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."

Tuesday, October 30, 2012

Australian iron prices now up 38% to US$120 from low when RBA decided to cut (chart)

Ooops. The RBA basically committed to cutting rates in October on the back of deep concerns it had in early September following a slump in Australian iron ore prices. On 4 September they hit a low of $86.9, which had the RBA well and truly freaking out. I told them to wait and see whether iron ore prices recovered in the ensuing months. All the main commentators reported that the iron ore price slump was going to be the key driver of an October rate cut. Many economists changed their call to an October cut following this media commentary (the RBA has subsequently tried to argue it was not just about commodity prices even though that is precisely what every single commentator said). The problem is that Australian iron ore prices are now 38% higher than their 4 September trough, having surged back to US$120....Iron ore prices are now back to where they were in July. So much for the falling commodity price thesis.


at 2:25 PM