cricket

Via The Australian: Throughout their long and bitter pay dispute, Australia’s cricketers kept telling us it wasn’t about the money. It is just as well. If the past four days under a hot Dhaka sun have told us anything, it’s that money is a poor measure of a cricketer’s worth. The hapless 11 who yesterday


Macro Afternoon

by Chris Becker Easing tensions on the Korean peninsula have caused stock markets to rally and a retreat from key safe havens like Yen, which lifted Japanese stocks for the first time this week. Gold prices remain elevated while a small selloff in local bonds continues as iron ore prices also retreat. In mainland China


Victoria labeled “parasite state”

Via the Herald Sun: VICTORIA has been dubbed a “parasite” state for relying on the rest of Australia to fund its extravagant lifestyle. Last year, Victoria imported more than $50 billion of highly manufactured goods, including cars, TV sets and machinery, official trade figures show. But despite promises in the early 2000s of the state


Money Laundering for Dummies

The bit I don’t get with the whole CBA money laundering through ATMs is why? The fees are so small. If you are going to launder money you need to: (1) take a hefty fee (10-15% should be an absolute minimum); and (2) obtain leverage over the criminal for future use. Macrobusiness has numerous times


North Korea’s hollow threat

by Chris Becker Death. Destruction. Nuclear holocaust! These headlines sell papers and bait clicks. Add to the mix a man-child US president, plus any chance to talk up defence contracts and the military-media-industrial complex goes into a frenzy. Doom sells! Luckily, science comes to the rescue. Let’s dispel the “threat” from North Korea using some


Calls for health star rating system to focus on sugar

By Leith van Onselen Last month it was revealed that Australia’s farcical Health Star Rating system had been placed under review amid widespread concerns over its efficacy, which was beautifully encapsulated by Peter FitzSimons: Under the system, straight milk gets four stars, while Up & Go – with added, to use the specialised term –


Death to the Death Tax!

The front page of the Australian is highlighting that the Labor party is starting to make inequality an issue for the next election, and Leith ran a post yesterday about the Labor party and a possible inheritance tax for next year. I find the whole inheritance tax debate fascinating. In my experience Australian’s have 3


Why property is such a compelling investment in an SMSF

There is sometimes confusion about the returns available on property in a self-managed super fund (SMSF) – especially as the mathematics starts to get confusing with relative rates of return, real vs nominal and opportunity cost vs risk, before tax and after tax returns. But I have a much easier way to explain why it


Daily iron ore price update (flameout)

Iron ore charts for July 19, 2017: Tianjin benchmark rose $1.40 to $69.50. Paper flamed out overnight. CISA output for major mills fell 1% in the first fortnight of July. That is probably past the peak for the year but we shall we see. Steel prices are right at new price peaks. Thermal has caught


Book launches: Game of Mates

Dr Cameron Murray, author of the fantastic book Game of Mates: How Favours Bleed the Nation, will be presenting at various other book launches across Australia next, and MB readers are encouraged to attend. The upcoming dates are as follows (see links for further info): Monday 17th July – Economic Society Australia ACT is hosting


Weekend Links 8-9 July, 2017

‘Open Cut, Muswellbrook’ Weaver Hawkins, 1955 National Gallery of Victoria China Beijing seen lending Chinese yuan a huge helping hand – Nikkei Asian Review China widens investor access as bond trading link with Hong Kong launches – Guardian China is focusing on the wrong things to fix its economy, says economist – CNBC China’s cooling


CoreLogic leading mortgage index craters again

From CoreLogic: After it’s recent magical recovery to year on year highs, the index has again cratered again, this time to 2014 lows for the comparable period. Listings are a little better than last year. The index is volatile sometimes but does appear to be signaling mid-year weakness in mortgage issuance. Full report.


Greens’ urban infill utopia will make our cities hotter

By Leith van Onselen Bloomberg has published an interesting article about how cities are facing swelter temperatures as climate change combines with the loss of green space to create a ‘heat-island’ effect: It’s so hot in Phoenix that American Airlines Group Inc has had to cancel scores of flights… The sweltering conditions, which have engulfed much of


Book launches: Game of Mates

Dr Cameron Murray, author of the great book Game of Mates: How Favours Bleed the Nation, will be presenting at various book launches across Australia over coming weeks, and MB readers are encouraged to attend (note: I’ll be at the Melbourne launch below). The upcoming dates are as follows (see links for further info): Thursday


HIA hypocritically opposes NSW FHB bribe

By Leith van Onselen The Housing Industry Association (HIA) has attacked the NSW Budget’s first home buyer (FHB) bribe for failing to do enough to stimulate new home construction. From The AFR: Shane Garrett, senior economist for the Housing Industry Association, said the NSW budget to be handed down on Tuesday will cut a $5000


The rise and rise of Netflix

By Leith van Onselen Late last year, Foxtel announced that it would offer no contracts and equipment-free packages in a bid to attract price-sensitive customers and hold onto market share in the face of stiff competition from on-demand streaming services like Netflix and Stan. This followed Foxtel already halving the cost of its basic package,


And now for some ASX propaganda

Via Domainfax: “In contrast to the RBA’s recent upgrade to growth forecasts and the federal budget’s seemingly optimistic growth assumptions, we sense investor concern around the economy has risen in May,” UBS equity strategist David Cassidy said. Falling dwelling investment, some of it due to bad weather, and a drop in net exports, in turn