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."

Thursday, August 26, 2010

RSPT and global uncertainty hit capex and GDP, but outlook positive

The capex numbers surprised on the downside. Craig James at CommSec commented, "Australian companies cut investment in the June quarter, probably in response to uncertainty on the mining tax and the outlook for the global economy." Westpac added:

"Q2 CAPEX surprised on the low side, coming in at –4.0% (mkt 2.3%, Westpac 4.0%). The equipment number is what counts - as it feeds into the national accounts. That also surprised on the low side, at –4.1% (mkt 4.0%, Westpac 4.0%). Such a fall will subtract 0.3ppts from Q2 growth."

But, the forward plans were much more positive than expected. Dow Jones summarised it thus:

"0213 GMT [Dow Jones] Despite soft headline number, forward projections for Australian capex are "very, very strong," says JPMorgan economist Helen Kevans; Australian business investment in 2Q off 4.0% on quarter vs expected 2.0% rise. Notes companies planning major spend despite fuss over planned new mining tax; "this will have very positive implications for employment and jobs growth and investment growth." Says soft headline number does pose some risk to GDP, but overall outlook positive."