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Manufacturing PMI recession deepens

From the AIG this morning: The latest Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI) declined by 0.7 points in March, to 47.9 points (seasonally adjusted). The Australian PMI® has signalled contraction in the manufacturing industry since November 2013 (readings below 50 points indicate contraction). This month the production sub-index of the Australian

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How to fix the public service

By Leith van Onselen Dr Don Russel, former secretary of the Department of Industry, gave an address to the ANU’s Crawford School of Public Policy last night in which he questioned the federal government’s use of the public service in decision making, as well as the timidity of departmental secretaries, who have allowed the public

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Understanding the confidence fairy

One strange claim in the economic debate that followed the financial crisis was the impact of uncertainty on the path of investment and subsequently the recovery in economic activity. Taking just one example, it was claimed here that “fiscal policy uncertainty has directly harmed the American economy by increasing the unemployment rate by 0.6%, or

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Stocks, Australian dollar roar as Yellen doves up

Stocks soared last night on decent data and Janet Yellen doving up everyone’s glasses. In data, the Chicago PMI missed but was firm at 55.9 and the Dallas Fed Index launched out of winter to 17.1. But it was Janet Yellen’s take on the labour market that sent stocks into renewed ecstasy. From Bloomie: Yellen

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Was Marx right…about America?

Cross-posted from Yves Smith at Naked Capitalism. We participated in a Room for Debate forum at the New York Times, on the topic of “Was Marx Right?” Readers are likely to say, “But of course!” Yet Marx had such a large opus and his forecasts were so bold that any fair reading has to come

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Jiang campaigns against anti-corruption campaign

From the FT: Jiang Zemin, the former Chinese president, has urged the current leadership to rein in the toughest anti-corruption campaign in decades, which is threatening the interests of some Communist party elders. Mr Jiang, who stepped down as president of China in 2003 but retained control of the military for a further two years, has sent a clear

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Shapiro enters the fight club

Yesterday I castigated the AFR’s Jonathon Shapiro for what I saw as a weakly reasoned article on US bonds. A few hay-makers were thrown in the process and last night I got as good as I’d given as Jonathon entered the MB fight club. Having punched ourselves to a standstill I apologised to Jonathon for

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Links 1 April 2014

Global Macro / Markets: Mt. Gox faced questions on handling client cash long before crisis – Reuters High-Speed Traders Rip Investors Off, Michael Lewis Says – Bloomberg In Some Ways, It’s Looking Like 1999 in the Stock Market – New York Times Real Price of Gold since 1791–2013 – Visualising Economics North America: America’s democracy

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ASX at the close

By Evan Lucas for Chris Weston, Chief Market Strategist at IG Markets ECB marching into April with easing  The dovishness, or pseudo-dovishness, of the European Central Bank (ECB) will be on display this week as a plethora of data is paraded in front of Mario Draghi for examination over the next week. Tonight the bank will

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Cormann misses the mark on asset privatisation

By Leith van Onselen Finance Minister, Mathias Cormann, has thrown his support behind the Government’s promise to provide the states with an additional 15% incentive payment if they agree to sell-off state assets and invest in productivity-enhancing infrastructure, claiming that the move would actually boost federal government revenues. From The AFR: Senator Cormann said state-owned

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The pitfalls of reverse mortgages

By Leith van Onselen The New York Times has published an interesting article on some of the pitfalls of reverse mortgages, which are exhausting inheritances across America: … a growing number of baby boomers [are] confronting a bitter inheritance: The same loans that were supposed to help their elderly parents stay in their houses are

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AFR gets US bonds all wrong

The shortcoming of “he said, she said” journalism are on display at the AFR as we speak with its lead article by Jonathon Shapiro on US bonds largely wrong: …why are bond yields still so low? Why are investors so dismissive of the threat of rising interest rates? There’s no obvious answer but there are several

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Port Hedland strike to hit iron ore?

From the AFR: An industrial dispute involving tugboat workers at Port Hedland is threatening to halt shipping of iron ore through the port, and disrupt Australia’s most lucrative export chain. The Maritime Workers Union has been unable to agree on a new workplace agreement for deckhands on the tugboats, and in recent days the union

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Investor credit growth slows

By Leith van Onselen The Reserve Bank of Australia (RBA) today released the private sector credit aggregates data for the month of February: A chart showing the long-run breakdown in the components is provided below: Personal credit growth (-0.2% MoM; 0.1% QoQ; 0.7% YoY) and business credit growth (0.4% MoM; 1.1% QoQ; 2.4% YoY) continue

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UN: Climate change broad and worsening

From the New York Times: Climate change is already having sweeping effects on every continent and throughout the world’s oceans, scientists reported Monday, and they warned that the problem is likely to grow substantially worse unless greenhouse emissions are brought under control. The report by the Intergovernmental Panel on Climate Change, a United Nations group that

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Gittins damns conflicted Murray Inquiry, self

Crikey, Ross, where has this been for the past ten years: Abbott wants to review the financial system, so he appoints a former boss of a big four bank, David Murray, who feels qualified to explain to economists where they’re going wrong. …Can you imagine how many proposals Murray’s committee will receive aimed at making

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Big banks make 84.3% of loans in February

Cross-posted from DFA blog: APRA just released their monthly banking statistics, for February 2014 which shows that of the $1,231 billion lent in the month, 84.3% of investment and owner-occupied loans were from the big four banks. CBA led the way on owner occupied loans, whereas Westpac lent the largest volume of investment loans by value.

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Monthly inflation soft, TD warns anyway

TD Securities monthly inflation is out and a moderate monthly reading of 0.2% for an annual rate of 2.7 per cent. The trimmed mean lifted by 0.1 per cent and an annual rate of 2.7 per cent. However, Annette Beacher is not happy: “Inflation pressures are clearly building up, neither due to ‘noise’ nor proof that Australia’s