The Dismal Science (The Australian Institute of Company Directors)

Australia is officially out of recession but GDP is still well down year-on-year. The RBA says it's 'ready to do more if necessary'. Plus, more good news on the vaccine and what's going on with Australian coal exports to China.

The yen has plunged to a 34 year low requiring the Bank of Japan to spend billions to prop it up. Why are hedge funds attacking the yen? Plus, we preview the budget, higher for longer interest rates in the US and a weak retail sales number.

The RBA keeps interest rates on hold, but the big news is a change in tone that suggests Mark's long predicted February rate cut is back on the table.

Also, Mark looks back at his predictions from a year ago, revisiting his forecasts for inflation, unemployment, and economic growth.

Get your ticket to AGS: https://www.aicd.com.au/events/australian-governance-summit.html

Subscribe to Mark's weekly column here: https://www.aicd.com.au/news-media/economic-weekly.html

The Reserve Bank has set out three scenarios for the Australian economy depending on how we go over the next six months in curbing the coronavirus. Plus the horror US jobs report, retaliatory China tariffs and confidence in Australia picks up.

We're a little late getting this one out. Apologies to our loyal listeners. We recorded this last week before the Australian jobs numbers were released. We'll have another episode out later this week covering those.

We're back, and we force Mark to take a victory lap for his February rate cut prediction! We dive into the details of the RBA's decision and its implications for future cuts.

Then, we dissect the market freakout following the release of Deepseek's open-source AI model. What does it say about AI market leaders’ valuations, the effectiveness of export controls and the future of AI?

Finally, we discuss the return of "Tariff Man" and the potential for a Smoot-Hawley moment.

With fears it may once again be on the rise, we talk all things inflation. What causes it? Why is it bad? And is it coming back? Plus, how much slack is left in the labour market and has the fun stopped for GameStop?

The US and Europe experienced ugly contractions in the second quarter, though China seems to be out the other side. Plus what the Victorian restrictions mean for the rest of the economy, the resilience of Australian exports and Zoom fatigue.

This week, Raphael and Mark dissect the latest inflation data and react to recent rate cuts, examining whether the soft landing declared by the IMF is truly secure.

Mark shares a sneak peek of his upcoming article in Company Director magazine, outlining eight key global uncertainties that could derail the current economic outlook.

They explore topics such as diverging central bank rate paths, the impact of a potential Trump administration, the fraying rules-based international system, demographic transitions, technological revolutions (AI, bioscience, energy), the energy transition, state-based armed conflict, and domestic political uncertainty.

Despite the risks, is there room for optimism, or are we heading towards a "G-Zero" world?

Read Mark's weekly newsletter here: https://www.aicd.com.au/news-media/economic-weekly.html

Central bankers turned philosophical at last week's annual Jackson Hole conference as they contemplated the mistakes they have made over the last two years. Plus, the incoming Reserve Bank governor talks climate change, inflation continues to come down and the stifling effect of high interest rates on innovation.

Self-described anarcho-capitalist Javier Milei has won the Argentine presidential election. Do desperate times call for desperate measures as Argentina looks to escape hyperinflation? Plus, the RBA board worries about its credibility and the OpenAI board worries about the future of humanity.

Ivan's had another audio fail this week. Apologies. We know you come for Mark anyway.

We’re taking a break from our usual format to look at some of the big technological and economic themes of 2024, and where they are going in 2025 and into the future.

• Mark and Raph discuss the explosion of AI and where it might be headed, as well as its impact on financial markets.
• We contemplate what might constitute the next big wave of global innovation.
• Will AI prove to be transformative or merely a sustaining innovation?
• And could the changing geopolitical landscape mean the end of hyper-globalisation?

We will be back with our regular episodes in February. 

If you enjoyed or hated this episode, we’d love to hear your feedback! Send us an email:

podcasts@aicd.com.au

Central banks across the globe have been lifting interest rates over the last week. The RBA is almost certain to do the same at its upcoming meeting, but how high will the rate rise be? Plus: major moves for stocks and bonds, recession fears in the US and the British pound sinks to a record low. 

For this comeback episode, we catch up on the latest economic data, Ivan asks for a pay rise and we dive into the census.

Australia's flash Purchasing Managers' Index has fallen into contractionary territory. Is it a sign of a slowdown to come? Plus, we preview this week's Jackson Hole monetary policy jamboree.

The China economy is creaking. Could the crash be coming and what can the authorities do to stop it? Plus, the market questions the RBA, lockdowns hit the job market and how COVID impacts football performance.

As tensions increase between China and Taiwan, we look at the risks for the global economy. Plus, business and consumer confidence continue to diverge and US inflation eases.

With Narendra Modi's visit to Australia, we ask if economic diplomacy actually works. Plus, the debt ceiling draws closer and the AI boom gathers steam.

With wars in Ukraine and the Middle East, the world has become a more dangerous place. How should boards be thinking through the fracturing global order and geopolitical risk? Plus, the RBA sounds a hawkish note and a mixed jobs report.

More heartbreaking jobs numbers, the mystery of why sharemarkets are so high when the world is so low and directors call on the government to get radical.

It's another long one this week. We've divided the topics up into chapters again. If you skip forward, we won't hold it against you.

The US Fed 'skips' hiking this month but hints there's still more to come. Plus, the Australian labour market continues to boom even as confidence slides. The Dismal Science will now also be pausing for a few weeks as Mark is on holidays. Back soon.

"Everything Evergrande owns belongs to the Party and the Chinese people," Evergrande Chairman Hui Ka Yan once said. Will the Chinese people now own the crashing property company's $300bn of debt or is China headed for a financial crisis? Plus, housing affordability, monetary tapering and vaccinating the world. This is a long one but we're taking next week off so listen at your leisure.

We take a break from regular programming this week to bring you a conversation from the Australian Governance Summit between Mark and Harvard Business School professor Rebecca Henderson on her book Reimagining Capitalism in a World on Fire.

With Mark back from holidays, we catch up on the RBA's historic rate cut early this month and do a Nobel edition of the number of the week.

The RBA is expecting the economy to bounce back in December but should the halting recovery of other more open economies around the world be tempering our optimism? Plus, is the China property bubble about to burst?

The RBA has lifted the cash rate for the first time in more than a decade. How much more is there to go? And is there a risk of a hard landing if they go too quickly?

The latest confidence numbers tell a tale of two Australias as the bickering continues over the national COVID strategy. Plus, the case for board diversity.

Mark says Treasurer Frydenberg has found the new fiscal religion on debt and deficits, plus weak inflation, jobs come off as JobKeeper ends and the latest from our own Director Sentiment Index.

We look at the wide-ranging work of Caludia Goldin, this year's recipient of the Nobel Prize in economics specifically "for having advanced our understanding of women’s labour market outcomes”. Plus, we catch up on Michele Bullock's first meeting as RBA governor and what the waning of Pax Americana might mean for the global economy.

The RBA will now speak with multiple voices with all board members expected to speak to the public. Will this lead to greater transparency or muddy the waters further? Plus, more bumper jobs growth, the MYEFO reveals another jump in tax receipts, Milei takes his razor to Argentine spending and another COP climate conference goes by.

Live at last week's Australian Governance Summit, we asked what could be done about Australia's languishing productivity: can policy make a difference? Will AI save us? Could it be as simple as building more houses? Plus, a first rate cut might be nearing and an extraordinary plunge in the jobless rate.

Regular listeners will notice some snazzy new cover art this week. Thanks to our fantastic designer Jana Clark and photographer Graham Jepson for the fresh look.

We answer five big questions in the aftermath of the Silicon Valley Bank collapse:

• What happened at Silicon Valley Bank?
• Did the authorities get the response right?
• What even is a bank for?
• Is the Fed to blame?
• Could this happen in Australia?

The 'eye-watering' debt and deficit numbers released in the mini budget, the government extends JobKeeper, the RBA governor takes aim at Modern Monetary Theory, and the coronavirus spike in Victoria and NSW continues to weigh on confidence.

The IMF has released its latest forecast for the world economy, and the outlook is pretty grim. What does slowing global growth mean for Australia? Plus, fresh consumer confidence numbers, this year’s Nobel Prize winners, and what does the Census tell us about Australian’s working habits?

Unemployment keeps ticking down but wages still aren't moving. So is the relationship between unemployment and inflation broken? Plus, the latest confidence numbers, productivity in the care economy and BitCoin's wild ride.

In this episode, recorded in early December, Stephen and Ivan look ahead to 2018. Will the Reserve Bank continue to stay its hand? Will wages growth finally pick up? And what's the outlook for the Australian and global economies?

Confidence numbers are up and people are feeling optimistic as we approach the end of the roughest of years. Plus, tourism post-COVID and is Facebook a monopoly?

Australia's economy is now larger than it was pre-pandemic but the slow rollout of the vaccine continues to threaten the recovery. We dig into the latest GDP numbers and ask if we need more incentives for people to get jabbed. Plus, house prices, the Victorian lockdown and the RBA says watch this space.

The world is facing a period of prolonged stagflation akin to the 70s, according to the World Bank. Are there any reasons for hope amid the ongoing global omnicrisis? And what lessons can we take from the 70s experience? Plus, the Reserve Bank's biggest rate hike in two decades and what to do about gas prices.

The vaccine rollout troubles continue as the government abandons its target. Is it time to downgrade forecasts? Will Australia be cut off from the world? And are we getting our risk calculus wrong? Plus, the latest confidence and jobs numbers.

Treasurer Jim Chalmers has delivered the first budget surplus in 15 years, helped by the boom in jobs and commodity prices. The government has used the windfall to deliver a cost of living package targeted at the most vulnerable, but will the spending stoke inflation and prove counterproductive? Plus, the US is again facing a debt ceiling crisis and we say vale to the great Allan Gyngell AO.

Special guest Jamie Smyth of the Financial Times helps Mark and Ivan make sense of the Brexit omnishambles.

This episode was recorded on 4 September, the day after Boris Johnson's government lost its majority in the House of Commons and the morning of the start of the fourth Ashes test.

The grim IMF forecasts, record low job vacancies, what the Victorian spike means for the national economy and a very wonky discussion on the future of monetary policy.

The COVID recession will leave Australia permanently poorer and its population smaller than it otherwise would have been. But are there choices we can make that will help us catch up? Plus a catch-up on the recent economic numbers after our break and the AICD's latest Director Sentiment Index.

We look at the latest GDP data from Scandinavia and ask whether Sweden has gotten the benefit of a more lenient approach to lockdowns. Plus RBA Governor Philip Lowe responds to his critics.

For our first episode of the year, we look ahead at the five big questions for 2023:

1. Will the RBA keep hiking rates?
2. Will there be a recession in the US?
3. Will the Chinese economy recover now that the zero covid policy has been abandoned?
4. Will the war in Ukraine continue to disrupt the global economy?
5. Is crypto done? 

With the passing of Robert Lucas, the champion of rational expectations theory and one of the most influential economists of the last 50 years, we ask whether his legacy holds up. Plus, with unemployment edging up, consumer confidence down and wages continuing to disappoint, we look ahead to the RBA's June meeting. 

Stephen and Ivan talk inequality.

The IMF says the outlook for global growth is increasingly gloomy and uncertain, Australia's productivity growth is its lowest in 60 years, the Reserve Bank continues to hike rates and the US is in recession. We're not called The Dismal Science for nothing.

New Zealand economist Roger Dennis advises boards globally on long-term thinking and foresight. We spoke to him on how directors should think about the seemingly endless proliferation of risks, what he calls the paradox of preparedness, and whether Kiwis, living on the edge of the world, have a unique perspective on risk.

For more of Roger's thinking, visit his website.

The shut down of the construction industry is another hammer blow to the NSW economy. Are policymakers doing enough to soften the impact? Plus, vaccine hesitancy and we ask if hosting the Olympics is worth it.

Is the situation in Sri Lanka a harbinger of an emerging market debt crisis? We look at the pressure emerging markets face from rising costs and interest rates. Plus, we catch up on the extraordinary unemployment result for June, the RBA review and the mortgage boycott in China.

This week, we examine Australia's latest soft GDP figures. The headline number is a weak 0.3% quarterly expansion, the lowest rate of annual growth since the pandemic with private sector demand contributing nothing to this meager growth figure.

Will the RBA stay the course with rates on hold in the face of a deepening per capita recession and falling living standards?

We also look at what's driving Australia's poor economic performance relative to other OECD nations.

Get your ticket to AGS: https://www.aicd.com.au/events/australian-governance-summit.html

Subscribe to Mark's weekly column here: https://www.aicd.com.au/news-media/economic-weekly.html

We run through the latest labour market data and ask whether it's ok for a Prime Ministerial candidate not to know the unemployment rate. Plus, business and consumer confidence, US inflation and how far might house prices fall?

Trade with China continues to flourish despite strategic and political tension. Does Chinese Premier Li Qiang's visit to Australia mean we can continue to, as the Chinese saying goes, pull strongly against the raging tide? Plus, hawkish sounds from the RBA as the path grows ever narrower and the effect of WFH on real wages.

Mark and Ivan discuss how bad the coronavirus crisis could get, what the impact might be on GDP and whether there is hope for flattening the curve.

The budget position is better than expected and treasury forecasts are rosy for the Australian economy. Are they overly optimistic given the uncertainty in the world? Plus, retail sales rebound from omicron and the yield curve inverts again.

What is a K-shaped recovery and are we in one? Plus we preview the budget that Prime Minister Morrison is calling the most important since World War II.

What the hell is an inverted yield curve and should we be worried?

This episode was recorded on 22 August.

An OECD simulation warns of a 1 percentage point hit to global growth from the war in Ukraine, consumer confidence dives on cost of living concerns and we preview the budget.

Are there any positives to take from the latest GDP numbers? Is the RBA about to embark on QE? And is the property market back?

The white smoke is billowing from Martin Place, we have a new RBA governor. So who is Michele Bullock? And what will Philip Lowe's legacy be? Mark is still on leave so Bennett joins Ivan to answer these questions.

To hear more of Bennett, listen to our new podcast, Boardroom Conversations, where he talks to some of Australia's leading directors aicd.com.au/news-media/boardroom-conversations

Paul Keating said when the government changes, the country changes. But does the economy change? We ponder the economic implications of the election. Plus, people are moving jobs again, capex goes backwards and China's slowdown.

In Switzerland, they had brotherly love, and they had 500 years of democracy and peace, and yet their second largest bank has still collapsed. What went wrong? It's a story of fraud, spying, kickbacks, Bulgarian drug-dealers and all-round Suisse poor risk management. Plus, the Fed keeps hiking through the turmoil, do bailouts sow the seeds of the next crisis, and JPMorgan is left holding a bag of rocks.

Apologies for Ivan's terrible audio in this episode. He was reporting from deep under the water where you can find Credit Suisse's AT-1 bonds.

Inflation eased off in the first quarter of the year and we appear to be past the peak. So will the RBA continue to leave rates on hold next week? Plus, more on the tight rental market.

Could this recession leave permanent scars on the economy? Plus the Victorian COVID spike dents confidence, the turn in the job market, the Fed buys Apple bonds and twenty years of the GST.

With new data out on the Australian corporate footprint overseas, we ask what's the future of the foreign outpost in a post-pandemic world. Plus a speed round on this week's economic data.

The markets are expecting the RBA to pause the rate hikes next week with the global financial turmoil and inflation seemingly having peaked. Is Philip Lowe finally going to ease up on the beleaguered Australian mortgage holder? Plus, Deutsche Bank credit default swap shenanigans and we ask if the AI productivity revolution is already here.

It's another bumper quizmas episode. We score Mark on last year's quiz, look ahead to 2022 and run through The Dismal Science summer reading list. Plus, the final extremely strong jobs numbers for 2022, Biden's troubled stimulus bill and the MYEFO. We'll be back with more episodes in late January.

Monthly inflation numbers have come in hot, adding pressure on the RBA to lift rates.

What does the upcoming French election tell us about Britain, bonds and post-covid fiscal policy?

And does the much hyped Guzman Y Gomez IPO and subsequent share price pop suggest that burritos are recession proof? 

The RBA has raised rates, but it was a smaller hike than many were expecting. What could the Reserve Bank be planning for next month? Plus: the debate around “Stage Three” tax cuts, a surprise policy U-turn in the UK, and more uncertainty for China’s beleaguered property sector. 

Mark regales us with the vibe on the ground in Canberra. Plus, an around the grounds on:

• RBA Minutes

• Core logic house and rent price data

• Retail sales numbers

• Job ads

And the number of the week this week asks: if climate change results in supply shocks become increasingly regular to the point of predictability, should food inflation still be excluded from core inflation numbers?

This week we are joined by Su-Lin Ong, Managing Director, Chief Economist & Senior Corporate Relationship Manager of RBC Capital Markets. Together Mark and Su-lin reflect on Australia’s economic conditions and the RBA’s 2024 performance.

They unpack why the RBA has held interest rates steady for so long – and what this means for Australia’s economic outlook, including a (mild) disagreement on the outlook for interest rates. Plus, they discuss the impact of a new US administration, the RBC's unique projections, the global easing cycle, and how Australia stacks up against the rest of the world.

Subscribe to Mark's weekly column here: https://www.aicd.com.au/news-media/economic-weekly.html

With almost half of Australia's population plunged back into lockdown as the Delta variant spreads, do we need to revise the rosy forecasts from earlier in the year for pandemic recovery? Plus, a job vacancy boom, house prices keep going and European tourism.

Australia's unemployment rate has fallen to 5.1%, below the pre-pandemic level, and approaching a 'four in front of it', the target level for the government. So what's next for policy and will wage growth follow? Plus, inflation comes roaring back in the US and an Australia-UK free trade deal.

Australia's GDP contracted in the first quarter and Australia is now in its first recession in nearly thirty years. Are there any positives we can take from the latest GDP data? Plus New Zealand eliminates coronavirus and Ivan gets a test.

We're late getting this one out but we will be back to our regular schedule with another episode this week.

This week, the Dismal Science turns its attention to Europe’s economic powerhouse - Germany.

We examine the country's recent economic struggles, exploring the reasons behind its faltering performance, including the war in Ukraine, rising energy costs, and the rise of Chinese manufacturing.

We discuss whether these challenges are merely cyclical or point to deeper structural issues with the German economic model.

With a shrinking workforce, rising fiscal pressures, and declining global trade, is “Germanification” a cautionary tale for other advanced economies, including Australia?

We also examine the impact of China's growing dominance in key industries, particularly the automotive sector, where Chinese companies are now leading the world in EV production. Can Germany adapt and compete, or is its era of economic dominance over?

This year's budget embeds the fiscal revolution that began last year. We look at what's in this big spending budget and whether the debt is sustainable. Plus, the RBA's latest forecasts and US jobs disappoint. Apologies for Ivan's awful audio this week - we had some technical difficulties recording remotely.

The big news this week is the US presidential election. Markets are reacting in real time as results come in - we look at the volatility and what it means for Australia.

Closer to home, the Reserve Bank of Australia (RBA) left interest rates unchanged for the eighth consecutive month.

We examine the RBA's latest forecasts, which suggest a slightly softer economic outlook than previously predicted, with lower GDP growth, higher unemployment and slower inflation.

But is this bad or good when it comes to taming inflation?

Mark explains why this could actually be good news for those hoping for an interest rate cut.

Also on the agenda: the role of government spending in keeping the economy afloat, and whether now is the time for businesses to start investing.

A Cook's tour of the global economy: we take in the European malaise, the Trump spectre over the US, the China shock 2.0, and a resurgence in migration.

Industrial policy is making a comeback globally and Australia wants in on the action. Boosting supply chain resilience, accelerating the net zero transition, and mitigating geostrategic risk are touted as key benefits. But does it stack up economically? Plus, new stricter merger rules and more mixed confidence results.

It's another bumper quizmas episode. We score Mark on last year's forecasts and gaze into the crystal ball to see what's ahead in 2024.

Thank you to all of our listeners. Have a great break! We'll be back in January with more epsiodes.

"Australia's economy hit the wall in the September quarter," according to Westpac economist Andrew Hanlan. Disposable incomes have declined steeply and consumer spending is weak. Have the rate cuts done their job now? Could the next move be down rather than up? Plus, Venezualan revanchism and Guyana's oil and gas boom.

The boom in jobs continues in Australia and consumer confidence is bouncing back, but does this mean another rate rise is on the horizon? Plus, US inflation, Sydney NIMBYs and the IMF's gloomy forecasts for the global economy.

A rapid fire episode as Mark and Ivan both battle colds.

Job vacancies are at an all-time high, yet there is still slack in the labour market. Is the economy getting worse at matching workers to jobs? Plus, confidence slips back, the G7 agrees to a global minimum tax and is Biden's infrastructure package a stimulus bridge too far.

Australia's growth will slow and its population age over the next forty years, putting pressure on the budget and more generally our standard of living, according to the government's latest Intergenerational Report. What can we do to jolt Australia out of this growth and productivity malaise? Plus, BRICS talk dedollarisation, Argentina talks dollarisation, and the case for bringing back the proper office.

The budget heralds a new fiscal era, according to Mark. We look at the record debt and deficit numbers, the 'heroic' forecasts and the policies the government is betting on to restore growth.

We parse the latest statements of the RBA and US Treasury Secretary Janet Yellen for hidden meaning on the recovery of the economy. Plus, house prices, a budget preview and sin taxes.

As more of Australia goes into lockdown, the RBA is maintaining what some are describing as a 'bizarrely' optimistic view of the recovery. Plus, a weird jobs report and the OG gold standard.

Biden looks home but it's close. Did the polls get this one right or wrong? How have markets reacted? And what are the prospects now for a much needed stimulus package? Plus, the RBA wakes from its 'monetary slumber' and announces its first foray into quantitative easing. Is it now out of ammo?

Stephen and Ivan do a close reading of RBA governor Philip Lowe's latest speech on the labour market.

The federal budget is out next week. What should we expect the Treasurer to announce on Tuesday night? Plus: fresh employment numbers, insights from the Director Sentiment Index and China's delayed GDP data.  

Australia has just experienced its worst deflation in 70 years. Should we be worried? Plus falling confidence, a rising dollar, more job losses, paid pandemic leave and the Robinhood effect.

The Delta lockdowns have caused widespread job losses and decimated consumer demand. Were economic policymakers inadequately prepared for the downside risks of a new COVID strain? Plus, Q2 GDP, takeaways from this year's Jackson Hole conference, and the Taliban economy.

We talk to directors about their outlook for the economy and the challenges they're facing, we catch up on this week's RBA and Fed news, and we ask if Australia is investing enough in AI.

As criticism builds, the RBA has reviewed its forward guidance given during the pandemic. Has it permanently undermined its credibility? And how will it communicate to the public in future? Plus, the Australian economy keeps adding jobs, wages might finally be moving and a Korean credit crunch.

A record number of Australians lost their jobs in April and now one in five workers is either unemployed or underemployed. Plus the RBA's thinking on the property market, will working from home change the CBD and a rare cameo from our former Chief Economist, Stephen Walters.

Surging prices, war in Ukraine, the spectre of nuclear conflict – how worried should we be? This episode was recorded live last week in Melbourne at the Australian Governance Summit.

Another rate rise brings the total tightening to 400bps in just over a year. Add in the disappointing first quarter GDP growth and this week seemed like a tipping point for the Australian economy. Are things about to get worse before they get better? Plus, the regulators come for crypto.

Surprise good news on the jobs front with unemployment falling below 7 per cent for the first time since the pandemic started. So where are the jobs coming from? Plus house prices, the US fed commits to not lifting interest rates for the long haul, New Zealand goes into recession and the effect unemployment on sleep.