Gittins!, Pascoe dance on manufacturing’s grave

Nobody enrages me like Gittins! Not even Pascoe. Sadly for me, the two Fairfax commentators today engage in an awful double-act of cavorting on manufacturing’s grave. Let’s begin with Gittins!: And the fact is that, throughout most of the 20th century, we diverted a fair bit of our income from agriculture and mining to subsidising our

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RPData August analysis

As noted earlier by Data Sword, the latest RPData index was out today and as usual he has done an excellent job in the analysis. The press release is also out (available below) and as usual I like to provide a bit of analysis outside the data. The results certainly shouldn’t come as a surprise


Mining is making us lazy

Well…forgive the headline. Mining making us less “productive” would be more accurate. I’ve certainly been less than nimble in bringing to your attention a new study by the Australia Institute into Australian productivity. It was released six days ago but better late than never. And what a fascinating study it is. Explosive even: The recent debate


Chinese bank arrears rise

Caixin has a good summary for 14 of the Chinese banks which have recently reported their first half results. According to the report, overdue loans have increased 6.35% at the end of the first half compared with the end of last year.  Out of 14 banks, only 3 banks did not report rising overdue loans, and


Disleveraging continues

The RBA credit aggregates for July are out this morning and it’s a mixed picture with a small uptick in business lending, falling growth in mortgage credit and outright falls in personal credit: Total credit growth is completely stalled: And credit for housing has hit a new Y/Y growth low: Both investors and owner-occupiers are


Housing falls accelerate

It will come as no surprise to regular MB readers that Australian house prices continued to slide in July, according to the latest RP Data-Rismark house price index. On a seasonally adjusted basis prices fell 0.6% in July while the 0.2% June decline was revised lower to show a fall of 0.4%: The raw figures


Chart of the Day: Taxes are all wrong

There is nothing more certain in life than death and taxes: today’s chart will focus on the latter. I consider taxation reform as the “only hope” for future productivity/microeconomic enhancements (as we’ve botched the macro as highlighted by House and Holes (and others here) regarding the MRRT and SWF), and these two charts, taken from


The Fed is boxed in

So, yesterday’s and today’s US data has come in mixed. So far, markets have twisted the results to the upside. On Monday, Personal Income and Outlays for July came in above expectations at 0.8 in July, and real PCE increased 0.5% as the price index 0.4 percent. Pending Home Sales Index came in below expectations with a 1.3


How the RBA undervalued housing

Remember this chart? It is taken from page 15 of the RBA Research Discussion Paper: Asset Prices, Credit Growth, Monetary and Other Policies: An Australian Case Study, released in September 2010. As you can see, the RBA chart shows a nationwide dwelling price-to-income ratio of around 4.5. Senior RBA officials have quoted this ratio in


August 31 links: QE3 cometh, apparently

Up: energy, grains, metals, CCI, $US, Treasuries, gold Flat: , Euro, Aussie 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 Year


Trading Day

The S&P/ASX 200 closed steady today, up only 6 points or 0.1% to 4269 after rallying in the morning to over 4300 points. Asian markets experienced more positive gains, with the Nikkei 225 closing 1.1% higher at 8953 points on the back of bad employment and retail sales numbers whilst the Hang Seng closed up


More on getting poorer

Above is a time series chart from today’s ABS Household Income, Income Distribution release. The blue line is gross average household income. The red line is eqivalised disposable  income, which the ABS describes as: Disposable household income adjusted using an equivalence scale. For a lone person household it is equal to disposable household income. For a


European schisms

As I noted recently the new IMF chief is having a bit of trouble communicating exactly what her strategy is for Europe. Last night we saw her struggling again: A fresh round of capitalisation for European banks was firmly ruled out by EU officials and bankers when they appeared before an emergency meeting of the


The average household is getting poorer

Those who support Australia’s exorbitant house prices and new economic model of Quarry Australia usually rationalise that support with figures showing that household income growth is strong and widespread. Well, no longer. The ABS has just released its biannual Household Income and Income Distribution report and the results are a shock. From the report, the 2007/08


Marginal rubbish

  Reporting season has come in at around expectations, which, it might be added, were not terribly high (outside resources). The question of course is what comes next, and that will heavily depend on what happens in developed economies and China. Deutsche Bank is casting doubt on the expectations of margin growth, which is going in


Building approvals still weak

ABS Building Approvals managed a small gain of 1% In July, short of the 2% rise that the market was expecting however approvals remain 15% below the same time last year: The marginal increase actually masked the underlying weakness in the series as the gains were entirely driven by a 77% increase in public sector


US GDP signalling big job losses

Last night,  Zero Hedge ran an interesting post looking at the long term relationship between US GDP and employment growth. I have reproduced one chart and added a few of my own. The results are sobering. First, the history of US GDP: That gives some idea of just how sub-par this US recovery has been in


Chart of the Day

Today’s chart comes from SocGen via ZeroHedge, and is an analog comparison of Japanese, US and German 10 year bond yields: Remember, Japan has a debt to GDP ratio of over 200%, the Japanese Central Bank printing machine makes The Bernank look like a gold bug, yet bond yields are just above 1% and inflation


How an SWF works

Several commenters have asked me to explain how I see an Australian sovereign wealth fund and resource rent tax actually working. Several others have questioned the wisdom of an SWF held offshore when Australia runs a current account deficit (CAD). That is, so long as we invest more than we save, we don’t have any money


Pettis: 3% growth coming soon to China

From Michael Pettis comes this sobering series of forecasts for Chinese growth. Wake up, Canberra. My basic sense is that we are at the end of one of the six or so major globalization cycles that have occurred in the past two centuries. If I am right, this means that there still is a pretty


Woolies versus Coles

Woolworths released their FY11 results last Thursday.  The analysts presentation headlined with a 5.1% NPAT increase, which was at the lower end of the 5-8% range given in the last earnings guidance, which was in turn below the 8-10% growth forecast at the start of the year.  As such, the share market reaction was harsh


RBNZ gets housing policy right

The Reserve Bank of New Zealand (RBNZ) last week lodged a fascinating submission with the New Zealand Productivity Commission’s Housing Affordability Inquiry which, given the strong similarities between the Australian and New Zealand housing markets (explained in these earlier articles), is highly relevant to Australia. The RBNZ submission is provided below. At only 10 pages


NSW’s revenue hurdles

Back in April I questioned whether Queensland was heading for recession on the back of stalling credit issuance and a falling housing market. Later in that month I noted that the Victorian government was also showing similar signs of weakness. To complete the trifecta I note today (h/t Lorax) that New South Wales has also caught the same


August 30 links: Hope springs eternal

Up: energy, grains Flat: metals, Euro, Aussie Down:  CCI, $US, Treasuries, gold Greece, Portugal burn: 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