The world view in Sydney is quite different than in New York. No one is worried or disgusted with the US government’s recent shutdown or debt ceiling follies – in fact only a few even comment about it. Likewise much of the anxiety American analysts suffer about the unemployment rate, weak GDP growth and “policy uncertainty” is completely absent. A glance at some of the figures can explain some of the differences. When the Great Recession rolled through the US and Europe, little happened in Australia. At the worst moment real GDP was up, not down, by one percent from 2008 to 2009; the unemployment rate is less than the US, and inflation is comparable to the US. The stock market is up about 15% year to date, a bit behind the 22% for the S&P 500. Maybe this is a reminder to Americans to spend less time worrying about the ineffectual US government.
All this shouldn’t suggest that down under no one ever thinks about the US. The newly nominated Fed chair is a topic of interest. As in America, people forget that the last three Fed chairman (Volcker, Greenspan and Bernanke) all demonstrated that the Fed can and will act when necessary. Questions hint that Janet Yellin could find little room for maneuver or be a lame duck from the start – not likely to happen. No one knows more about how the Fed work and how to make work than Janet Yellin. The other topic of interest is Obamacare – lots of questions and skepticism crops up in the news media.
China is a topic of interest all over, including in Australia. Unlike the US worries about a future world power, here the question is whether China’s growth and its appetite for Australia’s natural resources will fade. Recent numbers suggest there is not too much to worry about.
In any event, it is back to the US and the old worries next week.