@thekouk.bsky.social
Restrictive interest rates are obsolete: A 50bp rate cut is urgently needed next week.
If the RBA does not cut 50 next week, it will be playing a very risky game with the jobs of tens of thousands of people the stakes in its economic modelling zealotry
www.youtube.com/watch?v=lTYo...
Federal election betting
Individual electorates - who is favourite
Labor 74
Coalition 64
All others 12
Note: A lot of seats are $1.60/$2.40 ish so effectively line ball
What?
The Libs promising a minister for Western Sydney but no minister for Tasmania; western Melbourne, rural Queensland, Adelaide suburbs, northern Perth or the Northern Territory?
The forgotten 25 million Australians say "thanks for nothing"
My latest:
Boomer's tip: Living in Australia in 2025 'okay' for young people.
In many important ways – not just financial – Australia is as great a place to live for young people in 2025 as it was for youth "back in the day"
independentaustralia.net/politics/pol...
My latest:
The miraculous Australian economy is the envy of the world
independentaustralia.net/politics/pol...
Household spending is ticking up after 2 years of tocking down.
The lift into late 2024 is moderate helped by income tax cuts, rising real wages, rising wealth & expected RBA rate cuts.
Not much for the RBA: 18 Feb interest rate cut is all but a done deal.
www.youtube.com/watch?v=p2Lq...
A smorgasbord of data & like all such feasts, not everything appeals to everyone.
Flat job ads & house prices.
Building approvals - up for 10months!
Retail trade - flat monthly; a decent quarterly rise.
MI inflation at 2.3% - another on target result.
www.youtube.com/watch?v=R_l9...
Extraordinary what is happening in the US.
Trump is smashing the US economy. It will end very badly.
Wise investors I speak to are in the process of exiting / downsizing their US exposures.
Federal election betting update - $$$ for Labor as rate cuts loom
A flow of money to Labor despite the polls going against it. It seems punters are looking at the low inflation data & near certainty of an interest rate cut - or two - before polling day.
www.youtube.com/watch?v=BWhw...
Inflation free-fall risks an overshoot below mid point of target.
Annual Trimmed Mean down to 2.7% - Yowzer!
RBA is WAY behind the curve with interest rate cuts - anyone for 50 basis points on 18 February?
25 bps looks a done deal - another on 1 April.
www.youtube.com/watch?v=BSFk...
My latest:
Mortgage payers set for interest rate relief after RBA's 'embarrassingly wrong' call.
Using the monthly data, annual inflation came in at 2.5 per cent in December, with the trimmed mean measure was a stunningly low 2.7 per cent.
au.finance.yahoo.com/news/mortgag...
Federal Election Betting Update
Recent flows are to the Coalition who are now solid favourites.
Cost of living issues?
What about an interest rate cut or 2 before polling day?
Warning: Bet only what you can afford to lose: you win some you lose more.
www.youtube.com/watch?v=py18...
House prices are continuing to fall - should we be worried?
Get set for a sharp improvement in housing affordability but a negative wealth effect as the cycle of weaker house prices continues into 2025.
www.youtube.com/watch?v=YQeb...
Unemployment rate holds 4.0%.
Welcome to the brave new world of the fabulous Australian economy.
RBA, Treasury & all of us need to keep testing estimates of NAIRU.
It's clearly not 5%, nor 4.5% & perhaps not even 4%. It could be, as some suggest, 3.5%.
www.youtube.com/watch?v=sq_w...
The CRB index of commodity prices is lifting - 15+ year high
Driven by price of food - milk, OJ, coffee, cocoa, tea, sunflower oil, barley, beef & eggs. Freight rates also up
Risk is global inflation pressures are up offsetting disinflation from elsewhere
www.youtube.com/watch?v=MD1U...
A raft of 2nd, 3rd tier data confirming economic weakness is persisting.
Consumer sentiment dipped; job ads flat in recent months; house prices continuing to weaken, MI inflation at 2.6% y/y - in target band.
www.youtube.com/watch?v=fpLS...
Australian election betting update - Labor firm on interest rate cuts
Labor has shortened in betting markets but the Coalition remain favourites.
An interest rate cut before polling day?
Sustained low inflation which is easing cost of living concerns?
www.youtube.com/watch?v=b4lB...
Household spending growth remains in the doldrums.
The Household Spending Indicator confirmed weakness rising just 0.4% in Nov.
Goods spending rose 0.9%; the positive Black Friday effect; services spending fell 0.1%.
All points to interest rate cuts.
www.youtube.com/watch?v=IrjX...
The weakness in house prices continues:
Price change first 10 days of January & over the last 3 months:
SYD 0.0% -1.3%
MEL -0.2% -1.8%
BRI +0.1% +1.0%
ADE +0.3% +2.1%
Per +0.3% +1.8%
5 CITIES 0.0% -0.4%
Black Friday sales were expected to underpin a chunky rise in retail trade.
Instead were saw a 'brown Friday' result; weak growth that was concentrated in items with low repurchase frequency - clothes, furniture, electrical.
Big fall likely in December.
www.youtube.com/watch?v=wQBF...
The inflation problem has been conquered!
November CPI rose 2.3% y/y, locking in 4 straight months of inflation being in the target range; 3 months in the lower half of the band below 2.5%.
February rate cut looks a near cert.
My Two Minute Take
www.youtube.com/watch?v=B9dP...
AUD is tracking US 62 cents. This has led some to speculate it will see the RBA delay rate cuts.
BBBZZZ...wrong!
The AUD is floating - and the reasons for its recent depreciation are fundamentally driven. RBA will be looking elsewhere.
My Two Minute Take
www.youtube.com/watch?v=4YS4...
What's in store for the Australian economy in 2025? Here's what to look out for this year
Both home prices and the share market are tipped to go lower this year. But mortgage holders should finally see some relief.
au.finance.yahoo.com/news/whats-i...
My 2025 calls:
GDP H1 1.5%; solid recovery H2 2.75%
Unemployment rate up; towards 4.75%
Inflation hovers 2.25 to 2.75%
Wages growth drops to 3% with downside risk
RBA cuts 150bps
10 yr bonds to 3.75%
AUD regains 70 as USD falls
House prices keep falling -6%
ASX200 weaker 7,500
Federal election betting markets:
Coalition slight favourites vs Labor
WARNING: Bet only what you can afford to lose.
As the Federal election draws near, betting markets will provide a decent guide of election probabilities.
My Two Minute Take
www.youtube.com/watch?v=4wXI...
A lesson in fiscal policy:
The budget deficit/surplus is good/bad.
My Two Minute Take
www.youtube.com/watch?v=C6DW...
Any one who thinks the budget settings are worrying is dull when out comes to fiscal policy.
After 2 surpluses, next few years have puny deficits 1-1.5% of GDP.
Net govt debt is around 20% of GDP.
And this with the weakest economy in 30 years.
Show me a country in better shape?
MYEFO solid news:
The sum of budget deficits over 4 years forecast by Treasury 7 months ago are only a little larger, in total, despite that significant economic slowing in Australia and economic problems in the global economy, particularly China.
www.youtube.com/@StephenKouk...
There's an overpopulated bandwagon of soothsayers who reckon the Labor Government needs interest rate cuts to win the next election.
Election results over the past 3 decades reveal there is no consistent link between interest rates & election results.
independentaustralia.net/politics/pol...
Corelogic data: drop in house prices in intensifying in MEL & SYD; prices flat in BRI: prices in boom cities PER & ADE are slowing.
Supply is up; demand down.
Big question for 2025 is the extent of the falls: -5%? Or more worrying -10%?
My Two Minute Take
www.youtube.com/watch?v=wIXf...
