Senior Economics Reporter Dow Jones/Wall Street Journal/RBA Watcher. Has covered the Australian economy for more than 35 years.
#Collingwood
#drums
#Shakespeare
A proud father moment. This in my daughter Laura in command of a pit orchestra for the first time. Chicago opens March 12 at Campbelltown’s Town Hall Theatre.
These are my daughters. One has a mortgage, another is fretting as she is close to starting, and the other just feels it’s totally hopeless. I don’t we should underestimate the societal carnage our stupid house prices are inflicting.
@DVATW
The reformation has given us more than 30,000 different Christian denominations globally. It was declared open for interpretation and this is one of them. The Christian spectrum is vast.
My neighbour was buzzed by the NSW police helicopter on Sunday. It hovered and from the loud speaker came demands for him to mask up…he was on his front lawn with his young boy. There was a 24 hr blitz on my suburb. At least they seemed serious about compliance.
#auspol
Redeveloping Rosehill for Sydney housing might look good on paper, but isn’t it just another step toward making Sydney a bland and over crowded place to live. Imagine Victorians selling off the G and the tennis complex for housing.
Within a small margin for error, interest rates have peaked in Australia. The 2Q CPI will point to some stickiness on the services side of things, and the RBA remains watchful of EBA agreements and wages more broadly. But the central case is that it is pretty much done.
#ausbiz
For the mob now bashing on the doors of the
#RBA
and demanding the head of Phil Lowe. ANZ expects the RBNZ to consider a 75 bp hike next week, adding to the 400 bps already delivered even as recent data shows inflation cooler and house prices -15%
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#ausecon
#getreal
Why is there a rush to spend billions on softening the blow of rising living costs when a large portion of the pandemic stimulus is still sitting in household savings accounts?
#ausecon
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It's a simple equation. The cash rate is at just 0.85% and CPI is forecast at 7% in 2022. The RBA is worried abut "70s-style wage price spirals." Rates are too low. Front load.
#ausecon
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#getonwithit
While wages increased 81.7% in the past 20 years, Australian home values have grown 193.1% - Corelogic. I wish well heeled baby boomer toffs would stop trying to find a silver lining in this. The debt our kids are taking on is gobsmacking.
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#ausproperty
#ausecon
Here's the problem: The
#RBA
's targeting of wages growth is fine in principle. But it is trying to do something that the government should have done years ago? Sustained higher wages growth is won from economic reform, not ultra-low rates.
#ausecon
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The RBA statement doesn't rule out a repeat 50 bps performance in coming months. 2Q CPI in late July will be as ugly as they get. August could be fun too.
#ausecon
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#RBA
Governor Phil Lowe’s calm and thoughtful articulation of policy before Parliament this week amid unprecedented hysteria should be listed as a reason to retain his services after September.
#ausecon
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If you don’t have the
#RBA
going +50bp on Tuesday you are missing the signs. The Gov’s ABC TV appearance 3 weeks to upgrade the CPI forecast was unprecedented. All except an upgrade was discussed in my column 3 hours prior.
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#ausecon
#getonwithit
Imagine being forced out of your home because the task of repaying the mortgage simply became impossible only to face things like the nightmare of the Sydney rental market, which is potentially more expensive and totally insecure for families.
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#ausecon
#ausproperty
More than 800,000 Australian households making the move from emergency low fixed rate loans to variable rates that are already in low Earth orbit. Happily living on the lunatic fringe of Sydney....I can tell you this will hurt.
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#ausecon
I can’t help feeling that the RBA needs a bigger stick. It’s over achieving on full employment and under achieving on getting inflation down. The latter threatens to do great damage still. The tightening cycle is 2 years old today. We could have done better.
#ausecon
The RBA will press on with +25bp hikes in Dec, Feb and Mar. 4Q CPI is unlikely to offer up a pause signal, but the lagged nature of inflation will be a bigger part of the guidance.
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#ausecon
Efforts to renovate the RBA in the middle of an economic crisis were always troubling. This takes it to a new level. Keep Lowe, he’s a great economist. It’s about the economy, not the review
Dutton rules out two frontrunners for RBA governor
My Mum and Dad celebrated 64 years of marriage on Tuesday. They still have a spring in their step and remain guiding lights to many. Both nearing their 90s, they've witnessed more societal change than any prior generation.
#stillsmiling
#Longevity
Debelle’s departure is a monumental blow to the
#RBA
. Easily the best candidate to be the next Governor, his handling of the GFC, which brought with it a currency collapse, is just the tip of a stunning resume. I wish him all the best. #
#ausbiz
#ausecon
CBA: An
#RBA
cash rate of 2.50%, (in‑line with current market pricing) would be deeply contractionary and would result in mortgage payments as a share of household disposable income rising to a record high (data used goes back to 1999).
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#ausecon
An
#rba
press conference might be a good thing, but I recently heard a reporter ask why the central bank was raising rates because it was pushing up costs and adding to inflation. The mob mentality we are now seeing is not reassuring either.
Congratulations to my Mum and Dad on the celebration of 65 years of marriage. After 9 children and more than 40 grand children and great grand children, both are still lively and active in the community. They are a testament to the power of forgiveness and their shared faith.
The 3Q CPI data shows higher than expected core and headline numbers, making RBA officials a little uncomfortable. But they'll remind us that 25 bps hikes each month is still a bludgeoning implement.
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#ausecon
Full disclosure. He was also on the road in front of his house. It's quiet culdesac on the very fringe of the city. His son was in a RC electric toy car. He was told to get the car off the road and put on a mask. All pretty dramatic.
The three busiest days in Lifeline’s 57-year history have been this month with the service receiving 3,436 calls on Monday, according to new data released by Lifeline Australia today.
#auspol
#reachout
#areyouokmate
#pickupthephone
This is a completely new phase of the RBA's tightening cycle fueled by data in the last month. There's nothing in Lowe's comments that suggests he's sensing a peak. Zero productivity and zealous government advocacy for big pay hikes have invoked Hiking Cycle Mk2
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The
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’s liaison is clearly still full of anecdotes from firms highlighting super strong demand conditions in the economy, and employee scarcity. +50 bps again in September.
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#ausecon
The OCD crowd who want the
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cash rate back to an even multiple of 25 bps should stop fidgeting and cease pacing the room. I don’t think there’s much interest in easing your woes.
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#ausecon
I’m heading into a 6 hour media lockup today to cover a budget that is already largely released. Maybe there will be a curve ball like plans to build three aircraft carriers and funding for a take over of New Zealand. But I doubt it.
#ausecon
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If you stare too long at the gloomy consumer confidence data and then the strong retail sales data....you must conclude that retail therapy is a genuine economic dynamic. I'm off to the shops...
RBA's Lowe turn his guns on the hawks.....it just isn't going to happen in 22, 23. Not even surging house price growth will trigger a move. Smoko until 2024.
#auspol
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Goldman Sachs now expects RBA rate hikes in August, September, October and November. The new post-budget addition is the August hike.
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#ausecon
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#ausproperty
Ethereum’s energy usage is estimated to be equivalent to the Philippines, the 35th largest economy in terms of energy consumption.
#RBA
#Crypto
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250 bps by the RBA since May is very significant. A string of +25bps stretching into next year isn't backing off. The world economy is slowing and inflation will cool in 2023.
#ausecon
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The RBA board will likely have the chat about 40 bps. Jobs and wages data didn't scream for it, but the inflation and business liaison data do. The reality is the OCR is at 0.35 bps as inflation heads to its highest in let's say 40 years.
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#ausecon
#getmoving
I’m not sure I’ve ever seen a bigger clash of wills between the RBA and markets. Coming weeks will be like bonfire night….something I wish would make a come back.
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#ausecon
#RBA
#bonfirenight
@TheKouk
This feels like the scene in the Life of Brian where the PFJ is asking what Romans “have even done for us.”
….50 year low in unemployment? The aqueduct.
Isn't there a good chance that cutting interest rates by 50 bps this year will achieve next to nothing? It's not the cost of borrowing that is the problem. It probably wouldn't even float house prices.
#RBA
#ausecon
#RBA
I’m heading off for some long service leave. I’ll be back for 4Q CPI. So it’s 25bps in December with the bank set to experience discomfort for a bit about the move back to 25 bp from 50bp. Still global growth forecasts are tumbling. I still don’t think the OCR will bust 4%.
Why swap markets are still pricing a rate cut before Christmas is strange to say the least. If it’s a bet that the RBA will respond to an artificially lowered CPI, it’s misguided. Bullock is speaking pretty clearly.
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#ausecon
I took my daughter to see the new Avatar on Monday. Counting us, there were about 8 people present. My local musical instrument store was deadly quiet too. Anecdotes only, but I think rate hikes have finally hit the consumer. She’s cute right?
Australia's Fair Work Commission will award a 4.0–4.5% nominal increase to the national minimum wage in its 2021-22 annual review, ANZ forecasts. Despite being the largest rise since 2010, it will still represent a real wage cut.
#ausecon
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The October
#RBA
board meeting is more likely to see it deliver +25 bp than +50 bp. +25 bp gets them into the neutral zone, where they'll move more cautiously. Compounding the RBA's reputational damage by introducing heightened recession risk seems unlikely
#ausecon
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Let's face it--50bp in July is coming. 25bp will be ruled out soon after the board is served their prawn cocktails at lunch, and well before the crumbed schnitty is wheeled in. By the time the frog-in-a-pond comes out, they will be done and dusted.
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#ausecon
#RBA
That growling you can all hear is probably Guy Debelle reacting to ridiculous news headlines like
#RBA
says recession over. In a purely technical sense perhaps. But in a real world sense, absolutely not. Debelle said nothing of the sort.
#auspol
#ausecon
Does anybody else get jittery before these announcements? It's not as if I'm long or short anything. I don't trade, never have. Still....everything is at stake...hahaha.
#RBA
#firstworldproblems
Annualized Aussie GDP growth is still hovering around 1%. Something closer to 3% is needed to get unemployment trending down to 4-point something. Rate cuts can't do that alone.
#ausecon
#RBA
#ausbiz
The myth of the strong economy is being exposed.
England lost the Ashes because Australia won two consecutive tests putting them in a near unbeatable position. Take responsibility for your loss and stop pointing at weather and your keeper who likes to go farming outside his crease when he shouldn’t
Chinese housing developers ran up $5 trillion of debt in a historic real-estate boom. Beijing is trying to cool things down without hurting the economy. via
@WSJ
#ausbiz
#ausecon
Ok so maybe it’s not the G. But Sydney is suffering from a lack of creative, artistic and sporting outlets. Redevelop it into Sydney’s G. Put the Swans and the giants in it. Or build a replica Globe Theatre. Acres of tiny ticky tacky boxes will curse the city for centuries.
I’m running across a lot of 20 to 25 year old who say they never want children given the enormity of the financial task. Is this new or has this group always said this?
#ausproperty
Crucially...50 bps of cuts, according to RBA modelling, only gets you to a jobless rate of about 5% in 2020.....So the likelihood of more cuts is high given that 4.5% is the expected NAIRU. There's good reason to expect that it will be lower
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#ausecon
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#auspol
At least one more major Australian bank looks set to announce downward 3Q GDP growth revisions this week. Other key voices are talking about 3Q GDP contractions as big as 4%, but aren't ready yet to go to print. Risk of recession now at 35%.
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#ausecon
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@TheKouk
Ridiculous Stephen that you should bend over backwards to sully the reputation of Lowe with a charge of political bias. Seriously?!? He may have made errors exiting the nightmare of the pandemic, but you should retract this immediately.
Merry Christmas to all. The chat here about the economy is always an important place to stop each day. 2022 is going to be a cracker. I'm back in mid January. Stay safe. May the peace of the season be with you all. QE to end in Feb. Cash rate up 1Q 2023
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Collingwood have won 8 out of their last 10 games and look likely to go deep into September. A more compelling recession indicator I’ve not seen. 2010 GFC exit; 1990 recession; stocks crash, Depression 4-peat 1927,28,29,30.
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Change is good, but there’s a good argument that Australia has tossed out the RBA board structure that helped deliver a record expansion. The savaging of Lowe suggests the new experts will face the same blow torch from a society obsessed with investor debt.
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#ausecon
This is not the end. It is not even the end of the beginning. But it is, perhaps, the end of the beginning.
Winston Churchill on Australia’s February CPI data
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Bitcoin and Ethereum's combined energy consumption is estimated to be close to the energy consumption of the world’s 13th largest economy, says
#RBA
#crypto
#ausbiz
Rating agency S&P Global has affirmed Australia’s AAA credit rating, citing Australia’s strong economic recovery from the pandemic and track record of sound economic and fiscal management.
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