Macro Investor Volume 1, Number 19

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The world is awaiting the results of the US presidential election on Tuesday and while plenty of Americans would prefer a Republican in charge, the markets – fed by expectations of fiscal largess and monetary accommodation – are this time undoubtedly voting for the left-wing candidate. All well and good of course for as we wrote last week, Obama’s policies will likely result in stronger growth and a lower deficit, but there’s still no small amount of fear over the ramifications of a fiscal cliff, not to mention a still-tepid US recovery anyway.

It’s a similar situation in Asia. An undoubted reformer in the form of Xi Jinping is likely to be formally announced as head of Chinese Communist Party at this week’s 18th National Congress, but despite an emerging direction towards a more sustainable future for the world’s second-largest economy, there’s still a lot of mess to clean up from the infrastructure and property excesses of the past twenty years.

And don’t forget Europe or Japan either. While a liquidity crisis has been averted in the EU and signs of a more resolved economic leadership are developing in Tokyo, both of these huge economies are still facing a fiscal solvency crisis that will be difficult to emerge from with a fast-ageing population.

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In times like these you can’t blame markets for being bearish and while, for a change, we do expect things to get better in the
short-term, we’re still very much cautious about the long-term.

The new edition looks at two oil stocks that may benefit from the passing of the Presidential cycle, as well as two health care stocks with significant Australian dollar exposure. We also cover the long term demographics of housing, how to add property to your SMSF, as well a offering guide to the use of levels in chartology. And more.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.