The campaign for national ignorance digs in

Back in 1986 when I did my HSC the teachers told us that we had to read the Sydney Morning Herald in a crucial window during the year because whatever Ross Gittins was writing about was likely to form, or frame, the questions in the Economics exam we were going to sit later in the year. So

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Our great and invisible friend

A quick observation on the appearance of RBA boffins before the Senate’s Standing Committee on Economics last week (find the Hansard below). There was lots of interesting discussion of banks, competition, mortgage rates, unemployment and the adjustment to mining led growth, Europe and its effect on the local economy and the high dollar and its


February 27th Links: The vote

Global Macro G20 works on huge rescue deal for Europe  Reuters Indian military stepping up The Diplomat interesting Top 10 Reasons to attack the s$$t out of Iran Countercurrents Who won the globalisation game? Ze Chermans: Rogoff Der Spiegel Measuing inflation properly The Economist United States The Oracle of Omaha opines on housing  Calculated Risk Europe


MacroBusiness caption

Here at MacroBusiness we are contemplating taking the campaign for world macrobation to the next level. Ok maybe not, but we are contemplating the introduction of some MacroBusiness paraphernalia in order to get Reynard the Fox some further recognition out there in the wider world. We are in the early days on this, so we aren’t


China links

Courtesy of Sinocism: 归真堂再开放参观者跪拜谢罪 微博遭数万人咒骂_新闻_腾讯网 – 中石油中石化93号汽油颜色不同引发质疑(图)_新闻_腾讯网 – China’s Surprising Rebalancing Act – Carnegie Endowment for International Peace – China’s economy fared better than most had expected in 2011. Though growth has gently slowed, it remains the world’s best performing large economy and strongest economic engine. MIKE DAISEY: David Pogue’s Defense Of Apple And Foxconn’s


Have labour will travel

We cannot say we were not warned. Many commentators about globalisation said that it would create an imbalance between labour and capital, for the simple reason that capital is free to move wherever it wants, and labour, except at the very top end, is not. And so it is turning out, with the middle classes


Weekend Links

Markets: Up:  euro, gold, grains, ore, energies Flat: Stocks, Aussie,  metals, Treasuries Down: USD, CRB Sovereign Yields: 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


Trading Day – 24th February

Because of the chaos and indecision in Canberra, the S&P/ASX 200 Index finished…….up for the day and week, although in after hours trade, the market has given back a lot of today’s gains in preparation for a likely flat night tonight on overseas equity markets. The Aussie market gained nearly half a percent or 20 points and


Fitch downgrades Megabank less ANZ

In news just after the market closed, ratings agency Fitch has downgraded Commonwealth Bank of Australia’s (CBA), National Australia Bank Limited’s (NAB) and Westpac Banking Corporation’s (WBC) Long-Term Issuer Default Ratings (IDR) and Viability Ratings (VR) by one notch. The ANZ division of MegaBank was left untouched, with Fitch re-affirming its rating. The rating actions


Chart of the Day: Rise of the Machine

Something to keep your mind off the realpolitik space opera going on today. A chart from Nanex Research, which chronicles the rise of the HFT (high frequency trading) Algorithm Machines from January 2007 through January 2012: Stay and watch to the end, because its just fascinating.


Analyst looks at foot, sees shoe

From a Chris Zappone report titled “Leadership battle damaging says analyst” at the SMH: City Index FX strategist Kara Ordway said the leadership battle is not good for the nation’s investment profile. “What investors want is certainty,” she said. “What the situation is creating at the moment is shaky ground to where businesses are uncertain of


MI eggheads raise forecast

Regular readers will know that I follow the Melbourne Institute Monthly Bulletin of Economic Trends, a dour document that is quite useful in keeping the boffins at Treasury and the RBA honest given they are similarly styled economists without the need to gild the lilly. The MI view was much the same as that of


Michael Pettis on reforming China

This morning, Bernard Hickey at Interest.co.nz linked an interesting article from Michael Pettis, professor of finance at Peking University, entitled: When will China emerge from the global crisis? It’s a long and wide-ranging article in which Pettis discusses the growing debate within China about industry structure, the move to free markets, growing inequalities, and economic


China links

Courtesy of Sinocism: DIA director: China preparing for space warfare | Washington Free Beacon – Army Lt. Gen. Ronald L. Burgess, director of the Defense Intelligence Agency, disclosed new details of China’s space weapons programs last week, including information regarding China’s anti-satellite missiles and cyber warfare capabilities.Burgess stated in little-noticed written testimony prepared for an appearance


RBA muzzles the government

RBA Governor Glenn Stevens appears today before Standing Committee on Economics and following is his opening address with a few points at the end. When we last met with the Committee in August, we had entered a period of heightened uncertainty about the global economy and financial system. The investment community was focusing increasingly on


Market Morning

A relatively solid night on risk markets, with Iranian tensions pushing the price of oil ever higher, gold taking bigger strides and the Dow up to its May 2008 highs. Let’s have a closer look at what happened last night in detail: The UK FTSE finished up 21 points or 0.35% to 5937, still trying


Canadian bubble trouble

By Leith van Onselen In the years following the global financial crisis (GFC), the Canadian and Australian housing markets were among the best performing in the English-speaking world. While housing markets in other English-speaking nations- most notably the United States, Ireland, the United Kingdom, and New Zealand – remained in a funk, Canada’s and Australia’s


Retail renaissance?

David Jones CEO Paul Zahra caused a brief stir in retail stocks yesterday when while announcing half year results he noted: …we did see an improvement in December and January, compared to October and November, which, in turn, were better than August and September. His own stock spiked, as did competitors, amid hopes that retail


Europe’s credit crunch is still to come

With the Greek PSI deal fast approaching the European banks are out declaring their hands: RBS says: The Royal Bank of Scotland has reported its fourth year of losses since the bank’s bailout in 2008. The bank posted an attributable loss of £2bn in 2011, up from a loss of £1.1bn in 2010. … RBS had to


February 24 Links: Crudely up

Markets: Up:  euro, gold, grains, ore, energies Flat: Stocks, Aussie,  metals, Treasuries Down: USD, CRB Sovereign Yields: 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


The RBA takes the credit

Find below a speech today by the RBA’s Head of Financial Stability, Luci Ellis, with commentary. PRUDENT MORTGAGE LENDING STANDARDS  HELP ENSURE FINANCIAL STABILITY  Good morning, and thank you to RFi for the opportunity to speak to you today. Property markets and financial stability are both topics that are dear to my heart, and I hope to


Trading Day – 23rd February

Amongst the leadership squabbles in Australia, equity markets were subdued throughout Asia, with the S&P/ASX 200 Index again finishing flat for the day, losing just 7 points or 0.1% to 4293 points, remaining below 4300 points and going nowhere as we move into the backend of the earnings season: Before we go on, as I missed Market


Roy Morgan Consumer Confidence falls

From Roy Morgan, it’s weekly consumer confidence index fell again this week: Consumer Confidence has fallen to 113.4pts (down 2.3pts in a week), according to the Roy Morgan Consumer Confidence Rating conducted last weekend (February 18/19, 2012). Consumer Confidence is now 7.2 points lower than a year ago, February 19/20, 2011 (120.6). The decrease in


China links

Courtesy of Sinocism: 央视或为林书豪 调整NBA转播 – 产经 – 21世纪网 – CCTV wants to adjust schedule to show Knicks/Lin. Media read 2 much in2 lack of broadcasts? Chinese Ball Maker Trademarks Lin – China Real Time Report – WSJ – As attention focuses on the few who first saw potential in surprise basketball standout Jeremy Lin, a Chinese


All aboard Asciano

Glancing through the broker reports, which are steadily turning bullish, a more positive attitude towards Asciano is notable. A ports business should be doing well in the midst of Australia’s resourecs boom, although of course the company has had its travails. But Macquarie is sensing that the business is becoming boring with its EBIT of $295 million. Such predictability is


Two speed wages

The Australian Bureau of Statistics (ABS) has just released the Average Weekly Earnings (AWE) data for the November quarter.A breakdown of the key changes is below: According to the ABS, on a seasonally adjusted basis, national total AWE increased by 0.8% in the November quarter, to be 3.7% higher year-on-year. Full-time total earnings increased by


Deleveraging pulse unchanged

Westpac’s February Red Book is out and shows some interesting results following the two rate cuts. For me the most significant chart is the following: That’s a fair drop in the appeal of straight savings but only a commensurate rise in the appeal of paying down debt. Shares and houses very much still on the


More zombie PMIs

Last night saw the release of the February Flash PMIs in Europe and, like the Chinese result yesterday, the pulse towards growth that was apparent in January is fading in February. The headline results were weak: Flash Eurozone PMI Composite Output Index at  49.7 (50.4 in January). Second-highest in six months. Flash Eurozone Services PMI


Hugh Hendry’s crystal ball

Hugh Hendry is Eclectica’s somewhat irreverent, sometimes irate CIO (Chief Investment Officer). He is a free thinker in a world of compliance and his results speak to both the depth and quality of his process. Yesterday, the Prince tweeted a recent Barron’s interview of Hugh, and I wanted to share both the link and a


Chinese inflation is here to stay

Yiping Huang from Barclays Capital has been producing a multi-part research series on the Chinese economy.  The fifth part is on Chinese inflation.  Not surprisingly and actually quite rightly, Huang states that inflation has been understated by 1-2 percentage point at its peak.  That would put inflation at roughly 8.5% instead of 6.5% in July