This is an edited version of a live discussion with Adam Stokes, as we examine the latest developments in Crypto.
Author: Martin North
Martin North is the Principal of Digital Finance Analytics
Its Edwin’s Monday Evening Property Rant!
More from Edwin, our property insider, as the trends in Sydney and Melbourne property diverge further. We also look at the latest news and political positioning around property and we update the WeChat news as well.
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Today’s post is brought to you by Ribbon Property Consultants.
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Youngsters Thrown Under The Bus [Again]
The massive hike in interest rates imposed by the RBA in its attempt to squeeze out inflation is not hitting all household cohorts’ to the same extent. Indeed, some older households with savings and no mortgages are enjoying their wealth boost, after years of low rates eroded their incomes. It is worth noting that the rate of rate increases is the sharpest lift in mortgage rates on record.
Overall mortgage stress, defined in negative cash flow terms has never been higher, as we discussed in our recent live show.
Within that, the consequences are perhaps most profound for younger, often more leveraged households. Indeed, the 2023 Risk Radar Report from credit bureau Experian shows that recent first home buyers that purchased in 2019 or later are suffering the highest rates of mortgage stress, as well as missed payments.
A decline in living standards will most acutely be felt by younger cohorts, as well as those with big mortgages held into retirement and beyond.
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Today’s post is brought to you by Ribbon Property Consultants.
Markets Say Confused? You Will Be…
Our latest weekly markets update.
Overall, the trading week was marked by rising expectations that the Federal Reserve will shift to cutting rates sooner and faster next year, bolstering bets among bulls that equities are poised to reset record highs in 2024.
MSCI’s index of global shares added 0.12% and headed for a monthly gain of 8.7% after investors grew increasingly confident that U.S. interest rates have peaked, with the market narrative shifting to the timing of cuts.
Bank of America strategists, have laid out an optimistic forecast for the S&P 500, predicting the index will reach a new high of 5,000 by the end of 2024. This bullish outlook follows a notable monthly surge in the index, which saw its strongest gain since July of the previous year.
The bank’s equity team has identified a transition in market dynamics from broad macroeconomic concerns to a focus on individual company performance, dubbing the current climate a “stock picker’s paradise.” This shift is underscored by a significant increase in “idiosyncratic alpha,” which suggests that stock-specific dynamics are becoming more important for generating robust returns.
But, Investors are understandably having great difficulty determining where the economy is actually headed given it has not responded as it normally would to the extraordinary tightening of monetary policy.
Some of the major banks in the world expect global economic growth to ease further in 2024, squeezed by elevated interest rates, higher energy prices and a slowdown in the world’s two largest economies.
The global economy is forecast to grow 2.9% this year, a Reuters poll showed, with next year’s growth seen slowing to 2.6%. Most economists expect the global economy to avoid a recession, but have flagged possibilities of “mild recessions” in Europe and the UK.
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Going Nowhere Fast: With Tarric Brooker
Tarric is back for another Friday discussion, charts and all. What’s happening to the Australian economy, and what does it mean for households?
Tarric’s slides are here: https://avidcom.substack.com/p/dfa-chart-pack-24th-november-2023
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Economic Update November 2023
This is my edit of our monthly discussion with Nuggets News, covering the latest economic and market developments.
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The Great Migration Recursion!
The 2023 Intergenerational Report projected that Australia’s population will swell by a whopping 14 million people (+50%) over the next 40 years to 40.5 million people – equivalent to adding a combined Sydney, Melbourne, Brisbane and Adelaide to Australia’s current population.
The number one solution to Australia’s housing (and infrastructure) shortage is to moderate NOM to a level that is below the nation’s ability to supply new homes, infrastructure, and business investment, while also safeguarding the natural environment (including water supplies).
And there is simply no way that we will build enough homes with current extreme NOM levels, as well as high interest rates, elevated materials costs, widespread builder insolvencies, and the like.
The whole notion of bringing in migrants to build homes for migrants is also circular ‘tail wagging the dog’ economics. It is nonsensical to import more migrants to fix a housing shortage caused by too many migrants.
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Today’s post is brought to you by Ribbon Property Consultants.
Are We Being Lied To?
The currently running Senate inquiry into bank branch closures has flushed out that while banks are claiming they are following their customers into a digital future, actually, they ae rather setting that agenda, removing ATMS and Branches and forcing people to go digital, whether they want to or not.
And some banks have all but admitted they are fudging the figures, to buttress their strategy, never mind the impact on real customers.
While politicians are keen to step back from the argument on the basis banks are commercial entities and should be able to make what ever strategic decisions they want, the truth is banks are a government protected species, who have received massive financial support from us tax-payers via the Term Funding Facility and other measures.
And to reinforce the argument that we are being lied to, according to a news.com.au exclusive article, a former ANZ employee has alleged that the bank is forcing customers out of branches and then using their absence to justify branch closures.
Phillip, a pseudonym told news.com.au that during the time he worked at an ANZ branch in a metropolitan area, staff were directed not to serve customers who came to the branch.
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DFA Live Q&A HD Replay: Leith van Onselen: Economics Now!
This is an edited version of a live discussion with Leith van Onselen, Chief Economist at Nucleus Wealth, and co-founder of Macrobusiness. Leith has been leading the charge in highlighting how high migration is killing the property market. Tonight we look at the latest economic trends, and also will compare New Zealand with Australia.
Go to the Walk The World Universe at https://walktheworld.com.au/
Its Edwin’s Monday Evening Property Rant!
More from our property insider as we look at the divergence of the market in Sydney and Melbourne, the new state of origin quest between NSW and QLD, and how not to be bullied by agents desperate for a sale.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.