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IndyWatch Australian Economic News Feed was generated at Australian News IndyWatch.

Sunday, 16 December

15:51

A victory for common sense? "IndyWatch Feed Economics.au"

Dj vu...all over again

A story popped up in the news once again this week, about loans being written to investors in China without appropriate checking of documentation between 2013 and 2016. 

Nothing new, here, though - in fact it was a well-known issue that was shut down some years back.


As you might imagine the media is absolutely loving the Royal Commission tidbits, and I guess it's pretty easy to believe that there are systemic issues when the same story keeps getting rehashed over and over again.


Conversely, today it's not at all straightforward to get a mortgage in Australia.

Borrowers must be able to pass serviceability at mortgage rates of a minimum 7 per cent, which is the equivalent of up to 14 (fourteen!) interest rate hikes away for many borrowers. 

Far from rate hikes on the horizon, the cash rate futures implied yield curve is negative, and realistically we aren't going to see meaningful moves higher until incomes are also rising solidly.

Meanwhile living expenses are being scrutinised, queried, corroborated, and re-...

14:00

Real Estate FALLING From U.S. To Australia! Seattle DROPS 11% In 6 Months! (Video) "IndyWatch Feed Economics.au"

Real Estate FALLING From U.S. To Australia! Seattle DROPS 11% In 6 Months! Video The Money GPS Video Source

The post Real Estate FALLING From U.S. To Australia! Seattle DROPS 11% In 6 Months! (Video) appeared first on The Daily Coin.

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Saturday, 15 December

18:38

Referal to the ICCC "IndyWatch Feed Economics.au"

Apologies, but I must hereby report The Australian newspaper to the International Court of Chart Crimes. 

The offending exhibit is presented below.


Royal Commission into dodgy chart scales!

17:15

No, the Price of Bitcoin Didnt Drop Because of Bomb Threats "IndyWatch Feed Economics.au"

On Friday, as the Bitcoin price fell by around six percent against the U.S. dollar, several reports claimed that the dominant cryptocurrency dropped in value due to bomb threats. One report from Business Insider Australia, for instance, stated that following an email blast of bomb threats in New York, the price of the crypto asset

The post No, the Price of Bitcoin Didnt Drop Because of Bomb Threats appeared first on CCN

07:00

The Weekend Quiz December 15-16, 2018 answers and discussion "IndyWatch Feed Economics.au"

Here are the answers with discussion for this Weekends Quiz. The information provided should help you work out why you missed a question or three! If you havent already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of Modern Monetary Theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.

Question 1:

A national government can run a balanced fiscal position (taxes equal spending) over the economic cycle (peak to peak) as long as it accepts that, after all the spending adjustments are exhausted, their strategy will ensure that households and firms overall spend more than they earn that is, run down previous savings or accumulate more net debt.

The answer is False.

Note that this question begs the question as to how the economy might get into this situation that I have described using the sectoral balances framework. But whatever behavioural forces were at play, the sectoral balances all have to sum to zero. Once you understand that, then deduction leads to the correct answer.

The trick in the question is that it invites a confusion between the factual (accounting) statement a government deficit (surplus) equals $-for-$ a non-government surplus (deficit) and the proposition put.

The households and firms overall do not exhaust the non-government sector. So what happens when the governments runs a balanced fiscal position to the private domestic sector balance (the households and firms) depends crucially on what happens to the external sector.

To refresh your memory the balances are derived as follows. The basic income-expenditure model in macroeconomics can be viewed in (at least) two ways: (a) from the perspective of the sources of spending; and (b) from the perspective of the uses of the income produced. Bringing these two perspectives (of the same thing) together generates the sectoral balances.

From the sources perspective we write:

(1) GDP = C + I + G + (X M)

which says that total national income (GDP) is the sum of total final consumption spending (C), total private investment (I), total government spending (G) and net exports (X M).

Expression (1) tells us that total income in the economy per period will be exactly equal to total spending from all sources of expenditure.

We also have to acknowledge that financial balances of the sectors are impacted by net government taxes (T) which includes all tax revenue minus total transfer and interest p...

01:00

A vote of no confidence in Europe "IndyWatch Feed Economics.au"

Its been a historic week here in Europe. Everything changed.

Britains Prime Minister Theresa May, Polands Prime Minister Mateusz Morawiecki, and Frances President Emmanuel Macron all faced no-confidence votes.

In the end, they survived.

But the fact that the votes took place at all is deeply embarrassing for the establishment in Europe.

Macrons ambitions for Europe lie in tatters.

May is now expected to quit for the next election.

Over in Germany, Europes mum Angela Merkel will no longer lead her party, either.

On Friday, her replacement was elected. Annegret Kramp-Karrenbauer (say that three times quickly) will take over the party, but not yet the chancellorship of Germany.

Sweden still doesnt have a prime minister to face a vote of no-confidence after the elections were held in September.

The anti-immigrant right-wing party is making things difficult with their 17.5% of the vote.

Believe it or not, the opposition party managed to pass their budget!

On the streets, its no different.

Protests against government policy erupted in Brussels, Paris and Budapest during the week.

There were also peaceful demonstrations in London on the weekend.

The protests in France were bad enough to make French President Macron surrender faster than his compatriots usually do.

He reversed his policies and, with them, his dreams of uniting Europe.

His approval ratings make Trump look like Father Christmas.

Bloomberg wrote Emmanuel Macrons Euro Zone Dream Died This Week and the New York Times wrote Macron Had a Big Plan for Europe. Its Now Falling Apart. Thats because he no longer has any credibility, let alone backing.

Italy had its own dramas during the week, too. The populist governments unelected prime minister and finance minister made a deal with Brussels.

Theyd been holding out for a 2.4% of GDP deficit, but Brussels said no. The Italians declared they wouldnt back down.

Then they went back with 2.2%, but Brussels said no.

The Italians fumed theyd make no more compromises.

Two weeks later, the Italians went back with 2.04% and Brussels said yes.

At least, everyone thought they did. Until this story came out in the Star Tribune: EU finance official says new Italian budget insufficient.

Back to the drawing board?

Just when the Italians looked to be making progress with Brussels, news of the French budget hit the press.

...

Friday, 14 December

19:01

Under pressure "IndyWatch Feed Economics.au"

Hypertension

This is now the longest Bitcoin correction since the 2013 to 2015 bear market, with prices down almost for a full year since the peak, 362 days ago. 

It's also the greatest correction since 2013 to 2015, with prices down by more than 84 per cent from the peak at the time of writing. 


Not an asset class for the faint of heart.

16:16

Daily Digest 12/14 - Good News Friday: The 'Other' America, How To Watch Tonight's Meteor Shower "IndyWatch Feed Economics.au"

Daily Digest 12/14 - Good News Friday: The 'Other' America, How To Watch Tonight's Meteor Shower
  • Airlines can't kick people off overbooked planes under pending law that brings sweeping changes
  • Autistic people listen to their hearts to test anti-anxiety therapy
  • The 'Other' America (That MSM Won't Let You See)
  • The Search for Alien Life Begins in Earths Oldest Desert
  • Revealed: Australian solar-powered electric vehicle with swappable bodies
  • Heres how to watch the amazing meteor shower that starts tonight and ends tomorrow morning.
  • Chrome Experiments: An Interactive Map Of The Universe
  • Stunning Video Shows a Man Flying With Birds

Join the conversation

11:56

Pay up or Else: Bitcoin Bomb Threat Emails Show up in New Zealand and Australia "IndyWatch Feed Economics.au"

Investigations are underway in Australia and New Zealand following reports of bomb threats where the sender is demanding a payment in bitcoin failure to which they will detonate an explosive device. The emails are believed to be similar to the ones that had earlier been received by various institutions and facilities in the United States

The post Pay up or Else: Bitcoin Bomb Threat Emails Show up in New Zealand and Australia appeared first on CCN

IndyWatch Australian Economic News Feed Archiver

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