RBA guides CFR towards house price crash

The RBA is at it again at the Council of Financial Regulators which met yesterday: At its meeting on 15 March 2019, the Council of Financial Regulators (the Council) discussed systemic risks facing the Australian financial system, regulatory issues and developments relevant to its members. The main topics discussed included the following: Financing conditions and

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Peter McDonald attacks Coalition’s tiny immigration cut

By Leith van Onselen MB has gone to great lengths highlighting the many contradictions of vocal mass immigration booster, Professor Peter McDonald (for example here and here). As expected, McDonald has attacked Prime Minister Scott Morrison’s tiny cut to Australia’s permanent migrant intake to 160,000. Let’s examine his arguments. Professor Peter McDonald, told The New


Government to offer $15,000 scholarships for international students

By Leith van Onselen Bizarrely, Australia’s so-called third biggest export industry, education, will reportedly soon begin receiving taxpayer subsidies. From The Australian: International students, who now number more than 500,000, would be offered an extra year of temporary residency in Australia if they study in regional institutions and $15,000 scholarships would be offered to up


Desperate Morrison joins ‘trains to nowhere’ rush

By Leith van Onselen Languishing in the polls and under attack over the federal government’s mass immigration ‘Big Australia’ policy, the Coalition is planning to announce several fast rail projects in next month’s Federal Budget. Here’s AAP: Fast rail projects connecting Melbourne, Sydney and Brisbane could receive a boost in the upcoming federal budget. The


PBO: Melbourne motorists fleeced by Westgate Tunnel

By Leith van Onselen In late 2017, the Victorian Labor Government completed a shady $6.7 billion deal with Transurban to build the West Gate Tunnel Project, which will see Transurban contribute $4.4 billion towards the cost in exchange motorists paying $15 billion in additional tolls on CityLink until 2045. Former Premier Jeff Kennett described the


Is Australian property the next Ireland?

Via News: Australia could be the “first domino to fall” in a global economic crisis for the first time in its 200-year history. That’s according to economist John Adams, Digital Finance Analytics founder Martin North and Irish financial adviser Eddie Hobbs, who argue Australia’s economy is looking increasingly similar to Ireland’s prior to the 2007


Trade doubts sink Australian dollar

DXY was weak last night as EUR and CNY firmed: AUD was nonetheless down the board: Gold was firm: Oil stable: Metals lifted: So did miners, expect BHP and RIO which fell on Vale’s good news: EM stocks are poised for breakout on dovish Fed: EM junk is already there: Treasuries and bunds fell: Stocks


Kernel of lunacy: RBA stokes inflation panic

Yes, it’s inflation and, like some creature from the black lagoon, it is emerging from booming wages, via the AFR: Reserve Bank assistant governor Chris Kent says bond markets are underestimating the risk of wages growth stoking higher inflation, as long-term Australian bond rates fall towards historically low levels. …”What we have had here is


Dan Andrews turns infrastructure blowtorch back on ScoMo

By Leith van Onselen Shortly after Prime Minister Scott Morrison announced a small cut in Australia’s non-humanitarian permanent migrant cap to 160,000 (from 190,000), Victoria’s Premier Daniel Andrews has called for the federal government to cough-up billions of dollars in additional funding to assist the states in coping with unrelenting immigration-driven population growth. From The


Charting Australia’s housing deflation

By Leith van Onselen The ABS yesterday released its property price data for the December quarter, which valued Australia’s dwelling stock owned by households at $6.38 trillion, whereas the total housing stock was valued at a record $6.68 trillion. As shown below, the total value of Australia’s dwelling stock owned by households was 7.16 times


Mad Macquarie kills Bank of Mum and Dad

Via the AFR: Macquarie Bank is axing popular “Bank of Mum and Dad” financing and borrowing for self-managed super fund investment property as it continues to overhaul its residential property operations. The bank, which recently announced it was no longer underwriting new “home-branded” loans for several household-name lenders, stopped offering family loan guarantees on Monday


Gas cartel rorts ACCC

The ACCC was out with its LNG net-back price yesterday: It’s calculations for net back are higher than mine largely because of this: For a given measure of Gladstone FOB prices in A$/GJ, the next step in the calculation of netback prices is to deduct LNG plant costs. For this, the ACCC has used estimates


Links 20 March 2019

Global Macro / Markets / Investing: Turns Out That Trillion-Dollar Bailout Was, in Fact, Real – Rolling Stone Wall Street’s Latest Love Affair With Risky Repackaged Debt – NY Times Tesla is asking employees to volunteer and help deliver 30,000 cars before the end of the quarter – Business Insider At Hedge Fund That Owns


Macro Afternoon

A generally poor session across stock markets here in Asia with a run to Yen not helping while the Aussie dollar remains elevated, pumping the brakes on any advance on the ASX200. The Shanghai Composite is having a breather, after yesterdays 2% pop, currently down about 0.2% to 3091 points but still looking strong. The


Westpac: RBA on track to cut

Via Bill Evans at Westpac: The Minutes of the March Reserve Bank Board meeting emphasise the Board’s uncertainty around the slowdown in output data while labour market data remains robust. In the final paragraph of the section on the policy outlook, the Board noted “they assessed that it would be appropriate to hold the cash


Australian cities crash down global cost of living index

Via The Economist Intelligence Unit: The Economist Intelligence Unit (The EIU) today launches the latest findings of its Worldwide Cost of Living Survey. Here are the findings for Australasia. Weaker local currencies have pushed all five Australian and two New Zealand cities surveyed down in the ranking. While Asian cities have largely risen in cost-of-living terms, many


Rise of the secondary job

Some nice work from Greg Jericho: 2018 saw a surge in people working in secondary jobs that has led to the first time there being more than one million people working multiple jobs. The surge was most pronounced in the last half of 2018 where 30% of the new jobs created were going to those


ABS: Property prices dived 2.4% in Q4

By Leith van Onselen The ABS has released its property price index – incorporating both detached houses and units – which registered another 2.4% decline in home values nationally over the December quarter and a 5.1% decline over the year: Sydney (-3.7%), Melbourne (-2.4%), Brisbane (-1.1%), Perth (-1.0%), Darwin (-0.6%), and Canberra (-0.2%) recorded quarterly


ACOSS: Raise dole to match minimum wage increase

By Leith van Onselen The Australian Council of Social Service (ACOSS) has called for any increase in the minimum wage to be matched with an increase in Newstart. From News.com.au: Council chief executive Cassandra Goldie said the existing daily rate of the unemployment payment was equivalent to just two hours of work at the minimum


BCG: Rapid population growth driving up congestion

By Leith van Onselen International consultancy firm, Boston Consulting Group (BCG), has released a new report examining transport in the Australasian region’s major cities and has found that rapid population growth (driven by immigration) is having a deleterious impact on travel times: Cities in Australia and New Zealand are growing and changing at a significant


Retailers demand real cut to minimum wage

By Leith van Onselen Master Grocers Australia (MGA) have demanded a 1.2% minimum wage increase, which would result in real pay cuts for low-paid workers if endorsed by the Fair Work Commission (FWC). From The Australian: Master Grocers Australia, whose members include Cellarbrations, Bottle O and Duncans, said it was not economically feasible for the