Economics

Why do we have a housing crisis? We’re told it’s because there isn’t enough housing, so the price to purchase or rent is too high for young people. There’s no denying the truth of those two answers. One might, however, choose to dig a little deeper: Why do we not have enough houses in Australia, and why are prices so high? continue…

by Roger Montgomery Posted in Economics.

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The U.S. recorded its 23rd consecutive federal deficit in the year to September 2024 at US$1.83 trillion, around 6.5 per cent of gross domestic product (GDP). For October and November 2024, the federal budget deficit hit US$622 billion, up US$242 billion or 64 per cent year-on-year. Admittedly, some of the jump was related to timing differences. continue…

by David Buckland Posted in Economics.

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This article was first published in The Australian on 30 March 2013.

LAST week, Wesfarmers chairman and head of a business council panel on the decline of value-adding and manufacturing in Australia Bob Every described Australia as a mere “quarry”. continue…

by Roger Montgomery Posted in Economics.

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If you haven’t yet, read Bored apes and bananas – Part 1

Since the beginning of the year, some commentators have voiced concerns that equity valuations have become historically stretched. Thanks to the rally in technology stocks, Wall Street’s major indices have displayed historically high valuation metrics such as the cyclically adjusted price-earnings (CAPE) shiller ratio. continue…

by Roger Montgomery Posted in Economics, Market commentary.

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John Templeton famously observed; bull markets are born on pessimism, grow on scepticism, mature on optimism, and die on euphoria.

With several commentators now labelling markets euphoric, the call for a correction is becoming louder. continue…

by Roger Montgomery Posted in Economics, Market commentary.

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Socialism is a political and economic theory of social organisation that advocates for the means of production, distribution, and exchange to be owned or regulated by the community. Socialists believe the government is the community apparatus that should control all aspects of the economy. continue…

by Roger Montgomery Posted in Economics.

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“Buffett screams sell!” “Buffett sounds alarm!” They were the headlines that greeted me recently, about Oracle of Omaha, when I opened my news app to read up on what others thought about the rally in markets since 2022 – a rally that anyone following would know we frequently and repeatedly explained would transpire, and a rally that has accelerated following the election of Donald Trump as the next U.S. President. continue…

by Roger Montgomery Posted in Companies, Economics.

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Every day, I am met with articles quoting commentators telling me that the market is high and, therefore, on the precipice of a correction. Let’s get one thing straight – markets don’t fall just because they are high. They can stay high and continue upwards for a long time. It is also a mistake to believe that a catalyst is required to cause the market to crash. Investors, to this day, debate the trigger for the 1987 crash. continue…

by Roger Montgomery Posted in Economics.

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Following the election of Donald Trump as the next U.S. president, a number of market analysts are crunching the numbers on what, if anything, it means for markets. Given there is an election every four years and most investors are investing over a longer time frame than that, who is in charge should matter relatively little. We will examine what might matter more, later in this post. continue…

by Roger Montgomery Posted in Economics.

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The Reserve Bank of Australia (RBA) is fighting the government sctor where aggregate expenditure has jumped from a long-term average of 22.5 per cent of gross domestic product (GDP) for the five decades from 1970 to a forecast 28 per cent of GDP. “Underlying inflation” is running at 3.5 per cent, and the strength of public spending has been underappreciated, assisting aggregate demand and keeping unemployment low.    

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by David Buckland Posted in Economics.

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