Sunday Supplement: 31 May, 2020

  Albert Tucker, ‘Image of modern evil’, 1945, National Gallery of Victoria     Macro & Markets China debt: bond problems could still resurface in 2020 after defaults amid coronavirus lower than expected – SCMP The Great Depression, coronavirus style – AsiaTimes Donald Trump says the US is ‘terminating’ its relationship with the World Health

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Weekend Reading: 30-31 May 2020

Global Macro / Markets / Investing: Markets fall as Trump plans to hold a news conference Friday on China – The Hill Plunging solar energy prices spell bright future for clean electricity – DW A Universal Basic Income is Essential and Will Work – DW Fed Why Main Street is bleeding while Wall Street Soars


Macro Afternoon

A flat end to the week as the window dressing month end meme takes place across risk assets with most stock markets pulling back here in Asia. Besides the usual end of month reshuffle, risk is still waiting Trump’s policy announcement on China, but it seems he’s too busy having a dummy spit about Twitter


SA policeman puts jackboot on Hong Kong

Via the ABC: SA Police has launched an investigation into a photo which purportedly shows one of its uniformed police officers supporting Hong Kong’s police force. The photo, which features in an International Police Association (IPA) magazine, defends the conduct of Hong Kong Police during the protests last year, despite claims from protesters that officers


Bannon: World must stop China in Hong Kong

Via The Wire comes Steve Bannon: Q. On Thursday, Beijing announced that it was planning new national security laws that could give China’s leaders greater control over Hong Kong and undermine civil liberties in the semi-autonomous territory. This looks like a bold move by Xi Jinping and Beijing’s leaders aimed directly at anti-government protests and


Aussie credit growth screams deleveraging

Via the excellent Damien Boey at Credit Suisse: Credit growth surprises materially to the downside. Bank credit was unchanged in April, compared with the Consensus forecast for 0.6% monthly growth. Year-ended growth slowed to 3.6% from an upwardly revised 3.7%, versus expectations for a pick up to 4% . Compositionally, business and housing credit rose moderately, while personal credit fell. Arguably the


Keen versus Gurner to distract Switzer investors

Bloody Switzer won’t leave poor Steven Keen alone: WATCH | SWITZER TV PROPERTY: “Dr Doom” Steve Keen and Tim Gurner join @PeterSwitzer on our latest property [email protected]#Investing #Property #Economy #Money #Finance #HousePrices #RBA #COVID19 — Switzer (@Switzercomau) May 29, 2020 Roll out the housing bear to distract investors from this underperforming ETF:


Mortgage repayment cliff beckons

A Senate committee has been told that businesses and households have now deferred around $250 billion worth of loan repayments due to the coronavirus pandemic. However, Australian Prudential Regulation Authority (APRA) chairman Wayne Byres conceded that some customers will not be able to repay their loans when they are required to resume repayments: Australian Prudential


Vale Hong Kong as CCP overlords take control

China’s National People’s Congress has approved a draft resolution that paves the way for anti-sedition laws to be enacted in Hong Kong. The laws will end Hong Kong’s autonomy by banning “acts and activities” considered to be a threat to China’s national security, and will permit “national security agencies” to operate in Hong Kong. The


Twitter should fact check Kouk

All day, every day he demands more stimulus: A lesson from England for the RBA and government in managing economic policy in the deepest recession since the 1930s https://t.co/vKqeqg8k9X — Stephen Koukoulas (@TheKouk) May 29, 2020 While berating government debt: Government debt just hit a fresh record high: $658.3 billion. Up from a tiny $273


Australia’s CCP apologists burn

“Australia” has had a near-death experience, at The Australian: Australia’s current ambassador to China gave the green light to Victoria to sign on to President Xi Jinping’s signature Belt and Road Initiative, which has been criticised by Scott Morrison. The Australian can reveal that Graham Fletcher, then a senior Foreign Affairs official, told the Victorian


CBA: Huge fiscal stimulus props up household income

Gareth Aird, head of Australian economics at CBA, has published research on the extent to which household impacts have been supported by the federal government’s stimulus: Key Points Growth in government benefit payments has accelerated due to both the number of people receiving JobSeeker as well as the doubling in the fortnightly JobSeeker payment. Growth


Andrew Liveras disgorges dog’s vomit on energy

At the AFR the bogus debate rolls on: The controversial proposals from the Andrew Liveris-led manufacturing taskforce would take government involvement in the gas supply sector to a new level in Australia and have set the scene for a renewed clash between manufacturers and gas producers over prices. …Engendering most debate in the draft report


Bank bid blows up

The Australian dollar is hovering at the highs this morning even as S&P futures fall: Bonds are firm: XJO has gapped lower at the open: Big Iron is up: Big Gas down with oil’s struggles: Big Gold is warm as DXY softens: The Big Bank bid has run into a big reversal. The whole value


Telstra divides and conquers NBN

History doesn’t repeat but it sure does rhyme. In 2011, the Gillard Government agreed to pay Telstra $9 billion in instalments for its fixed line customers to migrate to the National Broadband Network (NBN). This decision was made, in part, to remedy the structural mess made by the Howard Government when it privatised Telstra in


The Great Bears do the bear market rally

Cross-posted from ZeroHedge is a fabulous post gathering together the world’s great bears. Albert Edwards admits he is “perplexed.” Writing in his latest Global Strategy report, the SocGen strategist admits that “until recently (ie the last few days), I had thought that the 35%+ rally in the S&P from its 23 March 2190 low would


Lies, damn lies and international students

The education lobby has been caught out exaggerating the collapse in international students, which according to Department of Education data, is actually not that large: Only about 121,000, or 20 per cent, of some 606,000 primary student visa holders were stranded outside Australia on 17 May… The figures, which have not been released publicly, show


Macro Morning

By Chris Becker  The risk edifice continues to push higher, helped along by a reduction in continuing jobless claims in the US even though all the other economic markers show the world’s biggest economy in a deepening recession. Wall Street stumbled at the finish due to some Trump remarks with US Treasury yields rising slightly,


Australian dollar enters the MMT era

DXY was weak last night as EUR chases the fiscal package: Australian dollar was weak anyway: EMs were mixed: AUD/SPX correlation had an up day but is trending lower: Gold was firm: Oil too: Dirt is crushed: Except the red magic dirt. Anyone with that is flying: EM stocks are stalled: Junk is euphoric: Bonds


Australia “heading for small business disaster”

Simon Reynolds, founder of The Fortune Institute, claims Australia is “heading for a small business disaster” and has called for further assistance from the federal government: “We are heading for a small business disaster”… “The government has offered them temporary money, but that will run out fast. “In biblical terms, the government is handing out


Links 29 May 2020

Global Macro / Markets / Investing: Coronavirus pushes global credit rating downgrade threat to record high – Reuters Some 42% Of Jobs Lost In Pandemic Are Gone For Good – Forbes COVID-era junk bond deals begin to go sour in just 2 months – Reuters ‘The Top End of the Economy Will Be Fine …