Renegade Economists Podcast 61

Karl FitzgeraldCommentaryLeave a Comment

Show Notes

– Recorded Wed Nov 5th

1 million people watching him at midnite!
Yes We Can

Housing demand in a nosedive

Darn we didn’t get to mention this!

About 50 out of 100 houses sold at auction in Melbourne on the traditionally slow Cup weekend, while in Sydney the auction clearance rate crept up slightly from last weekend’s 12-month low to 43%.

According to Australian Property Monitors, Adelaide fared even worse, with only 35% of homes finding a buyer, while Brisbane recorded an abysmal 27% sales rate.

That could be good news for first home buyers – vendors desperate for a sale before Christmas could lower their prices.

But still they try this…!

Australand Victorian residential division head Robert Pradolin had also noticed an increase in inquiries in the past fortnight. He said the issue now was to make sure enough zoned land wads available when inquiries were converted into sales.

We blogged on this issue yesterday

Join our growing list of Podcasters listening to us as they do the dishes/ garden or commute

Land release not the house price problem

IT WAS one of the most pernicious of the myths peddled during the 2007 federal election campaign – that state Labor governments were largely to blame for the record low levels of housing affordability and all they needed to do to ease the problem was to release more land.

Yes, excessive taxation, development levies and restrictive planning policies- especially in cities such as Sydney – added to the problem of affordability and discouraged development. But the idea that there was a government-manufactured land shortage was short on hard evidence.

Murky statistics cloud slump in house prices

The Bureau of Statistics reports that Australian capital city house prices fell 1.8% in the September quarter compared to the June quarter of this year – the biggest slide since its reports began. Melbourne prices slid 1.9%.

Swan says growth to slow to 2% in 2008/09 as budget bears full force of global crisis

“There’s no point in trying to sugarcoat these figures.”
Mr Swan said tax receipts would be about $40 billion lower than expected,

He repeated that while Australia was not immune from the effects of the global financial crisis and the global downturn, it was better placed than most other countries to withstand the fallout.

*** ???? really with housing at record highs????

What’s the CBA’s game with rates, ABC and Allco?
Glenn Dyer writes:

So what’s the link between the Reserve Bank rate cut of 0.75%, the Commonwealth Bank’s stingy cut of 0.58% and the failure of Allco Finance and the impending collapse of ABC Learning Centres?

Well, those two companies have combined debts of well over $2 billion and can’t meet them; they’ve been kept alive by their banks extending repayment deadlines. That charity has finally been exhausted.

Nightmares at hyper-speed
By The Mogambo Guru

Doug Noland’s Credit Bubble Bulletin was still on my computer, and there, big as life, I read not only that “Federal Reserve Credit expanded another $63.2 billion to a record $1,803 billion”, but that this latest whopping glop of credit from the Fed has reached “a historic six-week increase of $915 billion.”

My brain is staggered! In six lousy weeks, all of the total credit in the banking system created by the Fed since 1913 was almost instantly (poof!) doubled!

Bush’s Last 100 Days the Ones to Watch
by Jesse Jackson

About 90 new rules are in the works, and at least nine are considered “economically significant” because they would impose costs or promote societal benefits that exceed $100 million annually. Many will make changes that the new administration will find it hard to reverse for years to come.

Now it appears that banks plan to hoard the cash, to use it to help pay for mergers with other healthy banks (not weak ones), or to pay out dividends and bonuses.

Smoking, the Credit Crunch and Global Warming

The experts saw this coming. Warren Buffet got out of the credit-swapping business years ago, calling them ‘financial weapons of mass destruction’. A new international banking agreement had been waiting in the wings since 2001, the New Basel Accord. It eliminates double gearing.

It’s been twenty years since Margaret Thatcher announced to the UN General Assembly that climate change represented the greatest threat to civilization.

The credit crisis meant the whole world tried to de-leverage overnight. But it turns out our economy needs credit. Our panicked response led to a frozen banking system. We are experiencing a hard landing.

We can’t de-carbon our economy overnight either. A defining event will eventually come – the mother of all hurricanes, an unending drought in the Prairies – but it will be too late. Our economy is more addicted to coal and oil than it is to cheap credit. That addiction will be harder to break.

Ignoring well known but long term effects of behaviour is to ignore reality. We learned our lesson from medicine and have legislated smoking to the margins. We will surely learn something from the credit crisis.

What remains to be seen is whether we learn a larger lesson. The transition to a low-carbon economy must start today.

Brown Mountain

Brown Mountain, an area of high conservation value that was promised protection by the state government is now being logged.

Logging commenced on Monday 27 October.


Write to the premier John Brumby and environment minister Gavin Jennings.
But a mention of forests as critical carbon stores and soaks, biodiversity store houses, water makers (Snowy catchment) and huge tourism potential might be good.

Filter to cause World Wide Wait

Another we didn’t get time to mention: INTERNET speeds could slow by 30 per cent under the Government’s proposed web filtering scheme, even though it will do little to block illegal content.


Obama and his friends – Will.I.Am
Olmecha Supreme

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