Speech titles. You can tell a lot from the titles of Reserve Bank governor Glenn Stevens’ speeches. So what are we to make of his final two speeches for 2015, to be delivered a week apart from tomorrow?
The first is tomorrow night in Sydney to the annual dinner of the Australian Business Economists Group, and it’s entitled “The Long Run”. You’d expect it to take a longer-term look at our economy and prospects. But the governor has a handy way of segueing from the current to the prospective, which gives his speeches an interesting relevance and policy bite. The second speech seems clearer — it will be delivered in Perth the day after the RBA board meets for the final time this year (which is also in Perth). That speech will be entitled “Economic Conditions and Prospects”. So what about next year and 2017? Well, perhaps it should also be read in conjunction with the speech on November 5, and the one tomorrow. By doing that we will get a boardroom view of the economy and its prospects and it will be more confident than a year ago. And it will set the scene ahead of the federal government’s mid-year economic update. — Glenn Dyer
Investment boom (again?). The coming week also brings the start of the data releases for next week’s September-quarter national accounts. The most watched will be the construction work figures on Wednesday (watch for the impact of housing and commercial construction) and the private investment data on Thursday (down for the September quarter and perhaps higher for the rest of the financial year). In fact, the intended spending figures for the rest of 2015-16 will be the most important release because that will tell us if the nascent recovery in non-mining investment we saw in the June quarter is continuing. In fact the June-quarter third estimate of intended investment for 2015-16 was $114.8 billion, up 9.9% on the second estimate (the biggest increase in the third estimate of investment in five years, according to CommSec).
If there’s another solid rise in the total in Thursday’s report, we won’t see any more rate cuts in Australia because the RBA will feel that the record low rates and low dollar are at last boosting business spending. That growth in business loans is one of the reason why the RBA is more relaxed about the outlook — aided by the surprisingly strong growth in the labour market, low wage growth (the lowest real wage growth for private business employees in decades and a major headache for the budget), low inflation and solid consumption, as we have seen in the latest department store chain sales updates and car sales, which are heading for a new all time high. — Glenn Dyer
Ms Jobs goes where Rupert and the clan failed. Amplify is the online education and learning business developed by News Corp at a cost of more than US$1 billion, and abandoned recently for an undisclosed amount to an unknown investment group (after News took a US$371 million write-down on its value earlier in the year to prepare it for sale). On the weekend, Reuters reported that Laurene Powell Jobs, widow of Apple co-founder, Steve Jobs, was the lead investor who funded the buyout of Amplify. Reuters said that a representative for Powell Jobs’ organisation, the Emerson Collective, had confirmed the investment in Amplify but would not say how much of the company Powell Jobs would own, or how much was spent on the purchase. But it is known that Amplify’s senior management bought a minority position in the Amplify as part of the deal. Amplify was sold on September 30, at the end of News Corp’s first quarter. News got rid of more than 500 employees just ahead of the sale.
Reuters says Powell Jobs is the 23rd richest American (according to Forbes) with a fortune of more than US$19 billion (she could buy and sell the Murdochs twice over). She has also been a long time investor in education initiatives, starting her first project in 1995, two years before her husband returned to Apple and saved it. — Glenn Dyer