Latest posts

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Secretive China-led mega-trade deal stalls

By Leith van Onselen At the beginning of the year, the Turnbull Government revealed that Australia would head into a new secretive 16-member mega trade pact called the Regional Comprehensive Economic Partnership (RCEP), which was expected to be concluded by year’s end. The RCEP is backed by China and also includes the ASEAN countries along

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New Aussie Battler Party launches daft housing non-solutions

By Leith van Onselen A new micro political party, the Aussie Battler Party, has launched some ridiculous housing policy proposals in a bid to win a Victorian upper-house seat in this month’s election: The party’s founder Stuart O’Neill, a self-employed life coach [said]… his party’s policies include establishing a government-backed mortgage lender for people on low

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Population ponzi overruns Melbourne’s schools

By Leith van Onselen The lack of planning and foresight to cope with the never-ending population (immigration) influx into Australia’s big cities never ceases to amaze. Over the past 13-years, Melbourne’s population has ballooned by an insane 1.2 million people: And the predictable result has been the crush-loading of all manner of economic and social

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No Top 5 permanent skilled visa occupation is in shortage

By Leith van Onselen If you want a textbook example of why Australia’s skilled visa program is a giant fraud, look no further than the top five occupations granted permanent visas in the skilled stream in 2017-18: Accountants (3505) Software Engineer (3112) Registered Nurses (1561) Developer Programmer (1487) Cook (1257) According to the Department of

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Weak wages growth shatters Budget forecasts

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released its Labor Price Index for the September quarter of 2018, which revealed more disappointing wages growth: According to the ABS, wages grew by just 0.62% (s.a.) and 0.54% (trend) in the September quarter. Private sector wages grew by 0.55% (both s.a. and

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So, is the HEM doomed or not?

Yesterday’s Federal Court decision to stomp on ASIC’s WBC settlement has all tongues wagging. Martin North sees as bullish: The use of HEM may well be back in play, following the latest from the Westpac ASIC case.  Given that at some banks HEM is still being used for around half of applications, and the Royal Commission commented

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Paul Keating is a super idiot

By Leith van Onselen The architect of Australia’s compulsory superannuation system, Paul Keating, has once again demanded the federal government to raise Australia’s superannuation guarantee (i.e. compulsory superannuation contributions) from 9.5% to 12%, claiming it would ensure workers retire with dignity: Mr Keating told 7.30 that super payments had to be raised to 12 per cent,

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Consumer sentiment forecasts dour Xmas

Via Westpac: Consumer sentiment has continued to recover from the mild setback in the September quarter. The headline index remains 1.6% below its July peak but is now more comfortably above the 100 line, indicating optimists outnumber pessimists. Indeed, while confidence may still not be particularly strong, there has been a clear improvement over 2018.

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Tech recruiter: Give us migrants so we can lower IT wages

By Leith van Onselen Last year, News.com.au published an illuminating article profiling a skilled Australian IT worker that had arrived home from working as a project manager at Amazon’s Seattle campus but could not gain employment despite hundreds of job applications: AT 25 years old, James was living a tech-head’s dream. The university graduate had been

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ANZ slams and bolts door on easy mortgages

Via The Advisor: ANZ has informed brokers that it will introduce enhanced home loan verification requirements, effective from 20 November. Key changes include the following: PAYG income: Brokers are required to obtain three months’ bank statements showing salary credits in order to verify income (in addition to payslips). For casual, temporary and contract employees, six months

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Daily iron ore price update (she’s gunna break)

Iron ore prices for November 13, 2018: Spot fell. Paper too. Steel held up. Late October CISA steel output came off sharply as it should with falling seasonal demand. Surely she’s going to break here. Demand is waning with questions over Chinese stimulus. Supply issues in Peru, Brazil and Pilbara are resolved. Mills are destocking

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Frydenberg launches the great Aussie bank bailout

Via the AFR comes $2bn for small business from Amateur Treasurer Josh Frydenberg: The creation of a taxpayer-backed securitisation fund to invest in small and medium enterprise (SME) credit will also potentially expand an asset class for institutional investors such as superannuation funds to invest in. Treasurer Josh Frydenberg and Small Business Minister Michaelia Cash

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Another day, another worst ever negative gearing reform attack

By Leith van Onselen Peter Gleeson’s moronic attack yesterday on Labor’s negative gearing policy has found company, with Australian Taxpayers Alliance (ATA) director, Satya Marar, also claiming Labor’s policy would somehow “slam the vulnerable”: …renters and retirees on self-managed super funds are set to take the greatest hits… While existing investors and super fund holders can

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Sydney landlords savaged by falling prices and rents

By Leith van Onselen SQM Research has released its rental vacancy series for October, which revealed a 0.1% decline in the national vacancy rate over the month and a 0.1% decline over the year: Over the year, decreases in vacancies were recorded in Melbourne (-0.1%), Adelaide (-0.3%), Perth (-1.1%), Brisbane (-0.7%) and Canberra (-0.2%), whereas

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Melbourne’s extreme migrant class war

By Leith van Onselen We already know that Melbourne has experienced insane levels of population growth over the past 13 years, driven by mass immigration: And that the lion’s share of this population growth has taken place in the outer suburbs of the city: Yesterday, the Victorian Council of Social Service (VCOSS) reported that Melbourne’s outer

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Capital Economics: Labor to sink Australian dollar

Via Capital Economics: Labor’s proposals for a number of regulatory changes could worsen the investment climate and dampen business confidence, but we think their impact on economic growth would be small. All told, a Labor victory would probably lead to weaker economic growth over the next couple of years. Adding in the negative wealth effect

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Links 14 November 2018

Global Macro / Markets / Investing: Trump’s protectionism might just save the WTO – Washington Post What plunging oil prices may be telling us about the stock market and global economy – MarketWatch The CEO obsession with bitcoin and blockchain is over – Axios Aggregating labour supply elasticities – VOX Global trends in interest rates

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Macro Afternoon

Stocks are sharply lower across most of the region in response to the risk off mood overnight with the added concern of a breakdown in Brexit negotiations and the falling oil price adding to the tensions. The PBOC again moved the Yuan closer to the 7 handle in a big move in today’s fix with

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Another shock to Aussie growth as drought bites

Via QCL: HORROR receival figures into the GrainCorp storage network highlight the depth of the drought in Australia’s north-eastern cropping zone. Total new-crop grain receivals into the GrainCorp bulk handling network as of November 5 totaled just 93,300 tonnes, with Victorian deliveries, traditionally not a major factor until December, making up over a quarter of the tally. And