EIA cuts oil consumption again

Via EIA this time: In the September 2019 update of its Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) revised its forecast for 2019 global liquid fuels consumption down to 100.8 million barrels per day (b/d), 0.1 million b/d lower than the August STEO and 0.7 million b/d lower than the January STEO. EIA attributes

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Melbourne land bubble deflates

Last year it became apparent that Melbourne’s house and land market had become an giant bubble after the median price for a housing lot hit $339,000 – up 21% in only 12 months – with steeper rises in the cost per square metre: In August 2018, the panic began to set in with land speculators rushing for the exits.


Is the NBN already a white elephant?

Back in April, the head of the Australian Competition and Consumer Commission (ACCC), Rod Sims, lamented that Australians were paying more for lacklustre broadband internet under the $50 billion National Broadband Network (NBN): “We are now observing prices of low-speed NBN plans offered to new customers that are at least $10 per month higher than


China’s credit impulse remains weak

I noted yesterday that Chinese broad credit is still struggling to rebound, quite unlike previous stimulus episodes: Some more charts today from WSJ Daily shot make the point again: More stimulus will be needed or growth will keep slowing. The PBOC is clearly loath to cut cash rate lest it crash CNY but it will


Andrew Bolt’s full Scott Morrison treason indictment

Here is the full Scott Morrison treason smash from Andrew Bolt: Meanwhile, the political economy is melting down as the Morrison Government desperately tries to hang onto its parliamentary majority. Peter Dutton is out contradicting his own department in ASIO which has warned that Liu is compromised: “As Home Affairs Minister with responsibility for ASIO


Australian property sales crash to fresh 23-year lows

Below are the latest charts, derived from CoreLogic data, plotting annual sales volumes across Australia’s capital cities to May 2019: Sydney (-48%), Melbourne (-38%), Brisbane (-41%), and Perth (-37%) are all down massively from their most recent peaks, whereas across the combined capitals sales are down 36%. In fact, the last time annual sales volumes


ScoMo’s sub-prime FHB guarantee rises

Via Ian Rogers at Banking Day: The First Home Loan Deposit Scheme will kick in from 1 January 2020, allowing up to 10,000 borrowers a year to benefit from guarantees for lenders from the Australian government. The National Housing Finance and Investment Corp will administer the scheme, with a bill to enable this policy introduced


Professors: Property bubble has engulfed society

Via Domain: Forget blue or white collar workers – our society is now broken down by the size of our investment housing portfolio. New research by academics at the University of Sydney suggests the office room debate about property prices and Australians’ intimate understanding of negative gearing points to how we have become an “asset


Macro Morning

By Chris Becker  A volatile night on currency markets as the ECB cut rates and restarted its QE program in the face of a continental recession and Brexit concerns. Stocks rose mildly in response however, while bond yields are weirdly higher, including Euro! Oil prices fell back again while gold was largely unchanged, but remained


Daily iron ore price update (blow off)

Texture from Reuters: Financial markets in China are closed on Friday for the nation’s Mid-Autumn Festival. Amid declining iron ore seaborne arrivals, purchases of the material may pick up due to some restocking demand of steel mills ahead of the country’s National Day celebrations in early October, said Richard Lu, senior analyst at metals consultancy


“Are dictators in Beijing now writing Morrison’s lines?”

Deary me, Simon Benson: Anthony Albanese’s tactical attack on Liberal MP Gladys Liu is at risk of backfiring horribly. Scott Morrison’s strident press conference today in her defence would have been all over WeChat in minutes. And the Chinese community would have heard only one thing. The Labor Party is racist. The clumsy imputation that


CoreLogic weekly Australian house price update: rocket man

In the week ended 12 September 2019, the CoreLogic 5-city daily dwelling price index, which covers the five major capital city markets, surged another 0.35%: The rise in values was again driven by Sydney and Melbourne, where values rocketed: Quarterly dwelling values are now rising solidly, again driven by Sydney and Melbourne: However, annual losses


Coalition’s visa privatisation will torpedo Australia’s borders

Following his stellar expose last month, investigative journalist, Michael West, has done another excellent job exposing the cabal of vested interests behind the Morrison Government’s plans to privatise Australia’s visa system: Flemington market’s fruit and vegetable mogul Santo Peter Tripodina and his 38-year old son, property developer Adrian Tripodina, have emerged as mystery power-brokers behind


Chinese international student visa applications plunge

The June quarter international student enrolment data, released by the Department of Education, revealed a slowdown in enrolments from China: Chinese international student enrolments increased by only 8,400 (4.3%) in 2018-19, a sharp slowdown from the 25,700 (15.1%) increase recorded in 2017-18. As shown in the next chart, the slowdown in Chinese international student enrolments


Links 13 September 2019

Global Macro / Markets / Investing: Uber lays off 435 employees after it reported a $5.2 billion quarterly loss. – USA Today Wall Street bankers ‘shaking in their boots’ about Elizabeth Warren winning presidency in 2020 – Yahoo The Massive Cost of Not Adapting to Climate Change – Bloomberg Hong Kong stock exchange makes $36.6


Macro Afternoon

The risk on mood has increased here in Asia with solid rises across most stock markets, although locally the ASX200 is dragging its feet. This is all due to the delay in Chinese tariffs, with bond yields rising and oil prices still under pressure post-Bolton “firing”. The Shanghai Composite is making a comeback, currently up


Citi: Iron ore to $55

Via Bloomie: “Steel demand is no longer going to be what it was,” Ed Morse, global head of commodity research, said in an interview. “No combination of India, Brazil and any other emerging-market country, no matter how big, is going to replace what China did alone,” he said, referring to spike in demand from the


Strong mortgage rebound driven by Sydney and Melbourne

CoreLogic’s research analyst, Cameron Kusher, has released some interesting analysis of last week’s ABS housing finance data, showing that NSW (Sydney) and VIC (Melbourne) are leading the strong rebound, which is reflected by their rising dwelling values: The ABS results confirmed that housing finance commitments data has shown a sharp rise with the uplift in


Gottiboff parties as the bubble is back!

Via Gottiboff today: Last Friday three massive Sydney apartment complexes were given the approval go-ahead and Harry Triguboff’s Meriton will immediately proceed with developing all three in a $3 billion project – the biggest apartment building operation in Australia’s history. …But bank market share of the boom funding has been decimated. Meriton reports that 50


Gas cartel wrecks Australian electricity grid

Via Matthew Warren, former chief executive of the Australian Energy Council, the Energy Supply Association of Australia and the Clean Energy Council, at the AFR: Wholesale spot electricity prices are now regularly trampolining in Queensland, NSW and Victoria, with prices hitting zero or entering negative territory, and then rocketing back up once the sun has


Morrison: Liu a “great Australian”, plays race card

Via The Australian: Scott Morrison has thrown his support behind embattled Liberal MP Gladys Liu, saying she is a “great Australian” and accused Labor of a “grubby smear” against her and all Chinese-Australians. …“Gladys is a Chinese-born Australian. Does that make her in cahoots with the Chinese Government? Of course no. It is a ridiculous


Litigants pass the buck for flammable cladding debacle

Back in March, the Victorian Civil & Administrative Tribunal (VCAT) ruled that those who consulted to builder LU Simon on Melbourne’s Lacrosse Building were responsible for the flammable cladding that caused a potentially fatal fire in 2014. LU Simon was also ordered to pay apartment owners $5.75 million in damages arising from the fire, but


More on the bond bloodbath

Via the excellent Damien Boey at Credit Suisse: With bond yields rising sharply, the Australian yield curve (10-year bond yield minus cash rate) is no longer inverted. Investors have started to price out further RBA rate cuts for this year, although the expectation remains for one more cut on the balance of probabilities. Connected with


UK workers still enjoying Brexit bonanza

While Australian wages remain stuck in the mud, held down in part by the endless deluge of migrant workers, the lower immigration arising from Brexit continues to be a bonanza for UK workers, who are enjoying both strong wage growth and unemployment at 45-year lows: Wages have continued to grow at a strong pace and