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."

Sunday, January 30, 2011

Terry McCrann at his best is very, very good

Nicely put, Mr McCrann:

"Now there is zero prospect of a rate rise out of the Reserve Bank when it comes back from the summer break on Tuesday. Apart from the fact there is no economic justification for a rise, RBA governor Glenn Stevens is hardly likely to relish the title of Un-Australian of the Year.

Everybody got lucky with the low December quarter CPI numbers. They iced not just a February rate rise but at least a March one as well. After that though, the rate issue will go live.

Stevens and the RBA will not be waiting to see the imprint of any wages outbreak on actual inflation data. They would be seeking to pre-empt not just the inflation but the wages acceleration ahead of it. Especially, if all elements of a global uptick start to click into gear.

That said, the RBA knows only too well that conditions could still turn in exactly the opposite direction. That it remains possible, if not probable, that the next official rate move could turn out to be a cut.

One future sees hefty rate rises this year, thanks to the governnment's failure; the other a global double dip. Neither is particularly palatable."