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Huge migrant wage theft uncovered in SA

Via the ABC: South Australia’s largest private employer, convenience store chain OTR, has been accused of wage theft that could amount to $70 million in underpayments to thousands of employees. A class action on behalf of 1,050 workers against Shahin Enterprises, owner of the chain also known as On The Run, has been lodged with

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Inside Australia’s jobs bloodbath

As summarised earlier, the Australian Bureau of Statistics (ABS) today released its labour force report for April, which registered an unprecedented 594,300 decrease in total employment but only a 1% rise in the headline unemployment rate (from 5.5% to 6.2%) due to a collapse in the participation rate: Again, total employment collapsed by a seasonally

0

UBS: Banks need much more capital

Via the excellent Jonathon Mott at UBS: Results were all about the Balance Sheet. P&L takes the back-seat 1H20 reporting season was disappointing, in our view. Although sector NPAT fell 45%, the focus was on capital and provisioning build as the banks prepare for a recession. COVID-19 overlays were at the lower end of expectations,

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Dan’s West Gate Tunnel in tatters

Earlier this month, the Victorian government advised that the $6.7 billion West Gate Tunnel project would not be completed in 2022 as originally intended, instead pushing the project back to 2023 over a dispute around the disposal of contaminated soil, Hundreds of workers on the project are now facing the sack amid landfill cost increases:

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Has the Fed killed negative interest rates?

Via the excellent Damien Boey at Credit Suisse: Fed Chair Powell guides negatively. In an ad hoc speech, Fed Chair Powell said that the economy faces unprecedented risks from COVID-19 if fiscal and monetary policy makers do not step up to the challenge. He suggested that the recovery could take time to gather momentum, and that the present liquidity

14

Mass immigration and globalisation are not the same

Big Australia booster, Jessica Irvine, has penned another strawman article to attack calls to lower Australia’s immigration intake back to historical norms: Already we hear voices calling for caps on migration and reinstating domestic industries. It’s up to politicians to remind us why we should not give in to fear-mongering and turn inwards as a

5

Previewing Aussie jobs

Thanks to Westpac: Change in total employment: March +5.9k, WBC f/c: –450k, Mkt f/c: -550k Range: –125k to –1,000k The timing of the labour force survey – covering the first two weeks of the month – meant the March update did not capture the impact of broad based lockdowns implemented late in the month. That

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Tepper: It’s a tech bubble

Via the AFR: Appaloosa Management’s David Tepper sounded a strong note of pessimism on the state of the stock market, calling it the most overvalued ever outside of the bubble of 1999. Valuations on some individual stocks on the Nasdaq are “nuts,” Tepper told CNBC on Wednesday. “People have to be very careful about some

11

CBA: Mortgage volumes holding up

From Banking Day: Weekly application volumes trended lower over March, April and May “relative to the peak volumes experienced in February,” Commonwealth Bank said in a trading update yesterday. On the other hand the bank said “application volumes remain strong and are around 10 per cent higher than the same period last year,” perhaps confounding

4

New home sales collapse

From The HIA: “New home sales have fallen by 22.8 per cent since the introduction on COVID-19 restrictions,” stated HIA’s Chief Economist, Tim Reardon. “In March, new home sales fell to their lowest level on record and they fell further in April. “In parallel, the number of cancellations of projects now exceeds 30 per cent

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WHO: Coronavirus here forever now

Thanks, Xi Jinping: The coronavirus that causes COVID-19 could become endemic like HIV, the World Health Organization said on Wednesday, warning against any attempt to predict how long it would keep circulating and calling for a “massive effort” to counter it. “It is important to put this on the table: this virus may become just

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Macro Morning

  By Chris Becker  Another sour night on overseas markets with Federal Reserve Chair Powell giving a reality check on the economic impact of COVID-19, causing a selloff across Wall Street as Chinese/US relations also took a dive. Currencies also bore the brunt of the volatility, although gold stayed true and fair to remain above

1

Daily iron ore price update (strong)

Iron ore prices for May 13, 2020: I see this latest strong price action as a combination of restocking, exaggerated by Brazil worries, and strong seasonality. The last will reverse into June but the former will last as long as the virus threatens supply. Capital Economics high-frequency indexes look better today too: The major pulse

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Australia’s broken ‘skilled’ visa system: a case study

Australia’s restaurant industry is ground zero for migrant wage theft and exploitation. This is evidenced by the Fair Work Ombudsman’s (FWO) most recent annual report, which showed a “significant increase” in wage theft, especially among migrant workers: In 2018–19, we conducted 1256 investigations into more complex or significant matters (involving vulnerable workers, serious non-compliance and/or

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Mortgage stress spreads to 1.4m Aussie households

From Martin North at Digital Finance Analytics: The latest DFA mortgage stress data, derived from our rolling household surveys reveals than an additional 100,000 households joined the cash-flow stressed in April, bringing the percentage of households to more than 38%, which equates to more than 1.4 million. The trajectory is still set to reach more

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Links 14 May 2020

Global Macro / Markets / Investing: Coronavirus Is Forcing Companies To Speed Up Automation, For Better And For Worse – Forbes How to Create a Pandemic Depression: Opening the economy too soon can backfire, badly. – NY Times Will coronavirus lead to fairer societies? Thomas Piketty explores the prospect – The Guardian The world must

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Macro Afternoon

Asian markets gapped lower and were bearish throughout the session until a surge in the afternoon saw many put in scratch sessions or mild rises. Currencies were mainly range bound with gold not showing much life but remaining above the $1700USD per ounce level. In mainland China, the Shanghai Composite is up a little over

12

RBNZ expands QE program

The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee has agreed to significantly expand the Large Scale Asset Purchase (LSAP) program potential to $60 billion from $33 billion: The Monetary Policy Committee has agreed to significantly expand the Large Scale Asset Purchase (LSAP) programme potential to $60 billion, up from the previous $33 billion

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Superannuation funds use COVID-19 to lift fees

One of the biggest knocks on Australia’s compulsory superannuation system is the exorbitant management fee structure. As noted in the Murray Financial System Inquiry, Australia’s superannuation management fees are among the very highest in the world despite having one of the biggest pools of funds under management (FUM): This defies the notion of ‘economies of

12

Foxtel stranded as consumers cut the cord

For years Foxtel has tried and failed to swim against the tide of technological change. Once the dominant monopoly provider of cable pay-TV, Foxtel’s business model has been decimated by the rise of online video-on-demand (VOD) streaming services. These online providers have provided Australian consumers with a myriad of streaming content at low prices, without

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UQ VC paid to sell out Australia

Unbelievable. Via Domain: Liberal senator James Paterson has taken aim at universities’ reliance on international students, using a speech in Parliament to reveal confidential details about the University of Queensland vice-chancellor’s pay incentives to deepen ties with China. In a late-night speech on Tuesday, Senator Paterson said a whistleblower from the university had given him

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Woke ACTU’s recovery plan fails Australian workers

The Australian Council of Trade Unions (ACTU) has released a briefing, entitled “Rebuilding jobs and our economy beyond the COVID-19 health crisis”, which contains an eight point plan to help the economy recover from COVID-19: Improve the quality and security of jobs by creating 2 million new permanent jobs and halving the number of insecure