This is an edited version of a live discussion, with our property insider Edwin Almeida as we explored how to plan and prepare a property for sale in the current climate.
In this weeks Rant Edwin and I discuss the fallout from the budget, the latest developments in non-approved extensions, and trends from the WeChat Chatters and Silent Tigers as Australian property is still used to launder money.
You can also join Edwin and I for a live show on Tuesday 21st May at 8pm Sydney as we discuss how to prepare your property for sale. You can ask a question live: https://youtu.be/38o1E_69o3c
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This past week, while we were distracted with the budget, our controlled digital future came one step nearer, as the Australian Federal Governments Digital ID Bill sailed through Parliament last week with the support of the crossbench, having been previously passed in the Senate.
The passing into law of this bill may at a superficial level sound sensible, given that as more Australians are increasingly transacting online, our identities are vulnerable in new ways. So the Digital ID is to provide “secure” access system for other services that we can have confidence and trust in; the Government says.
But as I discussed in my previous show from the 29th March, Digital Tyranny Is One Step Closer! https://youtu.be/kVVmG_7ddWg I am reminded of the parable of the frog, who slowly gets cooked to death, in a pot as the temperature rises – the same in true for Australians, as civil liberties such as the use of cash, are removed, even as the digital architecture for future control gets put in place. You can see parallels elsewhere round the world and aligned with the agenda of several high profile non-elected bodies like the World Economic Forum – of “you will own nothing and be happy” fame.
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This is our weekly market update. After recent wobbles on concerns of higher rates for longer, the Bulls have been stomping through the markets this week. Data dependency is a marvellous thing because each shiny new data point has the potential to swing the market violently. Some might well be detecting signs of weakness below the surface, suggesting further reversals ahead.
The blue-chip Dow Jones Industrial Average passed the 40,000 level for the first time ever earlier in the week, and record highs have also been seen by major indices in Europe and Asia as investors took advantage of expectations of lower interest rates globally. These markets have remained relatively resilient even as U.S. macro data have shown signs of softening, with the PMI and ISM surveys declining in April, labour-market data worsening, consumer confidence dropping and the housing market deteriorating again.
The bulls of the ASX are running again this week in a classic “bad news is good news” rally. Lingering concerns that sticky inflation could force the Federal Reserve or the Reserve Bank to raise rates have suddenly been extinguished. For all that worry about higher-for-longer rates exposing cracks in the local economy – the weakening consumer spending we’re seeing, the rising corporate insolvencies, weakening consumer and business sentiment – the ASX 200 has quietly added 4 per cent within two weeks, and is now up 3.3 per cent this year. Since October 2022, it has gained 22 per cent.
Never mind that valuations look stretched and equity risk premiums on both sides of the Pacific (the difference between the equity market’s earnings yield and the 10-year bond yields) are almost non-existent. Local investors continue to plough into their market darlings in the firm belief that rate cuts are coming.
The latest edition of our finance and property news digest with a distinctively Australian flavour.
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Last week Michele Bullock the RBA Governor was asked a good question about how high migration might impact inflation. But her answer was well, weird, as she tried to trade off pressure on the housing market from higher demand driven rent rises against supplying more workers to meet business demand (and implicitly increasing economic activity).
Treasurer Jim Chalmers, Speaking at the National Press Club on Wednesday explained that Tuesdays Budget forecast of headline CPI inflation falling to 2.75% by the end of Financial Year 2024-25 (not I January as I noted some reporting claimed), was predicated on at least in part the government cutting net overseas migration.
“We’re seeing a substantial moderation in inflation in the forecasts and in the last couple of years as well, and that is largely because of how we’re managing the budget but it will also be increasingly about how we’re managing the population as well”, Chalmers said.
Right, so it must also be true that if lower migration will ease inflation, then high migration will drive inflation higher.
Then we got Opposition Leader Peter Dutton’s policy as part of his budget response. He promised that a Coalition government would drastically slash migration as its main way of freeing up more than 100,000 homes over five years. A Dutton government would reduce Australia’s permanent migration program by a quarter – from 185,000 to 140,000 for the first two years “in recognition of the urgency of this crisis”, Dutton said.
Treasurer Jim Chalmers has described the opposition leader’s budget reply proposing migration cuts as an “unhinged and risky rant”.
But again, it’s a battle of announcables, with numbers being banded about. But my take is that neither side of politics are really wanting to take this on seriously, despite the direct link to higher inflation.
In both cases, this is more of policy announcements to try and win an election than nation building policy reform, which is needed for both migration and the gas market.
The net result will be higher inflation for longer, requiring higher interest rates than otherwise needed.
Fickle investors are no longer pricing the possibility of another cash rate rise from the RBA after data released overnight showed US inflation cooled to 3.4 per cent in April, putting an end to a three-month streak of hotter-than-expected US CPI data; and the Australian Employment numbers from the ABS peak up to an unemployment rate of 4.1%, from a revised 3.9% last month.
This bad news is good news drove the ASX 1.65 per cent higher today, and the US markets already went into record territory, again on the falling inflation read.
Now I have been highlighting that the unemployment series from the ABS has been unreliable, with significant swings month on month. This time the Australian Bureau of Statistics reported an unusually large jump in the number of unemployed people who were waiting to start a new job, amid broader signs the jobs market remains strong and is easily absorbing a surge in migrant workers on one hand, but we know from other data the number of job opening are falling. About 7.1 per cent of unemployed people last month had a job they were waiting to start, which was a record compared to previous April periods, the ABS said.
Nothing really new here – recall that the in January, unemployment increased to 4.1 per cent due to a surge in the number of jobless people waiting to start work, it fell back to 3.7 per cent the following month when they officially became employed.
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Today’s post is brought to you by Ribbon Property Consultants.
This is my edit of the monthly economic chat with Nuggets News, as we explore the latest from the markets, and do a deep dive on the Australian economy after the RBA decision and The Budget!
See Nuggets version at: https://www.youtube.com/watch?v=wQgQEpRnezI
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This is an edited version of a live discussion, in which I discuss the latest from the financial markets with Damien Klassen, Head of Investment at Nucleus Wealth and Walk The World Funds. How have earnings season turned out, and where might the markets go next. How will the tussle between Bonds and Stocks play out?
Go to the Walk The World Universe at https://walktheworld.com.au/
It has been many months since our last broadcast on ‘In the Interests of the People’ and many of you the audience has wondered where have we gone?
John Adams was last seen on this platform 7 months ago on 11 October 2023 and then he just disappeared?
Rumours on the internet and social media have been swirling around what has happened to Mr Adams?
I have no doubt that ASIC officials have also been wondering the same! ASIC was one of our most loyal viewers in 2023!
It is worth remembering that this channel started a national conversation about financial crime in September 2022;
On 6 October 2022, Adams published his statistical analysis about ASIC’s handling of reports of alleged misconduct. At this time, the Adams Report was covered by ABC and News.com.au.
On 27 October 2022, in response to the Adams Report, the Australian Senate voted 43 20 to establish an inquiry into ASIC after Senator Bragg moved a motion.
Then this channel led the national coverage about ASIC where we broke some of the biggest stories including that ASIC officials scheming to fix parliamentary proceedings by planting Dorothy Dixers as well as ASIC Chairman Joseph Longo giving the order for officials stop Senator Bragg for pursuing the current Senate inquiry.
This channel started contemplating the proposition of corruption happening at ASIC and our coverage considered the newly National Anti-Corruption Commission.
We also played the testimony of various witnesses who appeared at the ASIC inquiry – including the devastating testimony of former Chair James Shipton.
Next month, the Senate Inquiry will be handing down its much-anticipated report – 18 months in the making.
Be rest assured that Adams’ dedication to the interests of the people remains resolute and unshakable. Soon enough, Adams will make his return. There is an extraordinary story to be told.
In our latest rant Edwin and I tease apart the news surrounding the budget “announcables” relating to housing, discuss the rise of the “distressed sale” and examine how the WeChat Chatters are calling out Victoria as a place to exit.
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Today’s post is brought to you by Ribbon Property Consultants.
