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."

Wednesday, September 22, 2010

Peter Martin is on a roll apropos the RBA

First my old friend Peter Martin covers this Tim Colebatch compare and contrast of the RBA Governor's rather varied views on the risks of a two-speed economy. He then makes the following interesting point on the basis of intelligence purportedly obtained directly from the RBA itself (I had myself opined that the market pricing made little sense to any sane observer):

"It is the first time board minutes have explicitly referred to the need for higher interest rates since December 2007, a declaration that was followed by two successive rate hikes taking rates to their highest point in more than a decade.

The Bank is determined that financial markets get the message that rates are likely to go up and stepped up the rhetoric because it believed they had failed to 'join the dots'.

It is particularly concerned that before the last board meeting the futures market was actually pricing in rate cuts when it should have been pricing in rate hikes."