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What does Obama’s plan achieve?

Courtesy of Zero Hedge comes this take on the impact of the Obama jobs plan, the operative words being “how congressional Republicans will respond to the proposal”: BOTTOM LINE: The President’s proposal is larger than expected, with spending proposals and tax cuts both somewhat greater than expected. This proposal does not imply a significant shift

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Obama’s 11th Hour

Find below the full text of US President Barack Obama’s speech: Mr. Speaker, Mr. Vice President, Members of Congress, and fellow Americans: Tonight we meet at an urgent time for our country. We continue to face an economic crisis that has left millions of our neighbors jobless, and a political crisis that has made things

5

Chart of the Day: Euro/USD breakdown

Avid Chartist, a fellow trader and follower of the markets posted an interesting set of charts yesterday. Most intriguing is a trading setup that has macroeconomic repurcussions, the breakdown of the Euro/USD and one that we’ve been following closely at MacroBusiness. Here is the short term chart of the Euro, note the descending triangle, a

49

Greece is gone

According to the markets Greece is gone: Credit-default swaps on Greek government debt surged to a record, signaling a 91 percent chance the nation will fail to meet debt commitments, after its economy shrank more than previously reported. Five-year contracts on the country’s sovereign bonds jumped 196 basis points to 3,001 basis points, at 3:45

16

The powerless Fed

Markets sold off last night on the concern that Fed is not going to man the big QE3 pump. With good reason it seems, though there is still hope. We know that the dominant clique at the FOMC is concerned about inflation. However, in his speech overnight, Ben Bernanke made it clear, rightly, that the

1

The Chairman’s speech

Find below the full text of Chairman Bernanke’s overnight speech: Chairman Ben S. Bernanke At the Economic Club of Minnesota Luncheon, Minneapolis, Minnesota September 8, 2011 The U.S. Economic Outlook Good afternoon. I am delighted to be in the Twin Cities and would like to thank the Economic Club of Minnesota for inviting me to

17

Demography is destiny

Late last week, the World Economic Forum (WEF) published a fascinating article on the UN Population Division’s latest projections for global population growth (h/t Bernard Hickey). Below are some extracts from WEF’s article: “Demography is destiny” is an old phrase and may seem an exaggeration. However, there is no doubt that two major demographic trends–an

24

The imminent yuan float meme

The kind of attention the Chinese yuan gets is fascinating.  At the height of the debt ceiling nonsense and the subsequent days, the yuan surged to a record high against the $US, and made some of the largest moves on record.  Countless reports told stories that it signaled Beijing’s ambitions for internationalisation, or the use

14

Insolvencies rise, Gerry heads west

The dark clouds are reappearing particularly fast over Australia’s private sector after the little rays of sunshine on Tuesday. MacroBusiness readers would be well aware that households are under pressure from high levels of indebtedness and most recently we have seen the rate of arrears climbing sharply in some areas of the country. The other

19

Bear porn

My readers will know that I am bearish on housing and have been for over a year. In June 2010 while I was predicting the coming house price falls the media was busy providing real estate industry propaganda to the contrary. Now that there has been an obvious change in both sentiment and the market,

9

Cash rate – too low for too long?

The RBA publishes the below graph its Chart Pack series and it is widely referenced in economic discussions about asset prices and credit.  The low real cash seen during 2001 and 2002 is often assigned part of the blame for the exorbitant debt binge and house price growth around that time.  It was, however, not a uniquely

37

The “superb Macrobusiness”

I don’t want to waste your time with too much trumpet blowing but it’s not often you get a plug as spectacular as that received overnight at the Financial Times, the world’s most respected business newspaper. In a story about Australian banks, the FT’s Alphaville blog quoted extensively from Deep T.s excellent analysis of the

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September 9 links: Bernanke gloom

Rockets: $US, Treasuries, gold Flat: CCI, metals Down:  energy, grains, Euro, Aussie Creeping 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

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Trading Day

The S&P/ASX 200 finished flat today, up 4 points or 0.1% to 4188 points after a volatile session where it breached 4200 points before a disappointing jobs data release. In after hours trading, the market is just holding on to these gains awaiting the Euro and US sessions, which will likely react to both Ben

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Flipping the bird at NSW ‘austerity’

From the SMH today comes this story of union action against the O’Farrell government’s plans to limit pay rises: Unions are claiming victory in their campaign against the state government after an angry crowd of about 30,000 marched on State Parliament today. …The crowd of public sector workers, made up mostly of teachers, public servants,

23

More on labour hoarding

Find below HSBC’s and NAB’s take on today’s jump in unemployment. Both are even handed assessments on the unwinding of labour hoarding but also more sanguine than I am about the immediate trajectory for the jobless rate. Two reasons I can think of for the weakness concentrated in both WA and QLD. First, that’s where

20

The banks are cheap (and?)

Morningstar has come out with a report that argues the market has got Australian banks wrong. Provided Australian house prices hold up — a very big assumption — they may well be right, although whether that is a reason to rush out and buy banks is an arguable point. Their franked dividends are an obvious plus,

25

More on unemployment

So, NSW lost 12,000 full time jobs, VIC added 17,000 but that was a give back for last month’s drop of 29,000 so over two months is down 12,000, Qld and SA dropped 2,000 and WA lost 5,000. Here’s a chart of the states unemployment rates: And here is what is about to become a

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Unemployment jumps

The ABS August Labour Force report is out and the slide is on, with unemployment jumping in the month to 5.3%. The ABS details are below. More analysis to come… AUGUST KEY POINTS TREND ESTIMATES (MONTHLY CHANGE) Employment increased to 11,439,900. Unemployment increased to 620,300. Unemployment rate steady at 5.1% from a revised July 2011

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Extinction is a crisis

Yesterday Deutsche Bank released a new report into Dutch disease and it makes fascinating reading. The report more or less follows the line put forth by the Canberra boffins, that manufacturing has been in long term decline and offers some quite useful charts. The report concludes the following (with comments): Manufacturing is in long-term decline,

6

Europe leaps a puddle

Quite a lot of action in Euroland last night. Firstly the big news, although completely expected, was that the Constitutional Court rejected a series of lawsuits aimed at blocking Germany’s participation in the Euro bailouts but handed more power to the German parliament around the decision making process: Germany’s top court handed its country’s parliament

61

Gooooooo GOP!

I would like to able to report this morning that US economic leadership has reached a rapprochement. That both Treasury and the Federal Reserve have agreed a new round of stimulus measures that aim specifically to create US jobs and reverse the decline of its middle class through a sensible balance of medium term spending,

9

APRA continues Invisopower!

APRA’s Discussion Paper on Implementing Basel III Capital Reforms makes for interesting reading mostly for what it does not address rather than the few important reforms that it does. APRA has certainly made an attempt to put enough strength into our banking system to withstand the inevitable crisis to come, but whilst tougher capital requirements will have

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Do variable mortgages prevent crashes?

Last month, the Federal Reserve Bank of Richmond published a report, Foreign Housing Finance, which highlights a number of problems with the US mortgage financing system and proposes a number of reforms based largely on the financing systems employed in other developed nations. While the entire report is interesting, the below chart, in particular, grabbed my