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World Bank endorses MB

Many readers have noted the largish impact that MB has had on the reporting of the national media on certain topics. Indeed, one reader coined the term “”Macrobation” to describe the phenomenon. Now the World Bank is out with fascinating new research into the effect economics blogs (h/t Adrian). And it’s a ringing endorsement: Economic

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7

Europe’s crunch month

I looks to me that September is going to be “crunch month” for Europe, obviously I could be wrong and this show could go on for another year, but recent events seem to suggest that we are approaching some sort of “do or die” moment. Over the weekend the Greek Finance minister was fire-fighting rumours

18

Return of the Jedi

So, that was the US week that was. The August data flow was probably a little better than I reckoned on but was certainly bad (I tend to move more quickly than an economy does). Indeed, data was bad enough, especially Friday’s employment report, that the tenure of US debate has clearly shifted from worry

22

Australia’s MIA politicians

Don Brash, leader of the New Zealand ACT Party and former governor of the Reserve Bank of New Zealand (1988 to 2002), has delivered some stirring speeches recently lamenting the declining level of housing affordability in New Zealand.  On 25 August, Dr Brash gave a speech in which he noted the role played by regulatory

27

Safety in numbers

The MB nemesis, Gittins!, offered a piece over the weekend in which he gave the economics fraternity a caning for failing to foresee the current global slowdown. Using the now famous Carmen Reinhart and Kenneth Rogoff text, This time it’s different, Gittins! concludes: In their landmark study of hundreds of financial crises in 66 countries

5

September 5 links: Productivity palaver

ABN Amro CEO: bank funding harder. Bloomberg European deposits fleeing to American banks. The Street Light US participation rate also falling. Calculated Risk Week ahead for the Dow. Calculated Risk China’s gold reserves. Wikileaks via Zero Hedge Yield curve can’t invert. Aleph blog Slow but not yet recession. James Hamilton That’s not Santa it’s some fat guy

35

Signaling takeoff

How could I resist responding to Stroppy the Wonder Dog? In my post last week on time is money, and how that temporality is becoming a bizarre circus in the capital markets, Stroppy, or Strop to his mates, said this: Should the Fed just start raising rates? Would that be a positive signal to the economy,

12

Data vault

Australian Data The domestic data calendar was dominated by deteriorating data from the non-mining sector with new home sales and house prices falling along with private sector building approvals and weak credit figures while an increase in retail sales wasn’t enough to stop the annual trend rate dropping to the lowest on record. Private capex

17

RPData on income

Ever since Corelogic took over RPData in January I have noticed that the company’s outlook for property has slowly become more subdued and, in my opinion, more realistic. I am a unsure whether this is the influence of the new US owners, who would be well aware of the risks associated with overexuberance in both the

28

Weekend Links: No more jobs

Rocket: gold Up: $US, CCI, metals ,grains Down: Euro,  Aussie, Treasuries,energy, “Old school” 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

2

Trading Day

The S&P/ASX 200 closed sharply down today, after yesterday’s poor performance and reaction to overnight markets. The index is down 65 points or 1.5% to 4242 points. In after hours trading, the market is at 4230 points as we wait for US employment figures early Saturday morning (AEST). Asian markets experienced similar losses, with the

4

Terms of trade stall

Missed this yesterday. From the RBA: Australia’s recent spectacular run of terms of trade rises finally stalled in August. Preliminary estimates for August indicate that the index rose by 0.4 per cent (on a monthly average basis) in SDR terms, after rising by 1.8 per cent in July (revised). The largest contributor to the rise in August

6

Gerry’s black Christmas

It’s a dour line-up today and I was going to give you all a break from the steady drumbeat of recession talk but, sadly, I’ve just received more of same from the excellent folks at Forecast. In addition, I notice  that the usual suspects are engaging in spruikalicious drivel on the back of Gerry Harvey’s

1

European M1 signalling recession

As my readers would be well aware I have been watching Europe for well over a year and providing near-daily commentary on the economic events that are occurring across the continent. One of the things I have been watching over the last few months is the monetary aggregates. I noticed that the ECB had provided

48

Disleveraging and retail II

  Thanks to Cameron Murray for producing the following scatterplot chart revisiting the question of the relationship between the growth of mortgage credit and retail spending growth. As you can see, my earlier chart was misleading. When scatterplotted, any direct correlation is quite low. I’m pleased to advise that Cameron will be joining MB next week.

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

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

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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