Macro Afternoon

Another mixed day across Asia with only Chinese stocks rallying as the more correlated risk markets prepare for some serious economic releases. Yen hit another new high against USD while sovereign bond yields continued to fall following the US Treasury lead.

In mainland China the Shanghai Composite continues to build on its positive start to the week, currently up 0.5% to finally get back above 3200 points. The Hang Seng Index is doing even better, up 1.6% to 30323 points. The daily chart is looking a bit more promising with the next level of resistance to beat the daily lows at 30700:

S&P futures are up slightly in anticipation of tonights CPI print.  I’m still looking for a return above 2680 or so before getting fully bullish:

Japanese stocks are still selling off in the wake of the very strong Yen. The Nikkei 225 closed 0.4% lower to 21154 points as momentum remains seriously negative. The USDJPY pair continues its slump below key weekly support at the 108.50 level, heading for the 107 handle in what could be a much wider breakdown:

The ASX200 pushed back after its positive session yesterday, closing 15 points or 0.3% lower to 5841. The Aussie dollar continues to push higher towards the 79 handle as it meets its key resistance at the 78.80 level:

The economic calendar ramps up significantly with two sets of major releases tonight. First its German/Italian and EZ wide GDP and then in the US its the January retail sales and CPI prints.

Comments

  1. Today’s quote of the day from Wordsmith:
    Patriotism is often an arbitrary veneration of real estate above principles. -George Jean Nathan, author and editor (14 Feb 1882-1958)

      • “Even supposedly “educated” people are susceptible. Indeed, educated people may be more susceptible because of their desire not to offend those whose good opinion they crave. The Bernie Madoff fraud was allowed to persist long after it should have been stopped because the financial community held to the belief: “Bernie is one of us. He can’t be a fraudster.”

        More likely they thought, “Bernie is like us.. a fraudster. But just like we do, he will only defraud the little people at the base of the pyramid. We will be paid back with interest in 6 years.. And will avoid restitution back to the scheme by hiding our money offshore”.

        from memory, this is not far off what happened. The people close to Madoff and big sophisticated investors did well out of the scheme and were in the best position to know it was fraudulent.
        The people who probably lost everything were the late coming outer circle social climbers maybe deluded enough to think ethics slope upwards with wealth.

      • Sweeper…

        I recently read someone opining that contra to rational agent models that someone getting done by a conman, rather than dealing with it, would find them out and give them more moeny….. that way they could say they were not Stoopid….

      • I would believe that.
        eg. the cult.. happy to buy into a pump and dump scheme because they think they are smart enough to know when to get out before the dump. Confidence in their intelligence being based on their understanding / fixation on tech.

  2. CB’s ” I’m still looking for a return above 2680 or so before getting fully bullish ” refers, as did his similar comment yesterday; refer – https://www.macrobusiness.com.au/2018/02/macro-afternoon-361/.

    Similarly, my yesterday’s comment is repeated here:
    ** CB’s ” I’m still looking for a return above 2680 or so ” refers. I’m looking for a prior [ 40% / 50% , or so ] decline before it returns to ** above 2680 or so. I am going to be correct. https://seekingalpha.com/article/4140760-perfect-indicator-just-flashed-sell-signal … dated – 28th January 2018, just before the 10% weekly decline. Anybody know any person here on MB whose comment(s) [was/is/(are)] so prescient ? **

    PS: To answer my own question, was it not the Wally/Funky bloke ?

    • Also remember you said at the end of November re. bitcoin:

      “Yes … it does , and has !! You missing something profound here, mate. Compounding return example takes the form of capital return, or reward for putting the asset to “work”, that then yields a return/interest-like/dividend = you getting a return ( = it served a useful purpose, therefore, somehow, hence the price rise ) , in the form of capital appreciation, compound that capital return, mate !!!”

      Suppose I’d bought this and bought the non-asset just before Christmas.. when can I expect my “compounding capital return”?

  3. Paul-Henri Spaak

    I can not believe that the global economy is still ticking along without major correction. I am starting to think in previous era’s we were a sensitive, conservative, gun shy world economy where if something went wrong we all got spooked and moved in packs.

    Now it seems since 2001 we are so used to the constant shocks and traumas, we have become battle hardened and what once would have caused global pandemonium is now seen as nothing too much to worry about, its not global warming and the world wont end – carry on.

    Maybe the end of shocks really is upon us, and there will be no major collapse…..

    There have literally been so many things which would have sparked an collapse, from Brexit, Greece, Syria, Iraq, Iran – just endless streams of panic inducing shocks- but nothing, barely a reaction from the shell shocked world markets, which just numbly continue pushing through the shells raining down on them.

    If the collapse of the Iron Curtain signaled the end of history, perhaps this is the end of the economy.

    • Mining BoganMEMBER

      It’s a nimble world. Every problem is solved by a man…hey, is that ad sexist? Meh…a man in a rabbit suit giving out more debt.

      Debt is the new benevolent Allah.

    • we live in a post-fact world now. Good news is good news, bad news is good news. Feelings are the new facts… I don’t feel like what you (insert world renowned expert) are telling me is actually correct, I choose to believe in X. We – as western / northern / developed world / take your pick are so soft and so used to being told that we can all have our cake and eat it too that the economy, aided by MSM and both sides of government everywhere, MUST deliver good news, all of the time, for everyone, always.

      However,

      Growth is finite. Resources are finite. This current system is finite. We are in for the reckoning of all reckonings. The 20th century and the value it placed on labour over capital and enterprise was aberration. Welcome to the new, neofeudal system.

      • ““Growth is finite.” literally a contradiction in terms.”

        (Economic) Growth, given a limited amount of everything that “economic growth” depends on, is finite.

      • Numbers are not a true representation of reality, observer problem.

        Sorta like Einstein dying whilst attempting to proof a grand theory, drama was he thought dawg was elegant.

      • Um no… numbers are a representation of what the user conceptualizes. In some fields of inquire its pretty straightforward, some not so much, one has to distinguish such contrivances. Its poor form to over generalize as maths cannot depict all things, see Einstein.

      • Name *cough* one *cough* thing maths can’t depict? What’s Einstein got to do with anything? Wanna try and “unpack” that nothing statement

      • Um like you endlessly pontificating…

        You might ask yourself why everyone is turning on you.. or not…

      • Nah bro still coder

        “You might ask yourself why everyone is turning on you.. or not”

        I ask myself why they turn on you…

      • Incorrect, I get paid to design and implement what gets done – no one tells me what to do, they ask me what’s possible…

      • Sophist… they cut the check…

        You know what they want and attempt to deliver it or your ass would be on the curb….

      • As opposed to? I hate to break it to you but that’s what managing clients is all about – if I wanted to fart around I’d live off my crypto

      • I have friends that dwarf your poroclaimed coding ability, scored hundreds of millions, your a wage slave day trader with ideological glitches…

        Disheveled… your word on it has no gravitas…

      • “if I wanted to fart around I’d live off my crypto”

        Which might last long enough to pay your CGT bill.

      • “Disheveled… your word on it has no gravitas…”

        And yours does? I’m confident your “friends” would be much happier in my intellectual company

      • I paid $60k in tax last year on income of $160k – I’m worth $6M currently on my crypto holdings. I DIDN’T USE ONE SINGLE AUD TO PURCHASE!

        Try again

    • Switzerland is shortly issuing zero coupon bonds due in 2029 and 0.5% bonds due in 2055. Unless you are already pension age you could easily live to see Goldman Sachs asked to set up a Retenbank to keep the empire in being.

      Just because it is going in the opposite direction doesn’t mean it won’t end up in the same place

    • It’s the interest rates they’ve barely risen worldwide. If they stayed this low indefinitely this sh!t show could probably go on for another 5 years at least, everything is priced reasonably at these rates. Nevertheless I’m pretty sure the 1% are also starting to look forward to a crash so they can buy up everyone’s losses with their exuberant gains.

  4. What will the latest incarnation of our notorious and frequently deleted contributor be? Just wonderin’.

  5. Questions to ask your friendly bitcoin exchange manager:
    If I were to buy some bit”coin” stock:
    – what would be my exposure to the yield curve?
    – Can I buy a bitcoin hedge through you even though you are not selling financial products?
    – when can I expect my quarterly bitcoin cash flow report?
    – Will my bitcoin earnings grow broadly in line with nominal GDP?
    – Is there a reinvestment plan so I can reinvest my bitcoin earnings?
    – how will I retire in 2 years if there are no earnings?

      • More questions:
        – who are the Directors? auditors? Is a register kept with ASIC?
        – Am I protected if your exchange is “hacked” (assets embezzled)
        – If I borrow to buy my bitcoin can I claim interest on revenue account?
        – If I buy a house with my bitcoin will it trigger a CGT event?

        trust you did your due diligence Mig.

      • I) I hope not, those useless criminals have given us a Royal Commission but zero recourse
        II) don’t keep anything on any exchange, why would you? They’re supposed to be for trading not banking you know
        III) whom are you borrowing from and what is the contract??
        III) if you buy a house with credit does it get taxed as income? That’s what I thought

      • ZIRP is quasi monetarist e.g. EMH w/ bolt ons….

        Now if specufuculeators use that to invest in socially unproductive ways… whom is the agency ascribed too…

      • Are you running an exchange now as well? Top of the pyramid stuff!
        iv) but the tax office doesn’t view bitcoin as a currency. It’s a CGT asset I believe just like a collectable. So using your bit”coin” to buy a house would trigger a cap gain which you would have to pay tax on provided you buy the house before the Ponzi collapses.

      • “banker apologists”
        you and 007 like to say that. But you’re both happy to buy into a centralised scheme/scam based on fractional reserves.. where the only difference is you don’t know what the fraction is (if any) held in reserve.

      • BTW bro I’m working on a ATO contract, they use Watson… Im going to try and mine bitcoin with it 😂

      • So what is so significant about Watson, that a private concern is administrating government policy, and sticking it with the bill.

      • The best bit is you emulate your betters…. Kudos…

        So much for that house with a library thingy…. chortle….

      • That both of you are too incompetent to the task, unlike myself…

        Banker apologists loose the right to say crypto

      • ATO is now IBM…. chortle….

        disheveled…ttw migi did such a bang up job in London he had to come to Oz to get a job in a PPP between IBM and ATO…. absurdity abounds….

    • They had that thing listed at about $3 million 10 years ago and now $900k. Daaaamn that’s a 70% reduction. Could that possibly happen here? No. Why? Because 3 bedroom houses in Castle Hill are better than that 🙂

      • There’s cheap land in Bakersfield. See across the street a similarly sized block (about 2760 sq m) that is not built on is priced at US$149k. In most cities in Australia a big chunk of the money you’re paying when you buy a house is for the land, over there it looks like most of the money is going towards the structure and fittings.

  6. “BIS Chief Sees ‘Strong Case’ for Cryptocurrency Intervention”

    Don’t mention the Nazi gold 🤣🤣🤣

    • Every Man,

      I have tied a message to a pigeon’s leg containing links to the MB crypto debunkers greatest hits.

      Mr Feathers is winging his way to BIS headquarters right now to let them know they can relax.

      Mr Feathers will let them know crypto is just a bunch of foolish kids into modernist architecture who dont understand that private money only works if you get the state ‘muscle’ to guarantee it.

      Surely the BIS know that the private bank apologist crowd have everything completely under control including the stain resistant brown pants.

      But they do sound a bit hysterical…..

      • Mr Burns,

        Of course most will go to zero. It is just private money. Private Bank money used to do that all the time before they got the state to back it and make it effectively the same as state money.

        That ripple CEO is just stating the bleeding obvious.

        What is not so obvious is why you seem to think that private bank money should be immune from going to zero.

        For Sweeper the answer is obvious…. he is a private banking industry shill… Just as 3d1k was for mining.

      • oo7…

        That free banking period during the 1800s is why some advanced the concept of central banks, its was devastating to both society and broader economic conditions – pure boom and bust w/ the mopes as fodder. I think you should read a bit of history to flesh that reality out a bit more, relying on reality plucked from a vacuum is not a good substitute.

        disheveled… seems a bit strange to advance the ideology based views that enabled the whole thing from the beginning, along with all the anti social and attendant capital destruction. I mean the data on Laissez-faire is pretty conclusive.

      • Only a private bank apologist thinks that the solution to private money fraud – i.e. Private bankers- is to give them state protection.

        And then deny they have it.

        While insisting it is essential.

        3d1k was always impressed by the spruik powers of the private bank industry.

      • oo7…

        Hard to respond to a collection of emotive syntax.

        Firstly the belief you have on public private moeny is your camps alone. Next is 3d is not part of this conversation so its not applicable to anything save some loose affiliation your trying to create.

        disheveled…. look I’m not the austrian here and loaded down with all its attendant baggage.

  7. You really gotta hand it to Vikki Campion. She owns that incandescent buffoon. In fact, she ‘owns’ Trumble and the whole FN country for that mater. Trumble cant touch Joyce or its bye byes for his govt, so now we’re stuck in this debauched twilight zone.

    • Mining BoganMEMBER

      I liked the bit where she went on ‘stress’ leave just before the election and just as she was showing signs of being a little bit preggers. They tried to hide her from New England and now she’s in a free bolthole, destroying the Coalition. Great work if you can get it.

  8. A person walks up to you tomorrow and offers you a choice of:
    – a 1kg gold bullion
    OR
    – x5 bitcoins
    He says the offer comes with one stipulation, you have to hold onto it for a full year. Which would you take?

    • Trick question, no girl is getting wet over Bitcoin. But you hold a kilo of earth’s finest in your hand and it’s suddenly red panty night, every night of the week.

      • I dunno, I really like those heavy-looking shiny golden bitcoin coins with a crossed “B” the media uses to illustrate their BTC stories. I wanna have five of those in my hand! Would feel nice I reckon.

        Wait, what do you mean? It what?

        Oh, I see.

        That’s the whole point, you say?

        Oh.

      • I agree. There’s something special about holding a solid log of gold. It always feels heavier than you expect. And the general feel of it, it’s like it radiates it’s own warmth…I can see why they built temples out of the shiz, there’s something holy about it. No wonder people scoff at soulless crypto supplanting gold as the safe haven. Wars have been fought over gold, what wars have been fought over that digital hocus?

        Too far? Naaaah.

      • Yes gold is beautiful but be careful as the private bank apologists see that stuff as competition as well.

        They are perfectly happy with their homemade accounting entries / paper IOUs backed the state.

        They want to rent out their vaults for rent not fill them with metal.

      • For me, Brenton’s original question is fully answered by the fact that, when someone dreamed up the idea of drawing a “picture” of a bitcoin that conveyed wealth and credibility, they tried to make it look like.. . umm… gold.

  9. TailorTrashMEMBER

    Why are we prosecuting this mother and daughter accused of renting out their state housing provided home in the Sirius building for $140,000 profit ………
    ……after all weren’t they just doing the great strayian thing of getting ahead via real estate ………at the taxpayers expense …….Scomo’s battlers to be sure !

    • No slice for the private bankers was what they got wrong.

      Making profits for private banks means you get to access their PR departments and amateur shill network.

      • Banks are refection of law informed by some ideology…

        disheveled… totally useless focusing on the former….

      • One doesn’t need to be a lawyer to know that bank apologists prefer myth to the legal reality of what makes a bank a bank.

      • Lawyer… eh… what does that have to do with anything else – ????

        Disheveled… especially since that should make the contract issue apparent.

      • Pretty sure there is no legal basis for the assertion that private bank non-cash payment facilities / promises to pay real money have equal status with real money / legal tender exclusively provided by the state.
        Actually I am confident that the opposite is the case.

      • @Sweeper. What is the opposite?
        You are pretty sure there is a legal basis for the assertion that private bank non-cash payment facilities / promises to pay real money have equal status with real money / legal tender exclusively provided by the state.?

        That does not sound very exclusive now does it?

      • I’m confident there is legal basis to the assertion that private bank non-cash payment facilities / financial products / promises to pay real money *do not* have equal status and are completely derivative of real money / legal tender exclusively provided by the state. Legal tender being the only accepted cash means of payment excluding foreign currency.

      • One doesn’t need to be a lawyer to know that bank apologists prefer myth to the legal reality of what makes a bank a bank.

        One does not need training in rhetoric to spot a certified private bank apologist refusing to address the issue of what makes a bank a bank.

        Its all about the deposits.

        That is why they are called ADIs.

      • Nothing reality based about your opinions oo7…. legal or otherwise.

        Still curious how someone with your self awarded gravitas confuses making banks a utility can be confused with being a bankster apologist. Especially being pro rentier – ticket clipping in other sectors.

      • One of the classic signs of the private bank apologist is that they never tire of dodging the issue.

        What makes a private bank a bank.

      • oo7…

        No one is dodging but you, banks operate like and Corp, under government charter and if you have a problem with that you have to expand it to every Corp.

        disheveled… I think the about of corruption out there is apparent, picking only one sector to focus on is why people like you get labeled moeny cranks….

    • No reason to if they reported the income to Centrelink and/or the ATO. And hadn’t signed an agreement preventing them sub-letting the state government housing provided to them.

    • That was a hoot.

      A long time since i have seen mocking of Central Banks in Aust prime tv sketch comedy but it would have been better to actually call it the RBA.

      • Central banks are staffed with people, people that hold a certain view about things, mostly due to their education, currently that would be quasi monetarist. Seems many institutions have the same problem, something about neoliberalism becoming dominate since the 70s.

        So if one has dramas with central banks, due to the views of those that staff it, it would seem to suggest they have issues with neoliberalism first and foremost. As such they would have to have issues with every other institution or business that operates under that perspective. Seems illogical to focus on only one entity out of a whole, especially when government and most of the judiciary is beholden, after decades of ratchet effect and revolving door – thirdway/washington consensus.

        disheveled… in light of your camps opines during the period in question I find the attitude and perspective more than a bit unrealistic.

      • Only a private bank apologist would argue that banks desperately require reform but that we should start elsewhere.

      • oo7…

        Laws establish the market, as such, its the system that administrates laws that needs to be reformed first. This is why I refer to Born and how the whole derivative thingy got so out of hand, banks had nothing to do with that event. Lest we forget banks were only one part of the whole sausage enterprise that blew up in the GFC, which IMO would have been a S&L level event save the arsonists and political hay making.

        Same as Plaza, banks traditional market share [local risk management] was opened up to international capital due to ideological beliefs about EMH et al. Banks adapted. Now people focus on the results of the primary agency and not the agency itself.

        disheveled… must be a comforting simplistic little world you live in oo7….