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Sunday, 21 January

17:35

A taxonomy of never-Trumpers John Quiggin

Im a sucker for taxonomies, and Ross Douthat has quite a good one in the New York Times

Like any strange and quarrelsome sect, the church of anti-Trump conservatism has divided and subdivided since Donald Trumps election. Some members have apostatized and joined the ranks of Trumpists; others have marched leftward, with anti-Trumpism as a gateway drug to wokeness. There is a faction that is notionally skeptical of Trump but functionally anti-anti-Trump, a faction that insists its just calling balls and strikes and a faction screaming that the president rigged the game and needs to be thrown out.

Whats interesting is that, from my observation, he has the factions about right in order of size. The group who have gone left is probably smaller than its ranking suggests, but contains most of what was left of serious thought on the conservative/libertarian side of politics. The smallest group, and the one treated most dismissively, consists of those who have remained politicaly conservative while being unremittingly hostile to Trump. Its members are either out of active politics already (like the Bushes) or are kicking Trump on the way out (like Corker and Flake). By 2020, it will probably be an empty set. That obviously raises the question of what will remain of the conservative movement when and if Trump is defeated.

A point of purely sporting interest is to classify Douthat himself. Id say, some mixture of anti-anti-Trump and balls and strikes. The main part of his column, arguing that Trump is more of a joke than a menace, is consistent with this, I think.

01:19

Business borrow again as economy picks up Pete Wargent Daily Blog

Lending up

There was a tidy +9.5 per cent rise in Lending Finance in November 2017 to $74.3 billion. 

This was the biggest monthly gain in several years, and a 12-month high for total lending. 

Businesses are borrowing again, which is good to see, with a +14.7 per cent monthly increase in commercial finance commitments. 


Personal lending has been trending moderately higher for the past 7 months.

Meanwhile, there's clearly been a shift from investors to owner-occupiers in the housing market.

And finally, loans to buy blocks of land soared to a record high of more than $8 billion in the month of November.


Victoria's population surge is clearly in evidence here.

The wrap

This is the latest in what is now proving to become a steady stream of stronger data releases.

Just look at what we've seen in only the past few weeks alone:

-record employment growth in 2017 of +404,000 (& a surge in the participation rate)

-record high jobs vacancies of 210,800 - easily the highest ever figure 

-record high value of building approved - a massive pipeline of commercial, infrastructur...

Saturday, 20 January

21:22

Free podcast Pete Wargent Daily Blog

Wow, weren't podcasts a growth industry in 2017?

Here's one worth listening to - in fact it's already become one of the most popular podcasts out there - Michael Yardney shares decades of wisdom on money, investing, and wealth.

Nice to hear a bit from Louise Bedford as well, I've watched her speak for the past three years in a row and always learn something new. 

Better still it comes with free resources and links (click on the image below).


Great stuff! Sign up for the free Property Update newsletter while you're there as well. 

17:01

Sunday 1pm Free Trees BBQ at Mary White Sustainable Living Armidale

[ Sunday, 21 Jan; 1:00 pm; ] This is a free feed social meeting for those that care about the habitat trees of UNE. Also feel free to bring something to share drinks, food, and fun things. Where: Mary White College When: 1pm Sunday 21st January Cost: Nil Here are some video of the Save UNE habitat trees campaign. [embed width="520"]https://youtu.be/DbHHPFIA5J8[/embed] [embed width="520"]https://youtu.be/Ws21Xa3uEDE[/embed] full article 

17:00

The Weekend Quiz January 20-21, 2018 answers and discussion Bill Mitchell billy blog

Here are the answers with discussion for this Weekends Quiz. The information provided should help you work out why you missed a question or three! If you havent already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of modern monetary theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.

Question 1:

The central bank can influence the supply of money via the price it provides reserves to the commercial banks but this influence is compromised by the level at which it sets the target monetary policy rate.

The answer is True.

The facts are as follows. First, central banks will always provided enough reserve balances to the commercial banks at a price it sets using a combination of overdraft/discounting facilities and open market operations.

Second, if the central bank didnt provide the reserves necessary to match the growth in deposits in the commercial banking system then the payments system would grind to a halt and there would be significant hikes in the interbank rate of interest and a wedge between it and the policy (target) rate meaning the central banks policy stance becomes compromised.

Third, any reserve requirements within this context while legally enforceable (via fines etc) do not constrain the commercial bank credit creation capacity. Central bank reserves (the accounts the commercial banks keep with the central bank) are not used to make loans. They only function to facilitate the payments system (apart from satisfying any reserve requirements).

Fourth, banks make loans to credit-worthy borrowers and these loans create deposits. If the commercial bank in question is unable to get the reserves necessary to meet the requirements from other sources (other banks) then the central bank has to provide them. But the process of gaining the necessary reserves is a separate and subsequent bank operation to the deposit creation (via the loan).

Fifth, if there were too many reserves in the system (relative to the banks desired levels to facilitate the payments system and the required reserves then competition in the interbank (overnight) market would drive the interest rate down. This competition would be driven by banks holding surplus reserves (to their requirements) trying to lend them overnight. The opposite would happen if there were too few reserves supplied by the central bank. Then the chase for overnight funds would drive rates up.

In both cases the central bank would lose control of its current policy rate as the divergence between it and the interbank rate widened. This divergence can snake between the rate that the central bank pays on excess reserves (this rate varies between countries and overtime b...

16:00

Australian Dollar and Bitcoin "IndyWatch Feed Crypto"

1.00 AUD = 0.00006 BTC
0.00010 BTC = 1.60 AUD
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