Category Archives: Australia

Australia’s Economy is a House of Cards

By | | , , , , ,
11 Comments

Flattr this!

By Matt Bar­rie & Craig Tin­dale.

I recent­ly watched the fed­er­al trea­sur­er, Scott Mor­ri­son, proud­ly pro­claim that Aus­tralia was in “sur­pris­ing­ly good shape”. Indeed, Aus­tralia has just snatched the world record from the Nether­lands, achiev­ing its 104th quar­ter of growth with­out a reces­sion, mak­ing this achieve­ment the longest streak for any OECD coun­try since 1970.

Aus­tralian GDP growth has been trend­ing down for over forty years
Source: Trad­ing Eco­nom­ics, ABS

I was pret­ty shocked at the com­pla­cen­cy, because after twen­ty six years of eco­nom­ic expan­sion, the coun­try has very lit­tle to show for it.


» Read More…

Advance Notice

By | | ,
2 Comments

Flattr this!

I’m speak­ing at a Unit­ed Nations Envi­ron­ment Pro­gram con­fer­ence in Bangkok next week, and giv­ing some pub­lic talks there as well, so I’ve writ­ten my posts for the next two weeks for Busi­ness Spec­ta­tor already–on the top­ic of Aus­tralian house prices.

The ABS will also release its House Price Index data next week (on Mon­day Novem­ber 4th) and I’ll try to update a key graph in next week’s post–the cor­re­la­tion of the accel­er­a­tion of mort­gage debt to change in house prices–with that data before Busi­ness Spec­ta­tor posts my arti­cle. Pri­or to the ABS data being pub­lished, this indi­ca­tor is con­sis­tent with house prices ris­ing sub­stan­tial­ly in real terms (see Fig­ure 1).


» Read More…

Excellent Switzer interview on Sky News Australia

By | | , , , ,
13 Comments

Flattr this!

I have just been inter­viewed by Peter Switzer on the Switzer show on Sky News Aus­tralia. Peter inter­viewed me for over 15 min­utes, which allowed plen­ty of time to dis­cuss such things as:


» Read More…

Australian Debt Update

By | | , ,
32 Comments

Flattr this!

Click here for this post as a PDF

I’ve been work­ing on the sec­ond edi­tion of Debunk­ing Eco­nom­ics for the last three months, and I’m now flat out try­ing to fin­ish the first draft by the end of March—hence the pauci­ty of posts recent­ly. How­ev­er the lat­est Aus­tralian GDP fig­ures came out this week, and this has enabled me to update the Cred­it Impulse data for Aus­tralia, which has impli­ca­tions for both employ­ment and asset prices—and espe­cial­ly house prices.


» Read More…

Rudd’s essay is on the money

By | | , , ,
410 Comments

Flattr this!

Aus­tralian Prime Min­is­ter Kevin Rudd has fol­lowed up his cri­tique of neolib­er­al­ism with a new essay in the Syd­ney Morn­ing Her­ald on the caus­es of the cri­sis, and the poli­cies need­ed after recov­ery.

With one excep­tion, his key expla­na­tions for the cri­sis are the same as those iden­ti­fied by myself and the hand­ful of oth­er econ­o­mists who pre­dict­ed this cri­sis before it hap­pened:


» Read More…

Steve Keen’s Debtwatch No. 33 April 2009: Lies, Damned Lies, and Housing Statistics

By | | , ,
152 Comments

Flattr this!

“Lies, damned lies, and sta­tis­tics” is part of a phrase attrib­uted to Ben­jamin Dis­raeli and pop­u­larised in the Unit­ed States by Mark Twain: “There are three kinds of lies: lies, damned lies, and sta­tis­tics.” The state­ment refers to the per­sua­sive pow­er of num­bers, the use of sta­tis­tics to bol­ster weak argu­ments, and the ten­den­cy of peo­ple to dis­par­age sta­tis­tics that do not sup­port their posi­tions. (Wikipedia)

Two recent speech­es by the RBA sup­port­ed the con­tention that Aus­tralian house prices are no longer over­val­ued, that mort­gage repay­ment costs have returned to his­toric aver­ages, that Aus­tralia is suf­fer­ing a hous­ing short­age, and there­fore that the Aus­tralian hous­ing mar­ket should not expe­ri­ence the cat­a­stroph­ic falls that are now com­mon­place across the OECD–and espe­cial­ly in the USA.


» Read More…

I do not know anyone who predicted this course of events…

By | | ,
22 Comments

Flattr this!

Sev­er­al peo­ple have com­ment­ed on the speech by Glenn Stevens (for inter­na­tion­al read­ers, Stevens is the Gov­er­nor of Aus­trali­a’s cen­tral bank, the Reserve Bank of Aus­tralia) yes­ter­day in which he com­ment­ed, inter alia, that:

“I do not know any­one who pre­dict­ed this course of events. This should give us cause to reflect on how hard a job it is to make gen­uine­ly use­ful fore­casts. What we have seen is tru­ly a ‘tail’ out­come – the kind of out­come that the rou­tine fore­cast­ing process nev­er pre­dicts. But it has occurred, it has impli­ca­tions, and so we must reflect on it.”


» Read More…

DebtWatch No 29 December 2008

By | | , ,
52 Comments

Flattr this!

What’s Real­ly Going On? or…

Why Did I See it Com­ing and “They” Did­n’t?

Part 2: The Mod­els

“But this long run is a mis­lead­ing guide to cur­rent affairs. In the long run we are all dead. Econ­o­mists set them­selves too easy, too use­less a task if in tem­pes­tu­ous sea­sons they can only tell us that when the storm is long past the ocean is flat again.” (Keynes, A Tract on Mon­e­tary Reform, 1924)

In last mon­th’s Debt­watch, I explained why the data side of why the “Finan­cial Insta­bil­i­ty Hypoth­e­sis” enabled me to pre­dict this cri­sis, long before con­ven­tion­al “neo­clas­si­cal” econ­o­mists had any idea it was approach­ing.


» Read More…

Always look on the bright side of … economic data?

By | | ,
114 Comments

Flattr this!

If things are real­ly grim, it helps to have an inde­fati­ga­ble nature, and there’s no doubt that RBA Deputy Gov­er­nor Ric Bat­telli­no has that in spades—at least in the speech­es he makes at pub­lic con­fer­ences. Were I being cru­ci­fied, I’d like to have Ric up there with me, singing “Cheer up Bri­an!…”, to take my mind off the nails.

But were I still in the Gar­den of Geth­se­mane, and actu­al­ly try­ing to avoid the Romans (and an extend­ed Pilates ses­sion the next day), I think I’d want some­one else on look­out duty.


» Read More…

DebtWatch No 28 November 2008: What is Really Going On?

By | | , ,
86 Comments

Flattr this!

2nd Anniver­sary Issue…

Why Did I See it Coming and “They” Didn’t?

The finan­cial cri­sis is wide­ly accept­ed as hav­ing start­ed in August 9 2007, with the BNP’s announce­ment that it was sus­pend­ing redemp­tions from three of its funds that were heav­i­ly exposed to the US secu­ri­ti­sa­tion mar­ket (click here for the BNP August 9 2007 press release).

Just three months before­hand, the OECD released its 2007 World Eco­nom­ic Out­look, in which it com­ment­ed that:


» Read More…