56

How Las Vegas gambled and lost

In yesterday’s article on the release of the latest US house price indices by Case-Shiller and the FHFA, one market stood out more than any other for the dramatic way in which home prices have collapsed: Las Vegas, Nevada. According to the Case-Shiller index, house prices in ‘Sin City’ have fallen by a whopping 59%

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20

The noose tightens around Portugal

After recent cuts in GDP growth from Europe due in part to austerity, or at least the threat of it, in many of the 17 nations it wasn’t really a surprise when it was reported last night that the PMI has fallen into contraction: Europe’s manufacturing industry contracted more than initially estimated in August, adding to

5

Much bark, little bite

With somewhat slower economic growth and an increasingly clouded outlook in the global economy, I have been wondering what Chinese policy makers would really like to do amid stubbornly high inflation.  Yesterday, we had Brazil cutting rates, which baffled some analysts, but tells you that some emerging economies are worried about growth. If anyone has been hoping

11

Trading Day

The S&P/ASX 200 just closed in positive territory today, after a strong morning session. The index is up 11 points or 0.3% to 4307 points. In after hours trading, the market is slightly below 4300 points. Asian markets experienced stronger gains, following EU/US risk markets, with the Nikkei 225 closing up 1.1% at 9060 points

4

Chinese manufacturing takes a hit from abroad

The just released official manufacturing purchasing mangers index (PMI) for China shows a small rebound in August.  The headline PMI rose from 50.7 in July to 50.9 in August, just slightly below market expectation of 51.1. The new orders index was flat at 51.1, and output rose from 52.1 to 52.3.  Raw materials inventory rose from

117

Will rates work again?

  I note today that Australia’s favourite bullhawk, Chris Joye, has claimed that if: …the RBA starts cutting rates, I would be bullish on housing. Unlike almost any other housing market in the world, Australia is unique insofar around 90% of all mortgage debt is purely adjustable-rate and priced off the RBA’s target cash rate

1

European soap

Overnight we saw more politico-speak over the the ongoing Greek collateral squabbling. We now seem to be in a new phase where all those involved claim that there will be a resolution even though their very obviously isn’t one yet: Euro zone countries are discussing ways to charge fees on any collateral Greece would use to back

13

Capex boom broadens (a bit)

There’t no doubt that Australian capital investment intentions are booming. The good news is that in the latest round it was the broader economic sectors, including manufacturing that drove all of the jump  in intentions. Here is the total chart: You’re looking at the farthest bar on the right. That’s now the full year capex

7

Manufacturing recession deepens

The PMI is out today and confirms that the manufacturing recession that has been running for a year is deepening. The Australian Industry Group (AIG) describes conditions thus: Conditions in the manufacturing sector deteriorated further in August with the seasonally adjusted Australian Industry Group-PwC Australian PMI® down a slight 0.1 points to 43.3. It remains

11

Retail hangs in

Retail sales for July are out and beat estimates, rising 0.5% in July against expectations of a 0.3% rise: Sales Ex-Food was only up 0.3%, as food rose 0.8%, and is now actually down 0.5% over the past 12 months: Of the other components, Household goods were flat, Department stores were up 1.2%, Cafés and

3

Churning and burning Europe

It is interesting to compare brokers’ assessments of the European stalemate with the posts and comments on MB. After all, it is the markets that decide whether Europe is salvageable; if they deem that it is, it is. If they deem it is not, then it will probably not be. In that sense we are

18

Chart of the Day: A history of tax

After yesterday’s interesting discussion, I thought I’d bring up another taxing (sic) chart today: The first chart shows the composition of state and Federal government tax of GDP. Startingly, at Federation, tax was only 5% of total GDP (in unrelated historical fact updates, at that time, Australia was also the wealthiest nation on the planet,

10

Pulling a rabbit out of a hat

Last night several more Fed boffins were on the hustings giving dovish speeches. The first is Dennis Lockhart. Here is the executive summary: While acknowledging that downside risks to the recovery have increased, Lockhart expects a modest cyclical recovery to proceed. In his view, a number of necessary structural adjustments are holding back economic growth in

98

Our economy is fundamentally broken

Everyday at MacroBusiness we endeavor to cover a wide range of topics about the Australian economy that are either unreported or misrepresented by the mainstream media. One of the major themes since we began, just 7.5 months ago (I know, it does seem longer), has been the changing face of the Australian economy as private sector credit

5

Hong Kong money supply

The Hong Kong Monetary Authority published its monetary statistics for July yesterday. Hong Kong dollar M1 money supply increased by 3.6% in July on a non-seasonally adjusted basis compared to June after a 3.7% drop in June.  On a seasonally adjusted basis, Hong Kong dollar M1 money supply rose by 4.2% in July.  Hong Kong dollar M2 money

11

Preventing housing bubbles

Over the past week, the two main US house price data providers – Case-Shiller and the FHFA – released their second quarter indices. And once again, they provide a sobering insight into the carnage caused when housing bubbles burst violently. The national series are shown below, both in nominal and real terms. According to the

3

Trading Day

The S&P/ASX 200 closed in positive territory today, with strong bids before the close after a mixed session in the morning. The index is up 27 points or 0.6% to 4296 points. In after hours trading, the market is slightly above 4300 points. Asian markets experienced similar gains, with the Nikkei 225 closing steady at

6

EU marks to fantasy

Well I guess I shouldn’t be too surprised by this news given that it has been quite obvious for many months that the European banking system is in a far worse state than anyone has been saying. But the following is a bit embarrassing for Mr Trichet who only yesterday stated that “There is no

51

Gittins!, Pascoe dance on manufacturing’s grave

Nobody enrages me like Gittins! Not even Pascoe. Sadly for me, the two Fairfax commentators today engage in an awful double-act of cavorting on manufacturing’s grave. Let’s begin with Gittins!: And the fact is that, throughout most of the 20th century, we diverted a fair bit of our income from agriculture and mining to subsidising our

21

RPData August analysis

As noted earlier by Data Sword, the latest RPData index was out today and as usual he has done an excellent job in the analysis. The press release is also out (available below) and as usual I like to provide a bit of analysis outside the data. The results certainly shouldn’t come as a surprise

49

Mining is making us lazy

Well…forgive the headline. Mining making us less “productive” would be more accurate. I’ve certainly been less than nimble in bringing to your attention a new study by the Australia Institute into Australian productivity. It was released six days ago but better late than never. And what a fascinating study it is. Explosive even: The recent debate

3

Chinese bank arrears rise

Caixin has a good summary for 14 of the Chinese banks which have recently reported their first half results. According to the report, overdue loans have increased 6.35% at the end of the first half compared with the end of last year.  Out of 14 banks, only 3 banks did not report rising overdue loans, and

21

Disleveraging continues

The RBA credit aggregates for July are out this morning and it’s a mixed picture with a small uptick in business lending, falling growth in mortgage credit and outright falls in personal credit: Total credit growth is completely stalled: And credit for housing has hit a new Y/Y growth low: Both investors and owner-occupiers are

128

Housing falls accelerate

It will come as no surprise to regular MB readers that Australian house prices continued to slide in July, according to the latest RP Data-Rismark house price index. On a seasonally adjusted basis prices fell 0.6% in July while the 0.2% June decline was revised lower to show a fall of 0.4%: The raw figures

53

Chart of the Day: Taxes are all wrong

There is nothing more certain in life than death and taxes: today’s chart will focus on the latter. I consider taxation reform as the “only hope” for future productivity/microeconomic enhancements (as we’ve botched the macro as highlighted by House and Holes (and others here) regarding the MRRT and SWF), and these two charts, taken from

5

The Fed is boxed in

So, yesterday’s and today’s US data has come in mixed. So far, markets have twisted the results to the upside. On Monday, Personal Income and Outlays for July came in above expectations at 0.8 in July, and real PCE increased 0.5% as the price index 0.4 percent. Pending Home Sales Index came in below expectations with a 1.3

108

How the RBA undervalued housing

Remember this chart? It is taken from page 15 of the RBA Research Discussion Paper: Asset Prices, Credit Growth, Monetary and Other Policies: An Australian Case Study, released in September 2010. As you can see, the RBA chart shows a nationwide dwelling price-to-income ratio of around 4.5. Senior RBA officials have quoted this ratio in

0

Trading Day

The S&P/ASX 200 closed steady today, up only 6 points or 0.1% to 4269 after rallying in the morning to over 4300 points. Asian markets experienced more positive gains, with the Nikkei 225 closing 1.1% higher at 8953 points on the back of bad employment and retail sales numbers whilst the Hang Seng closed up

5

European schisms

As I noted recently the new IMF chief is having a bit of trouble communicating exactly what her strategy is for Europe. Last night we saw her struggling again: A fresh round of capitalisation for European banks was firmly ruled out by EU officials and bankers when they appeared before an emergency meeting of the

56

The average household is getting poorer

Those who support Australia’s exorbitant house prices and new economic model of Quarry Australia usually rationalise that support with figures showing that household income growth is strong and widespread. Well, no longer. The ABS has just released its biannual Household Income and Income Distribution report and the results are a shock. From the report, the 2007/08