GDP double takes

Here are some more analyses of today’s National Accounts. The pick in my view is the first by Bill Mitchell: As winter arrived (June 1), the March quarter Australian National Accounts came out and showed that the Australian economy contracted by a staggering 1.2 per cent. With the seasons passing into spring and the warm

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Trading Day

The S&P/ASX 200 rebounded strongly today, up 107 points or 2.6% to 4183 points. In after hours trading, the market is holding on to these gains awaiting the Euro and US sessions, which are also likely to be bullish. Asian markets experienced slightly smaller gains, with the Nikkei 225 up 1.9% to 8756 points whilst


GDP rebounds

The ABS released their National Accounts aggregates today, with a broad surge in GDP growth since the dismal natural disaster-affected first quarter.  The key figures are below. Also important is the revision to the March quarter – up from -1.1% to -0.9%, leaving GDP up 1.38% over the year to June, and per capita GDP


A couple of points from the Guv

I really quite enjoyed this morning’s speech from Glenn Stevens. It was lively and candid and offered a couple of points worth noting for monetary policy debates. The first point I want to make is that Stevens has rather subtly ridden to the defense of the RBA board: By the time of the May Board meeting, there


Still interesting times

Here’s a copy of Glenn Stevens speech he is currently delivering in WA: Still Interesting Times Glenn Stevens Governor Address to the Chamber of Commerce and Industry (Western Australia) and the Chamber of Minerals and Energy (Western Australia) Corporate Breakfast Perth – 7 September 2011 It is very good to be with you this morning. In the


Europe’s optimism trap

To describe as sobering last night’s UBS report into the consequences of a European breakup hardly does it justice. It is about time someone began to assess the consequences of a breakup with a hard, cold eye and kudos to UBS for doing so. Hopefully it will help dispel some of the elementary drivel floating around


Chart of the Day: USD rally

The overnight action of the Swiss Central Bank (CNB) effectively pegging the runaway Swiss Franc (CHF) has to be looked at in context to the USD, which is experiencing a reversal of its own. First, let’s have a look at what the CNB is fighting against: the two year plus rally of the CHF vs


Unconscious RBA ready to cut

Howdy all. Back from holiday and into the storm! The RBA released its Statement yesterday after the Board meeting as is its custom. It is my custom, and many other pundits and commentators, to then go through the statement to try to distil from the change in emphasis and nuance what the RBA is thinking.


Hong Kong property stall

The Hong Kong government just sold three pieces of land.  The FT reports that the result is quite bearish. The results were actually fairly mixed. The first site being sold was Tseung Kwan O area 66A, which can provide 792,898 sq. ft. of residential space.  The pace of the auction was extremely slow, and the government threatened


Retail pain here to stay

Yesterday’s announcement by the Reserve Bank of Australia (RBA) that the official cash rate would remain on hold provoked a stinging response from the Australian Retailers Association (ARA): The Australian Retailers Association (ARA) says the Reserve Bank of Australia’s (RBA) decision to hold interest rates has left retailers struggling to hold on. The ARA had


A ray of sunshine for housing?

Well it looks like housing finally got some good news yesterday with a bit of a Queensland driven rise in housing finance. This was a predicted event. I had this to say back in July: I am actually expecting to see a bit of an uptick in median values in July as people bring forward their property transactions to


Stimulus for a recession that never was

Hands up who knew that Australia avoided a technical recession in the aftermath of the GFC? Kevin Rudd certainly got some miles out of it, noting in his farewell speech how proud he was of that fact and the role his government played.  But as usual all is not what it seems.  The Keynesians shouldn’t


Fat tax won’t slim a thing

Last week Hungary became the first country to introduce a comprehensive ‘fat tax’ on foods with high fat, sugar or salt content.  But it won’t make them slimmer or reduce health costs. Beginning Sept. 1, Hungarians will have to pay a 10 forint (€ 0.37) tax on foods with high fat, sugar and salt content, as well


Trading Day

The S&P/ASX 200 fell again today, down 66 points or 1.6% to 4075 points. In after hours trading, the market is up slightly to 4100 points waiting (dreading?) the European market open and a probably gap down when the US re-opens after the long weekend. Asian markets experienced similar losses, with the Nikkei 225 losing


The risks swelling around gas

Australia’s energy sector, or at least LPG and CSG sectors, is not yet creating the impact of iron ore or coal, and in some ways represents more a play on the future than either of the aforementioned commodities. But there is also likely to be a growing polticisation with these industries, if only because of their


Qld drives housing finance bounce

So, we’re having a bit of a bounce in housing finance. Owner occupied was up 1.6% in July and investors 1.9%. Nothing too extravagant but certainly a rising from the floor. To the knees one might say: We’ve recovered much of the territory lost in the first half slump, though as you can see the


Decrease in CAD equals lower GDP

The Australian Bureau of Statistics (ABS) released current account figures for the June 2011 quarter (emphasis added) today: In seasonally adjusted, current price terms, the current account deficit fell $3,696m (33%) to $7,419m in the June quarter 2011. Exports of goods and services increased $5,837m (8%) and imports of goods and services increased $2,985m (4%).


More CEOs grab bonuses

In The Great Crash of 2008, Ross Garnaut and I identified four major causes of the GFC: housing bubbles, global imbalances, clever money and greed. Pretty much none of these causes has been seriously addressed. But today I’m going to focus on the last. Greed is a part of all bubbles of course, but in


Chart of the Day: Equity carnage

Given the events of last night (German DAX down 5.3%, UK FTSE down 3.5%, Italian MIB down 4.8%), today’s chart will be an overview of equity markets and their short term patterns. Let’s start in Europe: The Italian (remember, 7th largest economy in the world, sometimes forgotten) FTSE MIB Index is about to retrace the


Economic cogs in the mining PR machine

As Houses and Holes pointed out yesterday, the Minerals Council of Australia (MCA) public relations machine is hastily filling the mainstream media vessel with its store of positively framed economic analysis. The latest analysis from the stockpile is a study undertaken by Deloitte Access Economics (DAE) which surveys Australian mining companies about their tax obligations in order


The Merkel effect

The true personal price of the Eurozone disaster was read out to  Angela Merkel overnight as her and her party got wiped out in the election in her very own state: German Chancellor Angela Merkel’s party suffered its fifth election loss this year after she failed to sway voters in her home state with a campaign


They are coming for the RBA

To me, it’s as clear as day that Australians hate their new economy. And, at face value, what’s to like? Although the MSM drones on about our good fortune, the fact is, it’s not like the old times. Back then, blind Freddy could get rich, just buy a house, then another! So long as you


CPI chameleon

The Consumer Price Index (CPI) forms a backbone for economic analysis.  We apply it to a broad range of circumstances to modify nominal dollar values into comparable real dollar terms, and our central bank has relied heavily upon it since mid-1993 when it found practical expression for its statutory objectives for monetary policy in the


Fighting Australia’s “hot money” problem

Tell me the first country that comes to mind when I state the following economics terms. Long running current account deficits, large private sector debt, high household indebtedness, high hidden inflation, falling productivity, falling real incomes, hot money flows, asset bubbles. Greece ? Spain ? Italy ? How about Australia? Last week I posted an


Seek, and you will find debt

Seek (SEK) released its 2011 results recently.  At Empire Seek has been one of our favourite stocks – a near-wonderful business with good ROE, great branding, total dominance in the Australian and NZ online employment market with a strategy for diversifying revenues through international acquisitions.  Only through lack of a deep competitive moat did it


Insiders turn bearish on housing

You know the housing market has taken a turn for the worse when industry groups renowned for ‘taking-up’ the housing market change track and start conditioning sellers to lower their price expectations in order to promote sales. A reader, last week sent me the below email report from Ray White, which I think you will


Trading Day

The S&P/ASX 200 slumped over 2% down today, after absorbing Friday’s US job data. The index is down 101 points or 2.4% to 4141 points. In after hours trading, the market is at 4130 points waiting for the European market whilst the US has a day off today. Asian markets experienced similar losses, with the


Mining 1, everyone else 0

For a group of pick wielding boof heads mining sure does a hell of a job on its public relations. Such a good job, in fact, it is running rings around the city-slicking bags of fruit who are supposed to understand the services business. What the hell am I talking about? This, from the SMH today:


ANZ job ads point to rising unemployment

ANZ job ads was out earlier today. It continues its recent trend of slowing growth: Total job advertisements on the internet and in newspapers decreased by 0.6% in August. Annual growth in total job advertisements decelerated to 6.1% y/y. • Newspaper job ads fell by 3.0% m/m, while internet job advertising decreased by 0.5% m/m.


Revisiting last year’s forecasts

The economy is a complex beast, and even forecasts based on solid theory and evidence can get the timing wrong.  Here’s just a quick snapshot of some economic forecasts from a year ago to lighten the mood as we head this week into the National Accounts (Wednesday). Bill Evans – Westpac Chief Economist – 3