Argus warns on Australia’s private debt load

By Leith van Onselen Finally, we have a high profile Australian – former BHP Billiton chairman and NAB chief executive, Don Argus – talking sense on Australia’s high private debt and how it is a millstone on Australia’s future productivity. From the Australian: Australia was set to inherit the same challenges confronting stricken economies elsewhere

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Mining canaries dropping like flies

By Leith van Onselen Earlier this month, I noted how falling mining equipment sales could be a harbinger of a sharper than expected reduction in mining capex. Then earlier this week, mining services contractors, Coffey and UGL, cut their earnings guidance for 2013 and announced plans to cut jobs amid a raft of project delays


Think tanks and ageing agendas

Propaganda from the loon bin seems to fill ever more pages of the mainstream media. Take this recent example from the UK Higher state pension ages are not only possible (given longer life expectancy) and desirable (given the fiscal costs of state pensions) but later retirement should, in fact, lead to better average health in


Gerard Minack’s parting warning

By Leith van Onselen Please find above an interesting video on ABC’s The Business with Gerard Minack, the soon to be ex-Chief Global Equity Strategist with Morgan Stanley. In this interview, which is Minack’s last before leaving Morgan Stanley, he provides his outlook for the global economy. Minack warns that low interest rates are creating


Weekly RP Data house price update

By Leith van Onselen In the week ended 16 May 2013, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, recorded a -0.45% decline, which followed last week’s 0.38% rise. It was the biggest weekly decline in more than year (see next chart). All capital cities recorded falls


S&P downgrades NZ banks

By Leith van Onselen Back in March, Standard and Poors (S&P) released a report warning about the increasing risk of a New Zealand property crash and noting that Australia’s Big Four banks, which own New Zealand’s Big Four, would be on the hook in the event that they needed to be bailed-out (my emphasis): In


RBNZ readies macroprudential arsenal

From Banking Day: The Reserve Bank of New Zealand has agreed a memorandum of understanding with Finance Minister Bill English that will give the bank the power to limit low equity mortgages as soon as July. …”These new tools…can promote financial stability by helping to build capital buffers and reduce incentives for speculative behaviour, which can contribute


There ain’t no mining cliff: Wood Mackenzie

By Leith van Onselen Yesterday afternoon, consultant Wood Mackenzie poured cold water over the view that Australia is on the verge of a mining investment cliff, whereby mining-related capital expenditures (capex) fall sharply from their current lofty level of nearly 7% of GDP (see next chart). From the Wall Street Journal: SYDNEY—Investment in Australia’s resources


Daily iron ore price update

Find below the iron ore price table for May 17, 2013: At $15, the 12 month swap to spot spread has returned to historically consistent dimensions for this price range. The spread to rebar remains very wide. So, either both iron ore prices keep falling or rebar keeps rising if the reversion to mean is


Links 17 May 2013

Global Macro/Markets: Soros Leads Gold-Stake Cuts Before Bear Market Drop – Bloomberg Gold bar premiums hit record in Asia on supply constraints – Reuters Gold Prices Falling – Business Insider U.S. Officials Deal Blow to Bitcoin – Wall Street Journal The deflation gang – FT Alphaville North America: Brooklyn to California Bubble Threat Grows in


ASX at the close

The US equity market rolls on, and if you are a equity money manager and not making money at present, you probably never will. The moves seen in stocks highlight the power behind the bull market, and while bad news is soon forgotten, good news provides another opportunity to buy. Perhaps the raft of data


European economy facing generational shift down

By Leith van Onselen Above is an interesting video interview screened earlier today on CNBC with Paul Drake, Founder of View from the Peak: Macro Strategies. In the interview, Drake argues: The European economy is facing a generational shift and a ‘lost generation”, whereby growth will be structurally lower for at least another 10 to


Unlike Australia, NZ Budget tackles housing affordability

By Leith van Onselen While the major political parties continue to ignore Australia’s highly unaffordable housing, the 2013 New Zealand Budget, released earlier today, announced a variety of measures aimed at boosting supply and improving overall housing affordability. Measures announced included: Introduction of the Housing Accords and Special Housing Areas Bill, which will enable the


Rethinking the middle-class

Cross-posted from Paul Wallbank Technologist Jaron Lanier says the internet has destroyed the middle classes. He’s probably right, a similar process that put a class of mill workers out of a job in the Eighteenth Century is at work across many industries today. Those loom workers in 18th Century Nottingham were the middle class of the


Coalition paints itself into corner on Budget

By Leith van Onselen Tonight’s Budget reply speech from Tony Abbott is set to be yet another display of “small target” politics. We can expect the Opposition leader to bag-out the Government’s financial record, all the while recycling the myth that the former Coalition Howard/Costello Government was a sound financial manager, a view debunked recently


China’s most expensive ghost city

By Leith van Onselen China’s ghost cities, the most famous of which is Ordos in inner Mongolia, have regularly been cited as a prime example of China’s unsustainable construction-led economy. In 2009, AlJazeera posted an explosive video showcasing Ordos’ ghost apartments and frenetic pace of construction, which exemplified the “build it and they will come”


Macro Morning: Gold weak

Data everywhere and not a drop of growth. Stocks kept keeping on overnight with both the Dow and the S&P touching new all times highs in trade before pulling back a little while stocks in Europe rallied even though we saw some very poor GDP data for the Eurozone. Germany managed to print a moribund


IMF warns on NZ housing market

By Leith van Onselen New Zealand house prices surged again in April, with the national stratified median price hitting a record $412,500, but prices in New Zealand’s biggest city – Auckland – falling slightly from last month’s record to $595,500 (see next chart). House price growth across New Zealand is accelerating (see next chart). Nationally,


Europe’s depression deepens

Not that it should be a surprise to most MB readers, but the economic data coming out of nations within the Eurozone is once again “worse than expected”. Last night it started with Italy: Italy’s economy contracted more than expected in the first quarter of 2013, shrinking 0.5% from the previous three months as activity


Let the dangers mount!

Cross-posted from Kate Mackenzie at FTAlphaville. ‘Collectively, humanity has yawned and decided to let the dangers mount’ So writes the FT’s Martin Wolf in his column today, which starts out noting that atmospheric carbon dioxide concentrations exceeded 400 parts per million last week, the highest level in 4.5m years. As he says, if we take a prudential