Latest posts

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Corrupted universities demand another $1b from federal government

Late last year, the Morrison Government announced that it would give Australia’s universities an additional $1 billion of research funding, taking total federal spending on research for 2021 to $3 billion. Under the plan, Melbourne University will receive an additional $111 million in research funding, while the University of New South Wales and Monash University

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Can Victoria be trusted on quarantine?

It is hard to deny that the Victorian Government has failed in managing its hotel quarantine program. Victoria’s deadly second wave in mid-2020 was seeded when untrained private security guards leaked virus into the community, resulting in Melbourne being locked down for 16 consecutive weeks and around 800 deaths. Victoria has only today emerged from

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Macro Morning

Strong economic data from the US is haranguing risk sentiment with the USD strengthening once more on the presumption that the easing may ease off sooner than expected. Retail sales and industrial production all outshone predictions, sending Wall Street down slightly while boosting commodities and a keeping US Treasury yields elevated at year highs. Bitcoin

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Scott Morrison is unfit to govern

The lack of outrage over the new low set this week in our politics is shocking. At The Australian the silence is deafening. It actually has the gall to lead with this today: Labor is as bad as the Coalition right now, is it? At Nine, where Peter Costello is chairman, and where centrist journalism

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Net overseas migration swings sharply into negative

Yesterday, the Australian Bureau of Statistics (ABS) released Overseas Arrivals and Departures data for December, which confirmed that net migration into Australia has swung sharply negative. Australia has lost nearly 19,000 net permanent & long-term arrivals since the pandemic hit in March 2020 – the first time net arrivals have been negative since the data

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Links 18 February 2021

Global Macro / Markets / Investing: Luxury Car Brand Jaguar To Go All-Electric By 2025 – The Techee Japanese Stock Market at its highest level in 30 years – Guardian Mag Nissan shot down Apple deal to avoid becoming Foxconn of cars – Ars Technica Buffett’s Berkshire reveals big stakes in Verizon, Chevron – Reuters

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Macro Afternoon

Asian stock markets are somewhat mixed given the stumble on Wall Streets return from a long weekend overnight, with overextended Japanese stocks falling back the most as expected while mainland Chinese risk markets remained closed for NY holidays. Bitcoin has again briefly touched the magical $50K level, as is trails ever higher ready for a

16

Wolf warrior: Australia must abandon “ideology” to get along

Following last year’s 14 conditions to end democracy if we want to get along with China, The Australian reports today that China’s Victorian consul-general Long Zhou is out to remind us that there is coming back without that: “Australia should treat China and China’s development objectively and rationally, abandon ideological prejudices, and truly uphold the

1

ACCC: ScoMo Gas Unplan to deliver supply shortage, price spike

Here’s the ACCC take on the Morrison Gas Unplan: Gas prices fell significantly during the past year, driven in part by the COVID-19 pandemic. While lower gas prices are providing some relief to manufacturers and other gas users on Australia’s east coast, prices were still higher than export parity, the ACCC’s latest gas report reveals. The report,

4

Pilbara rents go boom, bust, boom

The Pilbara mining region of Western Australia is arguably the most volatile property market in Australia, experiencing massive booms and busts as the iron ore market rises and falls. After commodity prices collapsed in 2012: Asking rents for houses in Karratha fell by around 70% peak-to-trough, from around $1500 a week in late 2012 to

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Coalition MPs dump superannuation fuel on housing bonfire

Victorian Coalition MP, Tim Wilson, has launched a “Home First Super Second” campaign, which is calling for first home buyers (FHBs) to be permitted to access their funds for a housing deposit before being required to save it as superannuation: Young Australians are struggling to save enough for a first home deposit. They have savings

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CBA: Housing boom “not particularly helpful for economy”

CBA’s head of Australian economics, Gareth Aird, has given a terrific interview (below) on Radio 2GB discussing the Australian property market. The discussion is centered around a report released earlier this week where Gareth Aird tipped strong house price growth over the next two years on the back of rock bottom interest rates. For mine,

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Global fundies spooked by inflation

ZH has a great summary of the BofA fundie monthly: Below we present some of the highlights from the latest FMS, which finds that a record number of investors are taking “higher-than-normal” risk, up to 25% in February the highest on record… … for the following reasons: Net 91% of investors now see a stronger economy

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RBA: Aussie bank offshore borrowing has collapsed

Fresh from the central bank: Christopher Kent, Assistant Governor (Financial Markets) Introduction Today I will discuss some recent developments in the foreign exchange market, and provide some views on the role of the Reserve Bank’s various policy measures. I will also briefly discuss a modest change to the way the Bank will be using foreign

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Glasenberg: Pilbara killer is go

The recent Chinese trade war on itself via Australia has contributed to tremendous rises in the iron ore price. If it needed any further convincing, this has tipped the scale for the CCP’s long-held dream of creating a substantial African iron ore alternative.Departing Glencore chief executive Ivan Glasenberg, who knows a thing or two about

19

Agents demand permanent residency for international students

Mark Lucas, the chairman of the peak lobby for education agents working in Australia called the International Students Education Agents Association (ISEAA), has called on the Morrison Government to “reinstate the link between international students and immigration” to reinvigorate the edu-migration industry. “Australia can’t survive without migration. Our birth rate is getting to below replacement

1

Australian leading index still strong

Via Westpac: The growth rate of the Index continues to point to above trend growth in the Australian economy through 2021. In its February Statement on Monetary Policy the Reserve Bank forecast growth of 3.5% for 2021, almost in line with the Westpac forecast of 4%. With population growth forecast to slow to 0.2% in

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Skilled vacancies rebound eases

Via LMIP: Annual Change • In seasonally adjusted terms, the IVI increased by 11.1% (or 17,500 job advertisements) over the year to January 2021. • Job advertisements increased in six of the eight broad occupational groups over the year. The strongest gains were recorded for Labourers, up by 50.7% (or 4,800 job advertisements). The 14,200

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Adam Creighton is right!

Last year I created a bit of a stir when I declared that The Australian’s Adam Creighton was “pyscho“: It was clear that Victoria did NOT have the wherewithal to succeed with contract tracing and testing when the second wave hit. That’s why there was a second wave! The only mistake VIC made in that

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How big is the fiscal cliff now?

Mid last year, many economists (including us) were concerned about the ‘fiscal cliff’ facing the Australian economy once various coronavirus stimulus support payments were pulled-back. Over $154 billion has been paid out to households so far, including $81 billion in JobKeeper payments, $18.7 billion from the JobSeeker Coronavirus Supplement and $35.9 billion in early superannuation

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What happened at Fortescue?

Yesterday we got a little shock from Fortescue. It came in the form of the resignation of three key executives associated with its Iron Bridge expansion: OK then. Not much to add. I can only observe that the focus on culture and behaviour seems a little out of step with the cost overrun crisis. There

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Macro Morning

Wall Street returned from its most ironoic holiday over night and stumbled, pulling back European stocks and potentially upsetting the groove that started in Asian equities at the start of the trading week.  The USD came back against the majors with the Aussie dropping alongside gold while US Treasury yields rose again with the 10

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China rare earths ban the stuff of nightmares

The FT ran a story last night to stoke a bit of fear. China is apparently ruminating about banning rare-earth commodities for export: China is exploring whether it can hurt US defence contractors by limiting the export of rare earth minerals that are crucial for the manufacture of F-35 fighter jets and other sophisticated weaponry,