The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Friday, August 27, 2010

Is the bond boom over? US jobless claims fall

Short and long-term bond prices all around the world have been rallying hard for the last coupe of months implying that long-term interest rates will remain incredibly low. This seems a little bizarre given that global growth is running at a fine pace and the developed world has clear incentives to inflate their way out of debt, which means eventually rates will rise. One particular oddity has been the correlation between short-term interest rate futures here in Australia and economic data in the US. It is as if investors feel that the world's economic fate rests with the US when then is far from true. The question is what data will serve as the catalyst for forcing investors to recognise that there has been a genuine decoupling between Australia and the US. Overnight, we had some good news: US jobless claims fell more than the most optimistic forecaster expected.