I caught up with Morgan Cox, who asked a simple and direct question on ABC Q&A the other day about the rental crisis hitting Australian families, and migration.
The answers from the panelist were appalling, and showed they were playing lip-service to the issue rather than wanted to deal with the real issue, which should be top of mind as the election approaches.
The reaction across socials was amazing, so kudos to Morgan, an ordinary bloke, with a family, trying to get by, willing to take a stand and hold our politicians to account!
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This the latest in our occasional “Rabbit Hole” series, with my friend George, where we test the bounds of reality, from politics to the financial system. This time roles are reversed, as I am a guest on my own show!
Thus, we explore some of the philosophical foundations which under pin current events, and in the light of the upcoming election ask how we should think about these issues?
Thanks to George for leading the show, and also editing content.
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This is our weekly market update, where we start in the US, cross to Europe and Asia, and end in Australia, covering commodities and crypto along the way.
It was another complex week, with the interplay of tariffs, central bank non-decisions, and company reports plus the witching trades on Friday adding to the mix. Never-ending market disruptions are upending investment blueprints everywhere in 2025, while hitting sentiment across US stocks. This week the Fed, Bank of England and Bank of Japan left interest rates unchanged as they assessed the economic impact of U.S. President Donald Trump’s trade tariffs against global trading partners. Many of the world’s major central banks sent a strong message this week that the uncertainty caused by U.S. President Donald Trump’s trade wars is weighing on growth, stoking inflation, and dramatically reducing visibility on the interest rate outlook.
For the week the MSCI global index was 0.7% higher, but still down nearly 4% lower over the past month and flat year to date. Compare that to the European STOXX 600 which is up more than 8% year to date, while the SP500 is down 3.64% from 1 Jan, and the ASX 200 is down 2.79%.
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Last Tuesday I had Andy Schmulow the ACP Candidate for the Senate in NSW in the upcoming election, on my live show. Dr Schmulow left no stone unturned as he methodically called out the power of big business from the Banks, Airlines, Big Consulting Firms and Supermarkets, across Australia who are systematically gouging ordinary households and businesses across the country, protected by the current political system.
Its corruption on a grand scale, which is why our big banks, airlines, gas companies and supermarkets are making super high profits at our expense, and many shareholders by the way in these companies are overseas, so we lose out there too.
And in an interesting happenstance, the ACCC on Friday released their massive 441 report on the Big Supermarkets. It is a thorough examination of the extraordinary number of moving pieces in the grocery sector, and the legitimate concerns of different players at different stages though the value chain.
The ACCC says that Grocery prices in Australia have been increasing rapidly over the last 5 financial years. Most of those increases are attributable to increases in the cost of doing business across the economy, including particularly production costs for suppliers, which has increased supermarkets’ input costs. However, ALDI, Coles and Woolworths have increased their product and EBIT margins during this time, meaning that at least some of the grocery price increases have resulted in additional profits for ALDI, Coles and Woolworths.
They say Coles’ and Woolworths’ apparent ability to increase retail margins for packaged grocery products by more than is necessary to accommodate a wholesale price increase indicates they have – and sometimes exercise – a level of market power in retail markets.
But despite the furore over rising prices, the ACCC noted there’s nothing illegal about businesses making a profit. Woolworths recorded a profit of $739 million in the first half of the current financial year, with Coles reporting a $576 million profit during the same period.
The ACCC says there’s no “silver bullet” to address all of the issues identified in its full report but has recommended a suite of potential legislative and policy reforms to address areas that aren’t working well — particularly when it comes to competition in the industry.
At the heart of the final report of the Australian Competition and Consumer Commission’s supermarket inquiry is a simple truth: the horse has bolted. They suggest things cannot change. But I say, rubbish, time for new broom, to stop the gouging… but that needs real political intent. Cue Andy!
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The ABS released their latest and now infamously wobbly employment data today which reported a surprising dropped in February, declining by 52,800 — led by full-time roles — compared with a forecast 30,000 increase. The outcome was the sharpest fall in employment since December 2023. The jobless rate held at 4.1%, reflecting a fall in participation rate to 66.8% from a revised 67.2%.
We know that since COVID Public Statisticians around the world have been struggling to measure real employment and unemployment accurately – for example the ONS in the UK all but publically admitted their figures were rubbish. At very least, while The ABS adjusts the data for seasonal patterns around hiring, firing and employee leave, these past patterns have recently changed making its report all but meaningless.
That said, the jobless rate remained at 4.1% and the central bank expects it to be 4.2% in June this year, so the surprise drop in employment is unlikely to bring forward another rate cut from the Reserve Bank of Australia, as the jobs market is still historically strong.
“Today’s data shows some of the expected softening in the labor market,” Treasurer Jim Chalmers said. “While there are still challenges in our economy and people are still under pressure, we still have the lowest average unemployment of any government in the last 50 years.”
The RBA’s next meeting will take place over March 31-April 1.
Nothing here to justify rate cuts against the impact of tariffs incoming!
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Overnight we got the latest decision from the US Federal Open Market Committee keeping its benchmark federal funds rate steady for the second straight meeting, in a target range of 4.25%-4.5%.
But in the subsequent press conference, where Fed Chair Jerome Powell seemed to be tip-toeing through a potential minefield, he said the committee had down forecast growth, increased inflation expectations, and said the full impact of tariffs had yet to work though. And while the FOMC did slow the pace of balance-sheet runoff — their updated forecasts and dot plot betrayed little concern about the growth scare that has gripped markets. More rate cuts are expected, perhaps two though the year, despite the higher inflation and lower growth.
Significantly though he dusted off the old “transitory” moniker again, which you will recall was used through the early phase of the strong inflationary pulse we saw post COVID. It was then dispatched to the dustbin of stupid and unhelpful terms, that is until it was resurrected in the press conference. Seeing as they got it so wrong last time, was it wise to do that, as I am not sure it will help their credibility this time around.
Incidentally, because the Fed will also start shrinking its balance sheet at a slower pace starting in April, meaning it will reduce the amount of bond holdings it lets roll off every month that is a quasi rate cut, without being a rate cut. Again, this is engineering a watch and wait period, for the FED, and perhaps the possibility of the real rate cut will be clearer by the Northern Summer.
So this was a do not harm press conference, but I suspect despite wanting to calm the markets, and avoid tripping over Trump, the truth is the data-dependent FED is itself unsure of future trajectory. Which may not bode well for the rest of us!
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This is my edit of our monthly economic update recorded with Nuggets News, where we parse the latest news and data and try to figure what is really going on.
This time we focus on the fall out from the trade wars, and Australia’s economic prospects ahead of the upcoming budget and election.
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This is an edited version of a live discussion Dr Andy Schmulow, Associate Professor of Law at the Faculty of Business and Law, School of Law, Wollongong and NSW Senate Candidate for the Australian Citizens Party.
He is internationally recognised as a deep subject-matter expert on financial system regulation, regulating to compel better conduct in retail markets, conduct risk and corporate governance and has provided evidence and advice to recent inquiries into banking and financial services matters in Australia.
This week we dive into the questions of selecting an Auctioneer, under-quoting and the competition for regulation between Sydney and Melbourne, plus the latest trends in prices and listings.
And Edwin shares some feedback direct from the industry, so we can see how they are seeing things. Below the hood, things are not as presented in the RE community.
Caveat Emptor!
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This is our weekly market update, where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto along the way.
World markets on Friday ended another choppy week on an upbeat note as investors pushed aside growing concerns over the global trade war and bought back beaten down stocks, although few will be confident a definitive market bottom has been reached yet. U.S. President Donald Trump’s tariff agenda is very much in place, and markets remain vulnerable to the next escalation in tensions. The lack of any new announcement from Trump on Friday was, for investors, perhaps a classic case of ’no news is good news’.
The U.S. Senate did pass a stopgap spending bill, averting a partial government shutdown, after Democrats backed down in a standoff driven by anger over President Donald Trump’s campaign to slash the federal workforce. After days of heated debate, top Senate Democrat Chuck Schumer broke the logjam on Thursday night, saying that he would vote to allow the bill to advance. Schumer said he did not like the bill but believed that triggering a shutdown would be a worse outcome as Trump and his adviser Elon Musk were moving swiftly to slash spending.
And another dose of good news on Friday came from Germany, where Chancellor-in-waiting Friedrich Merz secured support from the Greens to revise the country’s debt brake and unleash the biggest fiscal package since 1990, proposals that should deliver a massive boost to German and European growth.
But frankly, the broader horizon is filled with dark, ominous clouds, indicated by some key market moves and economic data on Friday – safe-haven demand propelled gold above $3,000 an ounce for the first time, while U.S. consumer confidence fell to its lowest in nearly two and a half years and longer-term inflation expectations hit their highest since 1993.
In a post on X, former US treasury secretary Larry Summer said: “I am convinced there is nearly a 50 per cent chance of recession, and maybe even a far greater risk of recession, unless the current policy approach of tariff threats lurching is altered.”
Although markets clawed higher on Friday, the global MSCI Index was down a further 1.77% across the week, while the European STOXX 600 was down a further 1.22% over the 5 trading days.
In the US, The S&P 500 confirmed a correction on Thursday with the index closing down more than 10 per cent from its February 19 record high amid heightened uncertainty about President Donald Trump’s tariff moves and his determination to revamp the US federal government. That said, U.S. stocks rebounded on Friday as investors hunted for bargains at the end of a tumultuous week. S&P 500 +2.13% Dow +1.65% NASDAQ +2.61%. The S&P 500 and NASDAQ logged their biggest one-day percentage gains since November 6, the day after the U.S. presidential election. It was a broad rally, with recently battered tech-related megacaps enjoying a comeback.
The S&P/ASX 200 closed on Friday with its third-largest weekly loss this year despite a rally in Australian iron ore and gold mining stocks. The index shed almost 2 per cent of its value this week. It closed 9 per cent off its February 14 peak of 8555 points, after hovering at correction levels for days. It rose 0.5 per cent, to 7789.7 – its first day in the green since Monday. But Morgan Stanley has recommended clients avoid Australian equities citing their close correlation to Wall Street after a torrid start of the year for both markets as they hover at or near correction territory.
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