Federal Treasury, Head of Global Strategy TD London, Advisor to a PM, punter. Speaker. MD Market Economics.
Joined May 2009
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My 2026 forecasts:
GDP H1 lifts to 2.5%; sub 2.0% in H2
Unemployment rate to 5%
Inflation eases 2.0 to 2.25%
Wages growth soggy at 3%
RBA cuts to 3.10%
10 yr bonds 4.00%
AUD lifts to 75 c
House prices – no change, downside risks
ASX200 – below 8,000
youtube.com/watch?v=u6007K2J…
Household wealth fell by another $4.5 billion today; $140 billion over the past month; down $1.25 trillion since March
The fall in house prices is on the cusp of being a major economic problem
My post from earlier today
Falling house prices are a big deal.
I'm as nervous as a cat in a room full of rocking chairs.
Household Wealth is falling by around $4.5 billion a day, day in day out.
That’s bad news for the economy.
You can't put a positive spin on it except that it means that a significant deflationary pulse will soon hit the economy making the inflation rate returning to target in 2027 a near certainty.
youtube.com/watch?v=MrPnzpM1…
Those nasty facts!
For the 4 Chalmers budgets, the cumulate balance is a surplus of $6 billion. The 2 surpluses were bigger than the 2 deficits.
Just saying.
Falling house prices are a big deal.
I'm as nervous as a cat in a room full of rocking chairs.
Household Wealth is falling by around $4.5 billion a day, day in day out.
That’s bad news for the economy.
You can't put a positive spin on it except that it means that a significant deflationary pulse will soon hit the economy making the inflation rate returning to target in 2027 a near certainty.
youtube.com/watch?v=MrPnzpM1…
ICYMI
A big 5 days for ahead for the economy
The next 5 days - it's all inflation & interest rates.
The week kicks off with oil at US$117 a barrel.
Wednesday see the Sept month & Sept qtr CPI.
Petrol, tobacco & an unwind of 2025 electricity rebates look like contributing 1.25ppts of the 4.0% inflation rate & the RBA has zero influence on these issues.
Senior RBA officials appear before a Senate Committee, so watch for hawkishness & a sad to see downplaying of rising unemployment & business failures.
youtube.com/watch?v=0QVUltQG…
The funny thing is the US budget deficit is bigger than in France, US bond yields are the same, the US$ has shat itself this year and the level of govt debt in France is 10% of GDP lower than in the US. I understand how it ends
The next 5 days - it's all inflation & interest rates.
The week kicks off with oil at US$117 a barrel.
Wednesday see the Sept month & Sept qtr CPI.
Petrol, tobacco & an unwind of 2025 electricity rebates look like contributing 1.25ppts of the 4.0% inflation rate & the RBA has zero influence on these issues.
Senior RBA officials appear before a Senate Committee, so watch for hawkishness & a sad to see downplaying of rising unemployment & business failures.
youtube.com/watch?v=0QVUltQG…
Median wealth per capita, US$
France $122,000
US $69,000
The avg French person has nearly double the wealth of the avg American. So much for socialism / capitalism
Chris posting from the One Nation play book
visualcapitalist.com/ranked-…
Yep - there are clowns in Australia who want to cut the excise by 75 or 80% - in a ridiculous price war between the govt and smugglers!
Tobacco taxes work — even when they give smugglers a windfall ft.trib.al/nSDrg2x | opinion
Looks like house prices will be down about 1% in October; fall from peak will be around 6.5 / 7% (maybe revisions?)
That's $1 trillion is lost household wealth which shows household spending will be skewed down by 0.5% in real terms in the next year from the current trajectory.
The drover's dog can see that domestic inflation pressures are closer to zero than 3%
Yes - It is on the cusp of being an issue that spells great danger for the macroeconomy. It is putting a massive deflationary pulse into the economy, risks of loan arrears and defaults are increasing.
The weird thing is that the RBA cant see it
A Saturday Morning Omnibus.
Oil US$117 a barrel (Brent) - going from bad to worse to the dog house.
Stories that the RBA is frustrated at the persistence of inflation. No shit Sherlock.
Well, some of us are frustrated with the RBAs head in the sand ‘analysis'.
House prices keep falling.
Victoria state election betting.
A few tips for Flemington, Randwick and Morphettville.
youtube.com/watch?v=cttbd14_…
This is big news.
Thankfully Australia with a AAA rating reflects prudent economic management & is something to cherish
After markets close this weekend Moody's are likely to downgrade France's credit rating from AA3 to AA1. If France is downgraded by Moody’s, this would not affect the EU’s rating but would result in a downgrade of EFSF to Aa1. In addition, French agencies rated by Moody’s would also be downgraded in line with the sovereign. OATs dislocated further from EGB peers overnight; 10y France v Germany +14bp to 174bp, 10y France v Italy +5bp to 47bp. The French 10y yield rose 6bps to 5.07%. OAT futs are down in APAC trading. base:0x832bcced5bd431b31663576490344ea1c0bea295 #France
Australia's govt debt non-crisis. A fuss about peanuts.
Gross govt debt was steady this week at $994.9 billion.
It has been at or around this level for the best part of a year with the trivial budget deficit keeping debt levels on a very gradual glide path higher.
Next week, the govt will borrow just $4.0 billion of bonds & T-Notes – there are no maturities which means next Friday gross debt will be $998.9 billion.
There is lots to cheer in these numbers & nothing to be frightened of.
Boo!
youtube.com/watch?v=T3lDCi_d…
That is very bad news.
The ABC has such a low priority on economics & markets that a small team is left to carry the can on the most important issue for society - the economy.
Shows like Insiders rarely mention economic issues, let alone debate them. So too podcasts like Politics Now where we know more about the presenters children's thoughts on politics than analysis of what is happening in the economy.
The ABC funds juvenile shows like Planet America as part of its saturation coverage of things in the US.
Listen to the ABC news - more likely to cover a storm in US mid-west than details of the Australian labour market. Or a random shooter in some wretched town down south. Of course it covers every brain-fart of Trump, but stuff-all on unfolding economic issues in Australia.
Bad move ABC, but go well David!
The proverbial Barry Crocker.
Not a huge fan of these indices, but in concert with the other wheels that are falling off the economy, it would be a mistake to ignore what is being signalled
ICYMI
RBA is downplaying the fall in house prices & rise in unemployment rate at their peril
The RBA is playing a dangerous game.
RBA Deputy Andrew Hauser downplayed the effect of rising unemployment & falling house prices when outlining the issues dominating RBA thinking as it prepares for the interest rate announcement on 3 Nov.
While Dr Hauser was at pains to say inflation was ‘materially worse’ than forecast in August, he gave short shrift to the ‘materially worse’ unemployment rate. He also glossed over falling house prices even though around $1 trillion of household wealth has been destroyed since March, something that presents material downside to household spending growth.
youtube.com/watch?v=qqN2KSt4…
Oh - it's not just Australia that these global oil prices are impacting.
Contrary to the muppetry that goes on here
The shock of oil prices at a five-month high of $110 a barrel and gas prices in Asia and Europe hitting their highest levels since December 2022 is making its mark on household budgets.
As well as raising the costs of transport and heating, it adds to pressure on food, clothing and packaging prices and contributes to elevated levels of inflation and borrowing costs reut.rs/4dQSeUW
