Budget Deficit

Aussie Property Bubble On A Scale Like No Other

The size of the Australian property bubble is old news. What is less well understood is how such a large and sustained bubble has distorted the Australian political economy. 

Doomed To Failure

In short, the U.S. economy may never reach “escape velocity” unless it is first allowed to crash.  It has been too larded up and larded over with debt for any real sustainable growth to take root.  More evidence, to this effect, was revealed this week.

Futures Fail To Rebound As Deutsche Bank Tries To Comfort Markets That It Is "Fine"

After yesterday's "Hillary rally" in the US, the overnight's session has seen more risk-on sentiment as European stocks advanced, ignoring weakness in Asia as investors followed every twist of shares of beleaguered lender Deutsche Bank, whose CEO last night assured Bill readers that the bank is not seeking a bailout, which however was contradicted by a Zeit article this morning reporting that Germany may seek as much as s 25% "bailout" stake in a worst case scenario.

Saudis Offer To Cut Production By 500,000 Barrels: "The Oil Market Situation Is Much More Critical"

Saudi Arabia offered to cut its oil output to January levels, as OPEC members seek ways to stabilize crude prices at talks this week in Algiers.“Saudi Arabia is ready to freeze production at the January level,” Boutarfa said, calling the offer “an interesting step.” Saudi Arabia pumped a record 10.69 million barrels a day in August compared with 10.2 million in January, suggesting the Saudis are willing to cut total output by half a million barrels. 

Italy Is The EU's Weakest Link

Italy’s economy is weak. There is no growth. The banking system is in bad shape. Unemployment is high. There is substantial public unrest, and Renzi’s standing is weakening. Italy has been somewhere between recession and stagnation since 2008. After eight years, the situation shows no signs of improving... The faster they get out of the EU the better.

Russia Cuts Interest Rates Whilst Maintaining Tough Monetary Policy

At a time when Russia has suffered a recession any other G20 Central Bank or government finding itself in such a position would surely focus on ending the recession, not on further reducing inflation from what is by Russian standards an already historically low level. Russia however is different.

Key Events In The Coming "Fed Blackout" Week

The spotlight turns to US data and Fed speakers ahead of the Fed blackout period this week. The BoE and SNB meet to decide policy but consensus expect no change from either. Elsewhere we get inflation data from the US, UK, Sweden & EZ (F), Q2 GDP from NZ & SW and labor market data from the UK & AU.

Incompetent But Not Weak: "The Fed Doesn't Know Whether To Shit Or Go Blind"

The outlook for the US economy is deteriorating, yet the Fed is trying to raise overnight rates to keep unseen inflation from rising. Success in its strategy could force consumption lower, unemployment higher, and exacerbate real output contraction. The market, however, should not underestimate the Fed’s power based on its apparent incompetence.