Economy

House prices keep dropping – and there’s no end in sight

Prices will continue to fall, unless the Reserve Bank gets involved and cuts rates soon Greg Jericho The Guardian Τhe latest residential housing prices figures confirm what buyers and sellers have known for some time: the drop in housing prices is continuing without any real sign of a bottom being reached. This fall, as with the housing boom, is most pronounced in Sydney and Melbourne. This has seen an improvement in housing affordability but it remains above the pre-boom levels. In the ... Read More »

Fog of War Clouds India’s Stocks Rally

Military posturing has revived animal spirits. Cooler heads will suggest the gains are unlikely to last. Anjani Trivedi Bloomberg It’s amazing what a bit of chest-beating and military posturing can do. India’s war of words with and air strikes on Pakistan have reinvigorated the re-election campaign of Prime Minister Narendra Modi. Opinion polls (if you believe them) are predicting a bigger margin of victory for Modi’s National Democratic Alliance than they were two months ago. A creeping skepticism that had ... Read More »

The sudden shift that should have all of us worried about the global economy

The markets’ responses to the latest US Federal Reserve Board’s interest rate and balance sheet decisions were telling. Stephen Bartholomeusz Brisbane Times The immediate reaction of the share market was to mark stocks up, before a more considered assessment sent them back down. Bond rates eased and the US dollar slid against its major trading partners’ currencies. The nature of the Fed’s announcements – a majority of the members of its Open Market Committee expect no rate increases this year and the Fed ... Read More »

Bridging the Gap in the Nile Waters Dispute

Ethiopia is building a mighty dam on the Blue Nile, promising economic benefits for both itself and Sudan. ICG But Egypt fears for its freshwater supply. The parties should agree on how fast to fill the dam’s reservoir and how to share river waters going forward. What’s new?  Ethiopia is moving ahead with construction of Africa’s largest dam, despite Egypt’s worry that it will reduce the downstream flow of the Nile, the source of around 90 per cent of its ... Read More »

Italy’s Risky Silk Road

The Italian government is keen to join China’s “Belt and Road Initiative” and plans to sign an agreement to this effect during Chinese President Xi Jinping’s upcoming visit to Italy. Paola Subacchi Project Syndicate But although deeper trade and investment ties with China could boost its sluggish economy, Italy should pursue them through the EU, not bilaterally. VENICE – Is China’s “Belt and Road Initiative” (BRI) “a train that Italy cannot afford to miss,” as Italian Finance Minister Giovanni Tria ... Read More »

Stagnant Capitalism

A decade after the 2008 financial crisis, faith in markets’ self-regulating abilities once again lies in tatters. Yanis Varoufakis Project Syndicate There simply is no single real interest rate that would spur investors to funnel all existing savings into productive investments, and employers to hire all who wish to work at the prevailing wage. ATHENS – When the Great Depression followed the 1929 stock-market crash, almost everyone acknowledged that capitalism was unstable, unreliable, and prone to stagnation. In the decades ... Read More »

After Danske, Next Dirty Money Route Gets Scrutinized in Denmark

As one avenue for money launderers is shut, another one may be opening. Frances Schwartzkopff Bloomberg In Denmark, home to Danske Bank A/S, the authorities are now taking a closer look at companies that provide payment services. The worry is that the process is becoming so complex that criminals might be able to hide their illicit transactions. Danish Business Minister Rasmus Jarlov says the goal is “to all the time be ahead of the criminals.” Because they’re “trying to exploit any ... Read More »

Housing Affordability Poll Finds Canadians Have Little Faith Government Can Solve The Problem

Only one in 10 respondents want to see 30-year mortgages. Daniel Tencer HuffPost The real estate industry is waiting with bated breath to see whether the federal budget landing Tuesday will offer any good news for first-time homebuyers struggling with historically bad housing affordability in Canada. It seems a good bet the pre-election budget will include something to address Canadians’ growing concerns about housing costs — but few actually believe it will make much difference. A new poll carried out for real ... Read More »

Total Debt Worldwide Hits US$240 Trillion, And The Bank Of Canada Is Worried

“Whether you’re a homeowner or a business person … high leverage can leave you in a vulnerable financial position.” Andy Blatchford Canadian Press HuffPost OTTAWA — The Bank of Canada’s senior deputy governor says an explosion of global debt over the last decade is a top concern that she argues is holding back economic growth and creating vulnerabilities in the world’s financial system. The global financial system is in better shape than it was in 2007 before the financial crisis, ... Read More »

The Fed Should Buy Recession Insurance

If the United States falls into recession in the next year or two, the US Federal Reserve may have very little room to loosen policy, yet it is not taking any steps to cover that risk. J. Bradford DeLong Project Syndicate Unless the Fed rectifies this soon, the US – and the world – may well face much bigger problems later. BERKELEY – The next global downturn may still be a little way off. The chances that the North Atlantic ... Read More »

The ‘R’ word: Are Australians really getting poorer?

Is it the recession you have when you’re not having a recession? Tory Maguire The Age With an election looming, treasurer Josh Frydenberg is just weeks away from delivering his first, and possibly last, federal budget. Last week, OECD data revealed that the Australian economy has fallen into a ”per-capita recession” for the first time since 2006, with global and Australian growth predicted to slow even further. The announcement prompted scepticism from critics. Ross Gittins called it a scare tactic – that any ... Read More »

Lowe tells banks slow payment rollout could limit competition

Reserve Bank governor Philip Lowe last year asked chief executives of the big four banks to confirm they were putting enough resources into rolling out a high-speed payment system, amid concerns the… Clancy Yeates WAtoday The central bank on Thursday published emails Dr Lowe sent in September to ANZ Bank chief executive Shayne Elliott, Commonwealth Bank chief Matt Comyn, Westpac chief executive Brian Hartzer, and then… It declined to release the responses from each of the CEOs, saying these were exempt from FOI ... Read More »

String of British firms switch over to four-day working week

Exclusive: small companies tell the Guardian of the impact of ending ‘Friday fatigue’ Robert Booth Social affairs correspondent and Matthew Holmes The Guardian A string of small British firms have switched their workers over to a four-day week, the Guardian can reveal, amid mounting political interest in the idea that working less could deliver higher productivity and better balance between life and work. A lingerie manufacturer, a lighting design firm and a landscape architect are among a wave of employers experimenting with ... Read More »

Silk Road opens a rift in Italy’s government

Washington and Brussels fear Rome is getting too close to China. Silvia Sciorilli Borrelli Politico ROME — Italy’s government has split over whether to sign onto China’s landmark “One Belt, One Road” infrastructure program that runs across Asia to key European trade hubs. Some 13 EU countries have signed up to China’s new Silk Road plan, but Washington and Brussels are deeply concerned that the involvement of G7 heavyweight Rome could lend greater credibility to a project that they view as a… Prime ... Read More »

Why Americans Don’t Cheat on Their Taxes

The weirdly hopeful story of how the U.S. came to be a leader in tax compliance Rene Chan The Atlantic If such a thing as American exceptionalism remains, maybe it can be found in this: Despite deep IRS budget cuts, an average audit rate that has plunged in recent years to just 0.6 percent, and a… Even more remarkable, most of us feel obliged to pay. To quote the findings of a 2017 IRS survey: “The majority of Americans (88%) ... Read More »

Surging water use, falling dam levels, spark warning to cut down

South-east Queensland’s drinking water usage has reached the highest level since before the 2000s drought, as authorities predict combined dam levels will fall below 70 per cent in the coming days. Lucy Stone Brisbane Times Seqwater, the organisation responsible for 3.1 million Queenslanders’ drinking water supply, has issued a warning asking people to cut down on water use ahead of a warm, dry autumn. The organisation is relaunching its community campaign Water Wise to give people ideas on how to reduce water ... Read More »