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."

Saturday, January 21, 2012

Bayley on RBA's dilemma

Mark Bayley highlights the conundrum I pointed out in my column this week. If core CPI prints very low you could see them cutting 50 to allow the banks to claw-back margins OR not cutting at all and waiting for more visibility on global growth given rates are already stimulatory. I don't know anyone forecasting a really high core, with UBS the top of the pops at 0.65:

"Will (the employment data) have a material impact on the RBA’s thinking? Probably not; maybe a raised eyebrow. Of more importance will be next week’s CPI data. In addition, the significantly higher cost of bank funding will be the cause for some major head scratching at the RBA. It is becoming increasing evident that the banks will not fully pass on any rate cuts. So the RBA has to decide whether to cut by more so that it can get at least some impact on the mortgage market or decide that any move is just futile. I think that the RBA will be in the former camp."