Macro Business Round Up #2
The Half Weekly Round up from our Aussie Cousins – at Macro Business
- Sunday Edition -
I am trialing a twice weekly round-up of some tidbits from Macro Business Super Blog. The round-up would be posted every Wednesday and Sunday (time of day dependent on work and days off) here at VOAKL with the index also updated at the same time for more full length commentary from the respective bloggers over there. Hopefully the round-up gives some brief complimentary material to what gets reported in The NZ Business Herald and The National Business Review.
Your Sunday May 13th Round Up
Leith van Onselen on the wireless - by Unconventional Economist, a.k.a Leith van Onselen
Pipe into the podcast where Leith gives his run down of the recent Australian Budget. Well worth a listen on where Australia is heading into their 2013 Federal Elections.
Nice plant – by Houses and Holes
More commentary on the recent Australian Federal Budget, and by the way – nice plant
S&P confirms Australia has no private debt - again by Houses and Holes
A nice big piece from ratings agency Standard and Poors on the recent Australian Federal Budget:
Bulletin: Economic And Political Risks Could Undermine Australia Budget’s Fiscal Consolidation Strategy MELBOURNE (Standard & Poor’s) May 9, 2012–Standard & Poor’s Ratings Services said that the Labor government’s proposed 2013 budget will have no immediate effect on its ratings on the Commonwealth of Australia (unsolicited rating AAA/Stable/A-1+).
Hmmm where is our AAA rating?
April unemployment dives to 4.9%! – by The Prince
New Zealand unemployment goes up, Australian unemployment goes down; however can you see the catch with the Australian unemployment figures:
The April 2012 ABS Labour Force Survey was just printed at 4.9%, from 5.2% print for March. The market expected 5.3% so has been blown away. The internals are not so good with full-time jobs falling 10.5k, but part-time climbed 26k perhaps suggesting labour market churn. Also helping the rate was the participation rate falling again to 65.2%.
Found it yet? Try looking at the movement between part and full-time numbers. Wonder what is going on here folks?
Seems the EU has no money circulating around – or just money full stop to circulate and fuel the economic engines of the member states:
The May monthly bulletin from the ECB came out last night covering March data. As usual its a big document but in the context of Europe there really isn’t anything important that wasn’t already covered in the April banking survey.
The chart on page 27 pretty much tells you the story of what is happening across the Euro zone, showing clearly that the rate of credit growth in the private sector continues its downwards trend.
Do check the author’s post though, he did stumble on a surprise about economic modelling.
From Houses and Holes: It’s the student loans, stupid
Well we know the Main Stream Media are crap at reporting stuff and it is always up to the trusty blog to make up where MSM fails. So from the USA we have this:
The mainstream media has once again completely missed the reasons behind the US consumer credit growth.
CNN/Fortune: – U.S. consumers had long been known for their love of credit until the financial crisis changed everything. Credit cards and loans were suddenly out of favor as credit markets tightened and millions saddled with debt lost their homes to foreclosure.
Now the latest data have some suggesting that those days are fading. In March, U.S. consumer credit expanded by 10.2% to $2.54 trillion – the fastest pace since late 2001, according to Federal Reserve data released Monday. What’s more, February’s expansion was revised up to $9.27 billion from an initial estimate of $8.73 billion.
Check the article to see where the credit growth in the USA has been? Retraining anyone? Also NZ had a similar thing to when the GFC kicked off with an increase in enrollments to tertiary institutions.
Once more from Houses and Holes: Bulk weakness spreads
I told someone in Facebook that the good times in Australia will not last if the mining boom goes tits up like it did in 1983; needless to say the person did not believe me. Well lets hope bulk commodity prices fuelling the boom in Australia do not decide to tank real fast real soon:
Australia’s balance of trade is getting beaten up again. Two of out three bulk exports are still sliding. Iron ore 12 month swaps are accelerating downwards
Check the post for the graphs which are pointing DOWN DOWN DOWN. I do hope Australia is not relying on pray and hope right now…
All figures in the Australian housing market point in one direction – check where by reading the post at Macro Business Super Blog. Looks like negative equity and people losing out from the recent housing boom is set to continue for some time. Which reminds me, I should go look at the NZ data for a comparison – last I heard Auckland was going in full reverse to Australia.
Phat Dragon on poor Chinese data – by House and Holes
China’s cyclical downswing has been closely associated with the trajectory of the heavy industrial sector. Today’s update on May industrial production – a teeth jarring 9.3%yr versus 11.9% in March and a consensus of 12.2% – reinforces the link. There is some real sticker shock in this release – witness the 0.7%yr outcome for electricity generation, down from 7.2% in March. Why was the market forecast so bad on this occasion? Phat Dragon puts it down to three things. The first is over reliance on the PMIs as a short term forecasting tool. The second is an over eagerness to incorporate monetary easing into real economy outcomes. The third is that the majority were surprised by the degree of weakness evident in Q1, so they declared it must be the trough. That means sequential improvement in IP April over March was essential to hold the ‘new view’ together. Alas, there is no doppelganger in the tongue of Confucius for epikhairekakia (or schadenfreude for that matter).
And now you know why Bulk Commodity Prices are beginning to fall out in Australia. If China does lose control and goes in for hard or crash landing – well you can go figure the rest out. In short – it’s going to hurt – even NEW ZEALAND!
By the way I think Houses and Holes is not looking for vindication from all the nay-sayers if China does come down hard. Because if he does get that vindication after warning everyone for months of not years – well the GFC is going to look piddly compared to the world’s second biggest economy and main holder of Western Debt going off the backend.
Seems China is trying to engineer a slow down and a soft(ish) landing:
From MineBot 2.0: Well on one hand if they are trying to engineer a slowdown why should we be surprised that data shows a slowdown? On the other hand the data is probably dropping sharper than you’d want if you were an omnipotent central planner.
The electricity is interesting. A few months ago this bloke was touting rumours that electricity usage at that time had dropped sharply. We can see from his chart that this never happened. My point at the time was to stick with data and not trade in rumours. So now we have data for the most recent month and it looks the most telling of the stuff in the article. However it would be nice to see plots of the monthly data in addition to the YOY derivative plots so as to add some more clarity — and I don’t mean just for this chart I mean for all charts from all pundits who only show YOY.
Collapsniks will be gleeful. Lets wait and see. The numbers probably explain the $10 drop in iron ore.
And that is the Round Up for Sunday 13th of May
Hope Mother’s Day was well and that you all treated your mothers to something special.
The Macro Business Round Up will be back Wednesday with more snippets from Australia and around the world.
Lets hope for some better figures and news here folks – for everyone’s sakes!