Dalian is firm today but going nowhere really:
AUD is rampaging towards 81 cents:
Which is capping Big Iron:
And Big Gas:
Big Gold is mixed:
Big Sleazy is at new lows:
Big Spruik is mixed:
The ASX is at the brink again of its descending triangle:
The rampaging AUD may push it off…
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…and I remeber reading the MB article “Short the Aussie Dollar Now” or words to that effect. Think that was a morning wake up article around Oct 2015. Was then at about .72 US. I enjoy MacroBusiness but that call was soooo wrong. The Kouk must be having a good old ROFLMAO at you guys..and dont buy Housing I wont go there. Apols for the trolling and I too would like this Game of Mates to rollover but MB but has got the last two years wrong big time.
Indeed they have. MB is ok at identifying themes, but not so much in identifying market inflection points. I still remember when the Chinese unleashed the stimulus ‘kraken’ at the beginning of 2016, MB said it would have minimal impact on commodities… a good opportunity to short.
No doubts they will be proven right again, but something about a broken clock springs to mind.
Yes, the AUD has gone against us for 18 months. And, the Chinese stimulus got bigger than expected. I also called the top early for Sydney housing in 2015.
Such is markets. Not much point picking a frozen point in time to assess performance. What you don’t mention is that if you’d followed the asset allocation over the same period – dollar-exposed industrials – you would now be laughing all the way to the bank: https://www.macrobusiness.com.au/2017/08/full-asx-laggard-revealed/.
There were plenty of other allocation successes too. Years of glowing iron ore shorts before we missed one in 2016. S&P500 long from 2013. The long bull market in Aussie bonds. Gold in 2016. Picking the Trump trade last and this year. I’ve been calling out the current Aussie dollar spike before it took off too, though it goes against where I think it will be next year.
BTW, themes is what we do. Turning points are to you!
Happy to take the hits but investment is about more gains than losses over the stretch not winning every time.
That don’t buy now dude needs to be jailed for the pain he has caused those who listened! Throw him in a cell with that Steve Keen c0k who also caused immense unnecessary pain to those who listened to his dribble!!
It’s great to see the dollar getting higher. It means cheaper holidays and stuff. Awesome.
This is a USD story, not an AUD one. AUD actually losing a bit of ground against CNH/CNY which to me is what matters.
Yup, but hey makes our #1 export cheaper for foreigners, what’s the issue?
of course it is but MBs prediction against the US was uber bearish..and wrong…not slightly wrong, but uber wrong. 48c US was the call. I appreciate H&Hs reply. But geez the Pascometer, the Kouk and other copped it along the way. I think there have been some major WEEOOO WEEOOO WEOOO Macrometer moments too and its that October 2015 short the aussie one that stands out to me..almost picked the bottom of the AUD. While H& H outlines some of MB s successful calls, the big calls – Aussie to flunk, and housing to tank have not occurred over years of calling them. Of course timing such events are nigh on possible, but there is a time limitation … seem to remember an article on here by a Hedge Fund Manager a little while ago, admired by the MB guys, cant remember his name (Scottish guy???) who said if your big macro calls are still wrong after 3 years, its time to give up on that call (or words to that effect).
That was Hugh Hendry
Oh I agree. FWIW I also agree with the MB call that housing is a bubble that will collapse, eventually. AUD may drop back to $0.50 too, that’s possible but really depends on the performance of the US which may prove to be similarly lacklustre. That’s the tough part about currencies, they move against each other, but the global economy tends to move in a correlated way so its tough to pick the out/under performers at any given moment.
Timing is everything when it comes to investment. Over years of trading I have learned to respect charts far more than fundamentals because even when I’ve had an economic thesis which proved correct, it hasn’t always saved me from being crushed by inexplicable and/or irrational weight of money from other sources if I was too early. Better to wait for all the ducks to line up.
Yep, got those wrong. To be fair, I had been calling Aussie short since 2011 so I didn’t pick the bottom, just missed the 2016 cyclical turn, being more focused on the long run.
You can’t stop making calls because markets go against you sometimes. That’s part of the game. You’ve simply got to make sure your allocations hedge different outcomes.
We haven’t been “uber-wrong” on the AUD. As said, the number one suggested allocation to come out of the forex view – dollar exposed industrials – has positively boomed as the broader ASX died. It had a built-in hedge because behind the thinking on forex was the assessment that Aussie domestic demand was going to be weaker than external:
https://www.macrobusiness.com.au/2017/08/full-asx-laggard-revealed/.
I still think the AUD has much further to fall in structural terms. As for timing, the US still looks bullish next year with forced spending out of the hurricanes, Fed pushed back for a bit and mortgage rates low, lower dollar now, tax reform (assuming GOP is not utterly broken) that repatriates lots of USD, oil eventually tightening a little.
China is set to slow steadily too. Steel mill reform is done and iron ore supply keeps rolling.
We constantly reassess things and right now with the AUD rebound running it is time to ask when will it run out? Domestic demand still doesn’t look well in Straya next year.
Podcast perhaps. Come to event. These issues were discussed extensively.
Think there needs to be another podcast discussing the issues at hand today and how things have changed etc