Shark bait: Has Mr Abbott gone swimming with some chops around his ankles?

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Yep – Abbott is swimming out past the breakers on a WA beach with a string of chops tied around his ankles.

Malcolm and Julie are waving from the sand, offering their full support and urging him to swim faster

String of chops? – this seems a pretty good approximation.

https://ipa.org.au/publications/2080/be-like-gough-75-radical-ideas-to-transform-australia

Not all of them are bad but the strong flavour of most lingers in the surf.

Australia: The lucky ‘CAD’ country?

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The fun will really start when people start to realise that our cheap mortgage rates have been facilitated by off shore lenders believing the same horse poop about China as our local lords and masters.

With a currency on the slide as the terms of trade message sinks in we are about to find what running a continuous CAD is all about. Continue reading

Is there already enough housing supply? Not on your nelly.

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There is always the risk that if ponzi-nomics generates a speculative construction rush that actually generates a temporary over supply (which will soon be soaked up by migration) that meaningful reform of a dysfunctional market for land and housing will not happen.

A couple of things to keep in mind. Continue reading

Bill Evan’s Tea Leaves – RBA Feb Meeting

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Well that was entirely predictable.

A bank economist notes that while inflation is under control the Central Bank has no excuse not to further goose the demand for top quality debt merchant product with even juicier bait rates.

Of course no mention of the fact that the reason the economy outside mining has been verging on a coma for the last few years is that the household sector are gagging on the IOUs they sold the debt merchants over the last 17 years.

Nope, no mention of that at all. Continue reading

Yanis Varoufakis: It is a thing!

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While not wishing to disturb the atmosphere, that interview between Philip Adams and Yanis Varoufakis on late night live was quite interesting.

In particular his self description as a libertarian marxist albeit somewhat tongue in cheek. Continue reading

How shaky is China?

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That linked Michael Pettis interview is very good.

http://tablet.fuw.ch/article/china-has-two-more-years-left-to-adjust/

What happens in China depends on the willingness of the current ‘winners’ to accept more winnings going to the current ‘losers’.

Historically most countries find this is a stumbling block as the winners prefer to wreck the joint than allow lazy leaner ‘losers’ a leg up.

Hope China are not hoping that Australia will provide them with a roadmap.

Mr Abbott’s team seem very keen to maximise opportunities for ‘winners’ to keep on winning rather than create conditions for more winning by all.

Record low interest rates are never normal

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US interest rates have been for so low for so long that most people seem to just think they are normal and not the sign of fundamental problems that remain unresolved.

Its like John Travolta feeling relieved after jabbing 20 doses of adrenalin in Urma Thurman and the response produced is a flickering eye-lash. Continue reading

Can free money motivate people?

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“…Looks like free money AND zero interest rate is not a real motivator in long run…”

Oh it is still a real motivator. In fact an awesome motivator.

But only to the well placed insiders with access to credit, green lights to secure large, mostly public assets, and the protection of the public balance sheet if their bets go wrong.

The problem is that the process of acquiring control of assets with cheap money does not generate many jobs or drive broad based economic activity.

Did someone just say FIRE!

Can housing construction solve the rising unemployment

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The catch with housing construction as an employment solution is that if it actually works it will put enormous pressure on the monetary policy debt machine model as house prices soften under the increased supply.

The idea that the extra housing supply can be soaked up by house hungry migrants is wishful thinking as those migrants will come looking for jobs.

We cant all get jobs building houses. Continue reading

Deflation in Europe on the menu?

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Yes – Mr Pananikos sounds like your typical technocratic euro-phile – throw everyone under the bus (except the banking and brussells crowd) to keep the technocratic dream alive.

If the Brussell sprouts are that keen on keeping the show on the road they need to accept that bad lending decisions have a price – which is not getting repaid.

Merkel should be telling German voters that Continue reading