Since we looked at sales of new cars back in September, the situation has changed dramatically. Sales in all categories have fallen sharply, but the category of SUV is by far the worst.
In a presentation to the Parliamentary Library Steve Keen has bet MacQuarie’s Rory Robertson that Australian house prices will drop, a lot!
We took a bet on the issue. If house prices drop less than 20% peak to trough, I lose; if they fall 40% or more, Rory loses, and the loser has to walk from Parliament House to Kosciusko.
The ABS is an excellent source of data on all kinds of topics, but the Hedonic Index published by RpData is arguably a better reflection of true house prices. It is also more frequent and more up to date. Here is what it shows.
House prices are a sensitive subject to the average Australian. They have been told that house prices never fall, but that no longer seems to be true. Here is one authoritative source of information, the ABS.
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Since the stock exchange is an index of economic activity and effectively measured in dollars, it is useful to compare it to the Gross Domestic Product. Here is what it looks like.
It seems quite obvious that the stock exchange is on an upward trend, but how predictable is that? And if there is a trend, how have recent events compared to the trend? Here is the All Ordinaries since 1980, and the trend looks pretty obvious.
Credit markets in Australia have been under a lot of stress recently. This shows up quite nicely in the Open Market Operations statistics published by the Reserve Bank.
The question is whether the current account and its main components are simply a fixed fraction of GDP or whether they are growing or shrinking over time. Here is how the proportions appear.
The Current Account includes not just the balance of trade but also the net of income or expense such as interest and dividends. Here is how this looks together with the trend.
Although Australia exports things the world wants, the balance of trade has been negative and increasingly so. Here is what it looks like.
