4

Mixed news for tourism

ABS short term arrivals and departures for July are out and its up for former and down for the latter. There is a hint of a trend change for visitors so a glint of hope for tourist operators. Hard to believe it’ll be sustained with the dollar where it is but you never know. Less

Latest posts

31

A glance behind the curtain of Invispower!

Regular readers will recall that a part of the MB lexicon is the term Invisopower!. The word describes the fog deployed by regulators to conceal the past (and ongoing) reliance of Australia’s large banks upon public support. From the SMH via Wikileaks today we can peer through a small opening in that fog and discover

34

Disleveraging and retail

Over the past couple of days, I noticed a correlation in the trends between housing credit growth and retail sales growth that is worth a mention. Of course, at MB, we’ve long established the link between house prices and retail sales, but here is a pretty clear illustration of the link between mortgage creation and

6

Chart of the Day

Today’s chart is the TED spread, mentioned in today’s links by House and Holes here. And no its not the TED forum of talks, presentation and ideas (a favourite), but the difference between the 3 month interest of US Treasury bills (T-Bills) and the 3 month London Interbank Offered Rate (LIBOR). The LIBOR is the

8

Global manufacturing at the brink

It may come as some carrion comfort to Australian manufacturers to learn that the majority if their global brethren are also now in recession. Yesterday and last we night we learned from PMI releases that the manufacturing sectors of Taiwan, South Korea, UK and Europe all contracted in August. China managed an insipid rise as

56

How Las Vegas gambled and lost

In yesterday’s article on the release of the latest US house price indices by Case-Shiller and the FHFA, one market stood out more than any other for the dramatic way in which home prices have collapsed: Las Vegas, Nevada. According to the Case-Shiller index, house prices in ‘Sin City’ have fallen by a whopping 59%

20

The noose tightens around Portugal

After recent cuts in GDP growth from Europe due in part to austerity, or at least the threat of it, in many of the 17 nations it wasn’t really a surprise when it was reported last night that the PMI has fallen into contraction: Europe’s manufacturing industry contracted more than initially estimated in August, adding to

5

Much bark, little bite

With somewhat slower economic growth and an increasingly clouded outlook in the global economy, I have been wondering what Chinese policy makers would really like to do amid stubbornly high inflation.  Yesterday, we had Brazil cutting rates, which baffled some analysts, but tells you that some emerging economies are worried about growth. If anyone has been hoping

23

August 2 links: ISM worst case – growth

Up: $US, Treasuries Flat: energy,  CCI, gold,  Aussie, Down: Euro , metals, grains Creeping core contagion: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year 10 Year

11

Trading Day

The S&P/ASX 200 just closed in positive territory today, after a strong morning session. The index is up 11 points or 0.3% to 4307 points. In after hours trading, the market is slightly below 4300 points. Asian markets experienced stronger gains, following EU/US risk markets, with the Nikkei 225 closing up 1.1% at 9060 points

4

Chinese manufacturing takes a hit from abroad

The just released official manufacturing purchasing mangers index (PMI) for China shows a small rebound in August.  The headline PMI rose from 50.7 in July to 50.9 in August, just slightly below market expectation of 51.1. The new orders index was flat at 51.1, and output rose from 52.1 to 52.3.  Raw materials inventory rose from

117

Will rates work again?

  I note today that Australia’s favourite bullhawk, Chris Joye, has claimed that if: …the RBA starts cutting rates, I would be bullish on housing. Unlike almost any other housing market in the world, Australia is unique insofar around 90% of all mortgage debt is purely adjustable-rate and priced off the RBA’s target cash rate

1

European soap

Overnight we saw more politico-speak over the the ongoing Greek collateral squabbling. We now seem to be in a new phase where all those involved claim that there will be a resolution even though their very obviously isn’t one yet: Euro zone countries are discussing ways to charge fees on any collateral Greece would use to back

13

Capex boom broadens (a bit)

There’t no doubt that Australian capital investment intentions are booming. The good news is that in the latest round it was the broader economic sectors, including manufacturing that drove all of the jump  in intentions. Here is the total chart: You’re looking at the farthest bar on the right. That’s now the full year capex

7

Manufacturing recession deepens

The PMI is out today and confirms that the manufacturing recession that has been running for a year is deepening. The Australian Industry Group (AIG) describes conditions thus: Conditions in the manufacturing sector deteriorated further in August with the seasonally adjusted Australian Industry Group-PwC Australian PMI® down a slight 0.1 points to 43.3. It remains

11

Retail hangs in

Retail sales for July are out and beat estimates, rising 0.5% in July against expectations of a 0.3% rise: Sales Ex-Food was only up 0.3%, as food rose 0.8%, and is now actually down 0.5% over the past 12 months: Of the other components, Household goods were flat, Department stores were up 1.2%, Cafés and

3

Churning and burning Europe

It is interesting to compare brokers’ assessments of the European stalemate with the posts and comments on MB. After all, it is the markets that decide whether Europe is salvageable; if they deem that it is, it is. If they deem it is not, then it will probably not be. In that sense we are

18

Chart of the Day: A history of tax

After yesterday’s interesting discussion, I thought I’d bring up another taxing (sic) chart today: The first chart shows the composition of state and Federal government tax of GDP. Startingly, at Federation, tax was only 5% of total GDP (in unrelated historical fact updates, at that time, Australia was also the wealthiest nation on the planet,

10

Pulling a rabbit out of a hat

Last night several more Fed boffins were on the hustings giving dovish speeches. The first is Dennis Lockhart. Here is the executive summary: While acknowledging that downside risks to the recovery have increased, Lockhart expects a modest cyclical recovery to proceed. In his view, a number of necessary structural adjustments are holding back economic growth in

98

Our economy is fundamentally broken

Everyday at MacroBusiness we endeavor to cover a wide range of topics about the Australian economy that are either unreported or misrepresented by the mainstream media. One of the major themes since we began, just 7.5 months ago (I know, it does seem longer), has been the changing face of the Australian economy as private sector credit

5

Hong Kong money supply

The Hong Kong Monetary Authority published its monetary statistics for July yesterday. Hong Kong dollar M1 money supply increased by 3.6% in July on a non-seasonally adjusted basis compared to June after a 3.7% drop in June.  On a seasonally adjusted basis, Hong Kong dollar M1 money supply rose by 4.2% in July.  Hong Kong dollar M2 money

11

Preventing housing bubbles

Over the past week, the two main US house price data providers – Case-Shiller and the FHFA – released their second quarter indices. And once again, they provide a sobering insight into the carnage caused when housing bubbles burst violently. The national series are shown below, both in nominal and real terms. According to the

3

September 1 links: Good news is bad news

Up: $US, metals Flat: energy, grains,  CCI, gold Down: Euro, Aussie, Treasuries Contagion: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year 10 Year Germany 2

3

Trading Day

The S&P/ASX 200 closed in positive territory today, with strong bids before the close after a mixed session in the morning. The index is up 27 points or 0.6% to 4296 points. In after hours trading, the market is slightly above 4300 points. Asian markets experienced similar gains, with the Nikkei 225 closing steady at

6

EU marks to fantasy

Well I guess I shouldn’t be too surprised by this news given that it has been quite obvious for many months that the European banking system is in a far worse state than anyone has been saying. But the following is a bit embarrassing for Mr Trichet who only yesterday stated that “There is no