27

Is China’s productivity miracle over?

By Leith van Onselen Below is a facinating presentation by UBS’ George Magnus, which examines whether the Asian Miracle is coming to an end. Magnus’ sections on China are particularly pertinent for Australia. First, Magnus discusses China’s falling rates of productivity: In China, the higher contribution of TFP to economic growth in the 2000s shows

Latest posts

9

QLD mortgage lodgements surged in July

By Leith van Onselen Late last week, the Queensland Department of Environment and Resource Management (DERM) released data on housing transfers and mortgage lodgements for the months of July and August. According to DERM, the number of mortgage transfers and mortgage lodgements surged by 32% and 35% respectively in July, before retracing -21% and -25%

33

Ray Dalio on credit and gold

By Chris Becker Apart from the battalions of rent-seekers and copycats within the managed fund and hedge fund industry, there are a few “heroes” we follow closely here at MacroBusiness. Hugh Hendry, just for his acerbic wit alone is one, but unfortunately he is on a self-imposed media blackout (but check out his “greatest hits” here).

3

Macro Morning

The German constitutional court ratified the ESM rescue mechanism over night pushing one more obstacle out of the way to the continued renaissance of European action to deal with its crisis. The court did limit the amount that Germany can provide without a further vote in the Bundestag (€190 bln) but  this was of little

10

Europe inches forward

Well that was a big night for Europe. Lots to cover, so apologies for the long post. Firstly to the German constitutional court and its decision on the legality of the ESM in terms of German constitutional law. The German Federal Constitutional Court Decision So basically the German constitutional court, via president Voßkuhle, has stated

1

Iron ore price weakness set to resume

Yesterday ANZ had an interesting conference call about iron ore, China and Australia. The economic legs were all a bit sunny and happy but the iron ore dimension was very good: 2. MARK PERVAN, HEAD OF COMMODITY RESEARCH Thoughts from China General mood very cautious, key export province Guangdong seeing activity down as much as

0

S&P adds to Fortescue doubts

Late yesterday. S&P put FMG on downgrad watch: Fortescue Metals Group Ltd. ‘BB-‘ Ratings Placed On CreditWatch Negative On Steep Decline In Iron Ore Prices MELBOURNE (Standard & Poor’s) Sept. 12, 2012–Standard & Poor’s Ratings Services said today that it had placed its ‘BB-‘ corporate credit and issue ratings on Australia-based mining company Fortescue Metals

0

Can Chinese stimulus projects find the money?

Courtesy of Also Sprach Analyst. By now, it should be widely known that the talk of stimulus in China is so far just that.  Governments, both central and local, do not have the money to fulfil all of the funding requirements without raising new funds from borrowing, and so far there are very few signs

8

Links for 13 September

Global Macro: S&P500 Total Return vs Bonds (1800-2012) – The Big Picture Demography and the Secular Bull Market in Our Future – The Reformed Broker The long-term impact of low rates – Financial Times North America: Shiller on House Prices – Calculated Risk Income, Poverty and Health Insurance Coverage in the United States: 2011 –

0

ASX Shares Daily – 12th September

  By Chris Becker A green green day across Asian bourses today, albeit at low volume as everyone awaits the outcome of the German court decision tonight on the rescue fund ruling – which has just come in – allowing the ESM ratification, with conditions. The ASX200 had a solid day and was up almost 1% or 36

16

Moody’s endorses Australia’s AAA rating

From the SMH comes the following from Moody’s: “We are very comfortable with Australia’s triple-A ratings because of the government’s very low debt levels compared with other sovereigns in the triple A category,” Steven Hess, a senior vice-president at Moody’s in New York, said. …Mr Hess said risks stemming from a slowdown in China, falling commodity

9

NSW drives dwelling construction bounce

By Leith van Onselen The ABS has just released dwelling commencement data for the June quarter, which registered a 4.6% (1,497) increase in the number of dwellings that commenced construction over the quarter. Below is a time series chart showing the split at the national level: The construction of units & apartments drove the lift,

0

China links

Courtesy of Sinocism. Chinese anger over the nationalization of the Diaoyu Islands continues to grow, stoked in part by a media and meteorological onslaught. China has sent ships to the disputed islands, newspaper front pages show China’s fury over the Diaoyu purchase, the PLA says it ”reserves the right” to take action, four of China’s military regions have launched large-scale exercises (四大军区密集大规模军演 专家称系警告日本, Shanghai has decided to rebrand

7

Consumers go nuts for savings

Find below the the new Consumer Confidence release. It’s a dead bore but contains this paragraph on savings behaviour in September: This survey also provides a quarterly update on respondents’ savings preferences. There was a sharp increase in the proportion of those respondents who assess bank deposits to be the wisest place for savings, with

84

Time to face the economic pain

By Michael Feller “Peace in our time” is one of history’s most chilling phrases. Uttered by Neville Chamberlain upon signing the 1938 Munich Agreement with Adolf Hitler, Britain’s prime minister had seemingly avoided war Germany by sacrificing the Sudetenland. Although a highly popular move at the time (unless you were Czech), the pact lasted less

26

Cut the mining BS

I had both the privelege and misfortune of being a commentator at Business Spectator (BS) during the last period when an Australian government raised taxes on the coal industry. It was during the Resource Super Profits Tax (RSPT) debacle when BS exploded in indignant anger. BS openly dedicated itself to the destruction of the tax

35

Vested interests squeal at FHOG changes

By Leith van Onselen As expected, vested interests have slammed the sensible changes to Queensland’s First Home Owners’ Grant (FHOG), in which the $7,000 grant on all dwellings will be replaced by a $15,000 grant on the purchase of new dwellings only. The REIQ strongly opposes the changes, arguing that first home buyers prefer established homes,

12

The poster child of austerity is lost

While we wait for tonight’s announcement from the German constitutional court, there are some interesting developments in the Troika’s latest review of Portugal: The program remains broadly on track. In 2012, despite headwinds from abroad, real GDP growth remains in line with projections, exports are performing better than expected, and the fast reduction in the external

2

Macro Morning: Risk roars

The Dow Jones Industrial Average finished at its highest level in around 5 years overnight as hopes that the Fed will deliver QE3 outweighed the threat by Moody’s to take away the US’s AAA rating. Europe had a better day in the lead up to the US market open as hopes rose again about the

1

Iron ore price cracks the ton

And there you have it! Iron ore raises its bat to the crowd and the dressing room, cracking the ton! And the charts: And Chinese steel following through: Adding to the joy, China’s steel output fell materially in August, down 4.9% to 1.89 millions tonnes per day in August from 1.99 million tones per day

22

Macro Investor: Will an iron fist hit Perth housing?

Owing to Western Australia’s distinctive commodity exposure, the Perth property market is subject to a different cycle to the reast of the nation. Unlike the major east coast capitals, where all four house price series have tracked each other closely over time, there are significant divergences in Perth, with the ABS providing the most positive results

20

Squabbling over the carcass

There’s a tremendous MSM brouhaha today over mining taxes, the cost of doing business for mining, commodity competitors, the failure of Labor to manage the boom, so on and so forth. Some of it is pretty good too. My personal favourite is Paul Kelly’s take on Labor getting caught flat-footed on the politics of the

4

Chovanec on China’s mounting bad debts

By Leith van Onselen Above is a must watch video interview on CNN with Patrick Chovanec, an associate professor at Tsinghua University in Beijing, talking about the mounting bad debt problems in China, and the likelihood of the Chinese economy experiencing a debt crisis, similar to that transpiring in Europe, or a replay of Japan’s

0

China’s August lending mixed

The People’s Bank of China yeste rday published the latest monetary statistics for August 2012 after publishing the aggregate financing numbers earlier. M2 money supply increased by 13.5% compared with a year ago, down from 13.9% yoy in July, and worse than expected growth of 14%.  M1 money supply increased by 4.5%, less than 4.7%

5

Links September 12

Global Macro: How central banks stuffed it. VOX Copper madness. Zero Hedge United States: Is there any value at Citigroup? Chris Whalen Drop QE3 to stimulate. FT QE timeline. Calculated Risk US trade deficit. Calculated Risk QE prices. Zero Hedge, II Moody’s threatens downgrade on Congress gridlock. Moody’s Germany bashes US debt. Reuters Europe: Carthaginian

1

ASX Shares Daily – 11th September

By Chris Becker A quiet, low volume day on the Aussie bourse, with the ASX200 slipping almost 8 points again – taking back yesterday’s gains and at 4333 points – I’ll take a closer look at the bottom of the post including technical analysis of the bourse. The rest of Asia fared worse on what is probably just

14

HSBC: Australian dollar to tumble

From The Australian: THE soaring Australian dollar is poised to tumble as lower interest rates, an escalating US fiscal crisis, and more Federal Reserve asset purchases conspire to push the high-yielding currency significantly below parity against the greenback. That’s according to strategists at investment bank HSBC, who say the so-called Aussie may sink to as

54

Queensland’s budget challenge

It’s budget day for Queensland and the much anticipated speech from the state Treasurer has just been delivered. In the lead up to the budget there has been avid speculation from the Queensland media that this would be a ‘hack and slash’ event: The Queensland treasurer says his first budget will outline reform and growth