1. Saudi Arabian journalist Jamal Khashoggi has been missing for 15 days. While the Saudi government initially denied knowledge of Khashoggi’s whereabouts, it now reportedly plans to admit to his murder and lay most of the blame on a two-star general, who has close ties to Crown Prince Mohammed bin Salman. Officials may say the general botched a plan to interrogate Khashoggi and accidentally killed him. Meanwhile, a member of the Saudi Royal Air Force who was a suspect in the alleged murder has reportedly died in a car accident in Riyadh. US President Donald Trump is still yet to acknowledge the Saudi government’s involvement in the saga but has said there would be “very severe” consequences if it turns out they had a hand in it.
2. The Australian dollar can’t break higher no matter how hard it tries. It came under renewed selling pressure on Wednesday, trimming earlier gains to close mixed for the session. The greenback was supported by safe-haven buying, largely due to renewed concerns over Italian budget negotiations and Brexit uncertainty as well as a steep drop in US and European stocks. At 8am AEDT, the Aussie was down 0.14% to 0.7098.
3. Two words: Leveraged loans. “If you want to worry about something in the next two to three years, this is it,” says Anton Pil, the head of JP Morgan’s $100 billion alternatives investing arm. The booming private credit market globally has seen an explosion in so-called leveraged loans which are typically given to companies that are already highly-indebted or risky. It might be one thing for Pil to be worried about it, but it turns out both the RBA and the Bank of England have suddenly started talking about this as an emerging risk. The Bank of England even noted that the market was the size of subprime mortgages before the GFC and had some similar characteristics in that there’s a lot of loose lending standards in the sector and the loans are getting repackaged into collateralised loan obligations, or CLOs. Read the full story.
4. Sayonara. The days of wild bidding wars at Sydney and Melbourne property auctions are now well and truly over as clearance rates reach lows not seen in years. In each of the past three weeks, less than half of all auctions across the capital cities have resulted in a sale. The recent downshift in clearance rates could mean there are larger price falls in Sydney and Melbourne before the downtrend comes to an end. More here.
5. UK Prime Minister Theresa May was told to resign after making an “outrageous” offer to extend the Brexit transition period. The proposed 12-month extension would cost billions of pounds in EU fees and leave Britain under European rules for almost six years after the referendum result. Conservative MPs are now calling on May to abandon her plans and make way for a new leader.
6. The RBA is failing on the most basic measures and it’s time it was held to account. That’s according to Stephen Koukoulas, a Research Fellow at Per Capita, who argues today on Business Insider, why the Reserve Bank is the only central bank on the world “seemingly obsessed with peripheral issues when the inflation target has been missed so comprehensively for so long”. More here.
7. Humans need to leave Earth or risk being annihilated by nuclear war or climate change, according to Stephen Hawking. Hawking, who died in March, wrote a collection of essays that were published this week. In Brief Answers to the Big Questions, Hawking wrote that people treat the Earth with “reckless indifference” that could result in our own extinction in the next 1,000 years if we don’t find another home.. He also said a catastrophic asteroid collision will certainly happen in the future.
8. Scott Morrison’s website has been taken over by trolls. Lifehacker Australia reports an internet prankster bought the www.scottmorrison.com.au domain name for $50 after the PM’s social media team forgot to renew the license. In what appears to be a very mild prank, the site has since been stripped of all content and now plays the punk ditty “Scotty Doesn’t Know” on a loop over a picture of Morrison’s smiling face. Have a look for yourself. And here’s the song that’s on repeat, in case you don’t know it.
9. The property downturn is the starting point for this week’s episode of our markets and economics podcast, Devils and Details. Our guest is prominent economist Stephen Koukoulas, managing director at Market Economics and a Business Insider contributor. House price declines are accelerating at the same time that global market volatility is picking up in a big way. Search “Devils and Details” wherever you get your podcasts, listen online here, or tune in below.
10. Do you know these people? A Facebook and Reddit search is under way after a GoPro lost on Great Barrier Reef for at least five years was discovered. American tourist John Michael Darrin discovered the damaged device while diving off the Far North Queensland coast. It was found nearly 10 metres underwater. Ironically, after finding it, he too lost the SD card after retrieving it from the camera, only to find it again a year later. “I’ve lost a GoPro myself, so I understand their feeling. I’d hope someone would try to return it as well,” he told the ABC.
BONUS ITEM: Is this cricket’s most embarrassing run-out ever? Pakistan’s Azhar Ali thought he’d hit a boundary. While he stood chatting to his batting partner in the middle of the pitch, Australia took him out. Watch it unfold here:
Have a great day.
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