Economics

The financial markets are on edge as the United States once again comes to the brink of defaulting on its debt. Many commentators have claimed that it is impossible to predict the scale of the fallout if Congress fails to reach a deal, and hence are unsure of how to act. But Central Banks may already be adjusting their reserve holdings as the credit quality of the country deteriorates. continue…

by Ben MacNevin Posted in Economics, Insightful Insights.

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It’s Good Food Month in Sydney so now is the time to come over to our office in Pyrmont and allow us take you to lunch at one of the fantastic restaurants in The Star complex. Uh, well, actually…no. We can’t. Why? Well unless it’s Friday – they’re closed. continue…

by Roger Montgomery Posted in Economics, Insightful Insights.

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The US Government debt ceiling, according to Treasury Secretary, Lew, will be exhausted by next Friday 18 October 2013.

We believe there are four alternatives that may play out over the next week as the political infighting reaches a crescendo continue…

by David Buckland Posted in Economics, Insightful Insights.

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When the Republicans in The House of Representatives and the Democrats in the Senate couldn’t agree on the terms of refinancing legislation, and particularly whether Obamacare measures should be included (Republicans insisted on delaying Obamacare while Democrats held firm), the US government shut down. It has been 17 years since the last shutdown, in which all non-essential governmental operations cease receiving payments. continue…

by Roger Montgomery Posted in Economics, Insightful Insights.

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by Roger Montgomery Posted in Economics.

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Despite the intention of the authorities, Chinese consumption is not growing as fast as GDP. The release of the August 2013 global crude steel output by Worldsteel demonstrates China’s commitment to Fixed Asset Investment. The obsession with expenditure on low yielding fixed assets continues at pace and is one of the reasons the Shanghai Composite Index is currently 64 per cent below its October 2007 record high. continue…

by David Buckland Posted in Economics, Insightful Insights.

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by Roger Montgomery Posted in Economics.

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Mr Andrew Robb was on the front page of the Australian Financial Review on Wednesday as the new minister for Trade and Investment.

Now, I reckon most of us at Montgomery lean a little to the right. We certainly believe business is an important engine of our nation and a very important source of prosperity (if ‘prosperity’ is measured by how much stuff we can afford to buy). Personally, according Vote Compass, I sit squarely in the middle, which might explain why I don’t believe that economists got it right when they decided to use consumption as a proxy for ‘happiness’.

That aside, we know that the LNP is supportive of big business. I mentioned as much on the ABC this week with Ros Childs and Ticky Fullerton. Their logic is simple; big business can employ the most people quickly and make all the economic performance measures such as employment and GDP look good. Sadly this short-term window dressing will ultimately produce an emperor with no clothes. continue…

by Roger Montgomery Posted in Economics, Market commentary.

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by Roger Montgomery Posted in Economics.

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It was a rather gloomy week of economic data releases – total job advertisements in Australia and New Zealand were down by 2 per cent for the month of August, while unemployment rose from 5.7 per cent to 5.8 per cent over the same period. And yet the share price of Seek, Australia’s leading employment classifieds website owner, has risen by 1.7 per cent over the week. That raises the question; why are the rising unemployment headlines not having the same adverse impact on the company’s performance as they once did? continue…

by Ben MacNevin Posted in Companies, Economics, Insightful Insights, Value.able.

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