Cross-posted from George Magnus: There’s a cute expression that last did the rounds after Lehman went belly-up. As the destruction of balance sheets tore through the the financial system, the black cry rang out that ‘there’s nothing right on the left side of the balance sheet, and nothing left on the right’. Eventually we recovered.
Global Macro / Markets / Investing: Robotization Without Taxation? – Project Syndicate Cyclical forces in the global trade slowdown – Vox Economic growth and reductions in carbon emissions – Vox Is Bank Lending A Concern? – Economist’s View Americas: Americans’ Shift To The Suburbs Sped Up Last Year – Five Thirty Eight Death rates for uneducated white Americans rise – FT
by Chris Becker Is the dip already over? Most stock markets in Asia put in positive or scratch sessions taking the shaky but still positive lead from US stocks overnight. Currencies were effectively unchanged with a small rally in USD against Yen offset by a lower Aussie and Kiwi dollar as commodities pulled back slightly.
By Gareth Aird, senior economist at CBA: Key Points: Spare capacity in the Australian economy continues to weigh on inflation and wages growth. Labour market slack varies across the states reflecting divergences in state final demand. Talk of rate rises is premature because there is a significant amount of spare capacity in the economy. Overview:
By Leith van Onselen The Housing Industry Association (HIA) has released new forecasts of a “boom” in home renovation activity: “2016 marked the strongest year since WWII for new home building starts in Australia but our forecasts indicate that activity is set to decline on this front over the next three years,” commented HIA Senior
By Leith van Onselen The ABS released its Australian demographic statistics for the September quarter of 2016, which revealed that Australia’s overall population growth rate has accelerated led by unprecedented growth in Victoria, which has once again obliterated records. According to the ABS, Australia’s population rose by 1.46% in the year to September 2016 to
Via the AFR: The Turnbull government is coming under pressure to intervene to keep the massive Hazelwood power plant open in the face of increasing alarm about power shortages. Lobby groups are believed to have approached the government in the past 24 hours seeking some form of intervention to keep the ageing power station open
By Leith van Onselen LF Economics have lodged a submission to the Senate Standing Committee on Consumer Protection in the Banking, Insurance and Financial Sector, which highlights negligence by our financial regulators in their duty to protect consumers from mortgage fraud: … there appears to be adequate protections available to consumers afforded by the law
Via The Australian comes former Santos chief executive John Ellice-Flint: “Australia’s east coast gas supply dilemma can be viewed as the total failure of users — utilities and manufacturers — to contract short, medium and long-term supplies of gas,” Mr Ellice-Flint says in his opinion piece. “While our east coast domestic gas buyers have been
An AFR quote from PIMCO today is interesting: PIMCO’s Australian head Rob Mead says indebted Australian households have caught the Reserve Bank in a trap. While the US Federal Reserve may have put its foot firmly on the brake if it needs to slow its economy a slight tap by the RBA may prove too jarring. The
By Leith van Onselen KPMG’s Bernard Salt – the self-proclaimed “unabashed supporter of a bigger Australia” – has penned another piece in The Australian spruiking mass immigration and claiming that the march toward ‘mega-cities’ will drive the nation’s productivity: There will be more growth in Australia’s biggest cities over the next 30 years than in
From the excellent crew at Credit Suisse today: When political correctness is key… Perspectives in the domestic gas market, certainly in terms of scrutiny and public perception, have changed beyond all recognition in the past few weeks. To quote APA CEO, Mick McCormack, every petshop parrot now was a view on it all. As of
This reeks of desperation: It is the sort of deal that would have any real estate investor salivating: Interest-free loans, and the ability to walk walk away from any losses if the price falls. This is the share offer that real estate guru, John McGrath, is using to retain the top talent at his embattled
Macquarie stating the obvious today (but still before most others): As good as it gets: Hedging our bets Most questions we encounter are about why commodity stocks shouldn’t be lower rather than why they should trade higher. The bears have been on this track for more than 6 months, so we are cautious about putting
By Leith van Onselen The Australian property bubble has grown so absurdly large, and is so connected from the sad little economy beneath it, that it is consuming everything in its path. The latest example comes from economist Saul Eslake, who will address the Conference of Major Super Funds today, whereby he will warn that
By Chris Becker The dip in stocks may well be over before it starts with US stocks recovering last night, while Euro bourses slipped on the London attacks but currency markets were non-plussed. Treasuries remained strong with 10 year yields slipping below 2.4% with further advances in European yields on the safe haven trade.
By Leith van Onselen In late 2014, the Productivity Commission’s (PC) released a report on the provision of public infrastructure, which explicitly warned that the Coalition’s financial incentives to the states to sell-off public assets (“asset recycling”) “could act to encourage privatisation in circumstances that are not fully justified and encourage the selection of new
By Leith van Onselen As widely expected, the Reserve Bank of New Zealand (RBNZ) has held the official cash rate (OCR) at 1.75%. The release accompanying the decision was basically a carbon copy of the February statement, with RBNZ governor Graeme Wheeler noting that the OCR is likely to remain on hold for an extended
The east coast gas price retains a very healthy premium to exactly the same gas sold in Japan today: This is despite the fact that in a functional market locals should never pay higher than export net back prices which is the Japanese price minus the cost of transport, liquifaction and shipping, which ought to be
By Leith van Onselen Over the past year, I have presented data showing that the historical relationship between dwelling prices and the value of housing finance commitments (excluding refinancings) has broken down somewhat over the latest housing cycle: I have also offered two potential explanations for this breakdown: falling transaction volumes, whereby falling finance commitments are
Via the AFR: Lenders and developers are offering property investors lucrative incentives ranging from annual commission payments of $100,000, loan discounts of more than 100 basis points and cash incentives, a review of top deals reveals. Developers are also encouraging investors with promises of deluxe fixtures, rental guarantees, price discounts and ‘special deals’ before state-based
By Leith van Onselen I never thought I’d see the day that Australia’s real estate lobby – the Real Estate Institute of Australia (REIA) – supports Australia’s anti-money laundering (AML) regime being extended to real estate gatekeepers, provided offshore sales offices and websites are also captured. From The AFR: Real estate agents with offshore sales offices
I’m not a big Barnaby Joyce man but yesterday he cut through nicely: “It’s like fascinating yourself with the drivel scrawled on the back of a toilet door,” a frustrated Barnaby Joyce explains. “It’s best you just ignore it, do your business and move on.” He’s talking about the ongoing distraction over the conservative cause