Although Australian inflation remains among the highest in the world, some think interest rates are about to settle.
As capital exits the non-bank sector, credit rationing could be next, and entrench a negative feedback loop.
Despite Australia’s strong economic growth, much of the damage has been inflicted in the post-pandemic period as government spending spirals out of control.
As home values enter freefall, the RBA is doubling down on higher rates, setting the stage for what could be the worst property crash in the nation’s history.
A conventional rate cycle would be brutal for equities and private markets. Yet investors are behaving as though the first Fed hike in three years is good news.
For Australia, the irony is that we import the shock without the boom. We account for a sliver of AI capex, yet an open economy pays the world price of capital.
The savage repricing of long-term interest rates higher raises the hurdle rate for all investments.
The RBA has fallen behind the inflation curve and is running out of room to hide. But another two rate rises risks the biggest house price correction in history.
Former macro maven Scott Bessent is trying to bend financial markets and his own central bank to his will. History suggests this is a tricky trade.
With Australia staring down a record property downturn and hidden bank hybrid risks emerging, staying super liquid is the ultimate defence against the storm.
In the tycoon’s telling, humanity is on the cusp of “sustainable abundance”. Work is optional. Poverty is abolished. It is a beguiling vision, but also naive.
Investors seem to have missed the fact that the new Fed chair has already delivered his rate hikes.
AI is driving the biggest capex boom in 235 years, creating a world where we see the Fed spin 180 degrees and raise rates twice in the coming months.
That might be good or bad news depending on your perspective. Either way, blame Canberra’s catastrophic budget and the Reserve Bank of Australia’s rate rises.
These professional politicians behave like parasites, sucking the life out of private enterprise. But the blood suckers should be careful what they wish for.
Elon Musk’s genius is difficult to synthesise because each part reinforces the others, beginning with a philosophical vulnerability: humanity lives on one rock.
Despite the relief rally triggered by the apparent end of the Iran war and euphoria over SpaceX’s blockbuster listing, a much larger problem is already brewing.
We can’t tax and subsidise our way to productivity, but a radical tax and spending overhaul could build the world-class economy we deserve.
The main fairness issue with this budget is borrowing $267 billion over the next four years, robbing future taxpayers to buy votes in the present.
Younger investors with the largest exposure to high-growth assets will be hit hardest by the government’s tax changes
