Macro Afternoon

A red day here in Asia with all regional stock markets finishing down as risk traders weigh up what the hell is going on in Washington. With a new Secretary of State and possible new trade sanctions against Chyna, markets are getting a bit exhausted by the MAGA-in chief. US Treasuries held on to their gains while commodities were also steady as the trifecta of Chinese internal data came in better than expected.

That hasn’t helped Chinese stocks with the Shanghai Composite closing 0.5% to be below the key 3300 point level once more, brushing aside any confidence about a recovery.  The Hang Seng Index is off more than twice that, down 1.2% at 31201 points, still unable to make a dent into new highs as rolling ATR resistance above at the 32000 point level looms:

S&P futures are relatively steady after last night’s mild selloff, bouncing off possible support here at the 2770 point level:

Japanese stocks fell as Yen strengthened slightly due to the safe haven trade, with the Nikkei 225 closing 0.8% lower to 21777 points, putting aside any upside potential for a breakout. The USDJPY pair slapped down into the mdi 106’s on the Tillerson fallout, with the four hourly chart showing clear resistance at the 107 handle and support at the 106.30 level:

The ASX200 fell 0.6% or nearly 40 points lower to 5934, unable to gain any traction and not helped by the Aussie dollar. The Pacific Peso remained firm going into todays trifecta print and took back most of last night’s losses to be a at just below the 79 cent handle against USD:

The economic calendar has three major events to be aware of overnight. First, Super Mario is having a chat to the plutocrats in Frankfurt, then US advanced retail sales and finally the DOE oil inventory report.


      • The Traveling Wilbur

        The frequency with which you are posting the exact words I also want to respond with is increasing at an alarming rate.

        That the punctuation is now also subject to that coincidental conspiracy is deeply disturbing.

        One could even go so far as to say we have synchronised our periods.

      • Mining BoganMEMBER

        It happens. When Ermo showed up here I thought he was me.

        Then he got all wordy and philosophical and outed himself as just being another nerd.

      • The Traveling Wilbur


        I’ve given thought previously to suggesting forming a mutual support group on pretty much that basis alone.

        But then, more recently, stagmal will post something on the weekend and the world has colour again.

        And no one would​ be able to agree on the dispute resolution process criteria anyway.

    • DingwallMEMBER

      Their “Plan” is to let the tide take it to where it will………… as long as the tide keeps bringing in people and taking out dirt.

    • How is it mad, I mean in context how is it that you determine its not where you want it to be….

    • You don’t happen to know where I can score some acid to watch that with? It’s very hypnotizing.

      Edit: have to add, they could do a little better with the in and out spots. It’s got our hub of commerce right about where Tennant Creek is! The only good thing that comes out of that place is me after I fill up with fuel and give them the finger in the rear view mirror!

      • JR…

        Not all countries live in the same time and space continuum cookie cutter economics portends exists.

        BTW China is not a currency manipulator as such anymore.

      • I have to add JR that America as reserve has to run CAD deficits, has too, every time it goes into surplus the next recession is baked in…. just look at Clinton and Rubin. The whole balanced budget is a scam.

      • Timmeh…

        Do all countries move from the same point of origin, in parallel, if not, why would anyone want to use some rather over generalized economic rule to cover “everyone” – regardless….

        disheveled… I understand it saves on having to think and all…

  1. A hypothetical relating to the ALP imputations plan.

    Assume if you will that that a despotic PM and government decrees a company may never accumulate profits and must distribute them all every year (much like a trust unless they want harsh tax punishment).

    Company has one shareholder owning 100% of the shares and makes $100 profit in a year. The shareholder is a super fund in pension phase with a rate of tax 0%. Now at the time of distribution, logic would have it you don’t bother at all with taxing the company as it will go straight to the holder and tax them at their rate. So 0% of $100 is obviously nothing. It would be illogical to tax the corporate rate of 30% when it never really parks itself in the company. Even if you did you’d need some mechanism to see the ultimite recipient has a strong tax concession (exemption really).

    Well, the current company tax/imputations systems has to consider that it is parked in the company for some point in time so taxes 30% straight away. The Commenwealth gets the time value of this 30% of course and the circumstances of a refund only arise if the ultimite shareholder owner of the profit has a rate below the company tax rate. Unfortunately in Australia with the ridiculous rules on super especially in pension phase, there are a LOT of these. Yet the refund itself recognises there is still only one profit, made by the company, distributed to the shareholder.

    But the problem is the ALP is attacking a symptom (huge revenue loss in franking credit refunds) rather than a cause (excessive super tax concessions). Worse still they are selling a policy based on fairly complex tax code that requires a bit of knowledge of how super operates, the tax free threshold for individuals and the imputations system. I don’t buy the fact that other countries aren’t doing it as a basis of repeal. Do other countries have domestic tax havens like earnings of a super fund in pension phase that are the underlying cause? They had their 2nd PM at a row at 30 Newspolls and they’ve risked it big time.

    • The Traveling Wilbur

      How dare you bring logic and commonsense, let alone alternate soultions, into this?.

      Think of the children man.

    • It still gets at the problem in a round about way without taking on the super industry directly. Which would be tougher politically.

    • I follow your argument and my next question is why not go after the super concessions? Do too many people receive those? Does it threaten the Super industry? Is it harder to sell? Could it be seen as too much to soon? I’ve not the foggiest on this so any insight offered is very much appreciated.

      • Very hard to sell. “Messing with super” scares a lot more voters than”messing with dividend imputation”. Which is why the Libs are trying to portray it as an assault on everyone who owns shares.

    • Ronin8317MEMBER

      The actual issue is that everyone else receive a tax credit, while Peter Costello decided that retiree can get cash. Just imagine the revenue loss to a government if all tax credit has to be paid out in cash every year.

    • Big question no one wants to delve into is why people were force at onset into deferred spending in a casino and call it a retirement plan ….

      • One stone which killed a couple of birds for Keating and Kelty.
        1. held down the proles take home pay & wage demands
        2. Bought off the Unions
        3. Created a pile of dumb money for Keating’s Martin Place mates to pilfer.
        4. Created some well positioned post public life Directorship / advisory vacancies in the industry.

    • Labor want to introduce some less popular policy so that Trumball will get a positive 30th newspoll.
      Then Trumball won’t be tossed out and will be an easy-beat at the next election 😉

    • The Traveling Wilbur


      But, depressingly, it could be worse. In NZ, in the 90s, it would have been turned into an indoor-minigolf course *without a liquor licence* OR a desert restaurant​.

    • Meh. The Sydney “we are a global city” ponces have made their bed. Now they can lay in it. It will be such a vibrant city once the only thing to do is have canapes behind closed doors in Vaucluse. Even third worlders will wonder wtf they went there for.

      • Have a chat to them Timmeh, there’s already quite a few wondering if they made the right move, & their rellies are thinking of backing out from coming to start with. The theme’s been present for at least 2 years, but clearly not enough backwash to be noticed – yet.


    … YES … effectively politically banning affordable new housing supply is completely idiotic ! …

    Hobart’s housing crisis: Australian and international ‘fixes’ up for discussion – ABC News (Australian Broadcasting Corporation)

    Ahead of an urgent summit in Hobart, stakeholders are looking to overseas solutions and interstate taxes and regulation, saying everything should be on the table when it comes to fixing the city’s housing crisis.

    The State Government called the housing summit after it was revealed families were living in tents at the Hobart showgrounds.

    Hobart’s rental vacancy rate is at just 0.3 per cent, the lowest in the country.

    As the tourism industry flourishes, landlords and investors are taking advantage of Airbnb and other short-term rental opportunities.

    While there is wide consensus that is part of the problem, the full impact of Airbnb on the long-term rental supply is not fully understood.

    Another problem is that the supply of new homes is failing to keep up with a Hobart population that has grown by 4,000 in 18 months.

    There is not enough public housing and social housing, and that is adding to pressure on the private rental market. … read more via hyperlink above …


      Kiwibuild likely to add only 9,000 homes over four years | Kiwiblog
      Stuff reports:

      The Government’s KiwiBuild programme could add as few as 9200 extra properties to New Zealand’s housing stock over the next four years, an economist says…. read more via hyperlink above …
      Rodney Dickens says section prices are the key to solving the housing affordability problem, not higher density around transport hubs. He warns against force-feeding in areas that won’t deliver the intended outcome … Interest Co NZ

      By Rodney Dickens*

      Maybe reflecting vested interests and complacency, National’s housing policies did nothing to solve the affordability problem.

      In the case of Auckland this is evidenced by section prices having increased 72% since the first tranche of Special Housing Areas was approved in 2013.

      Labour is adopting a broader and more hands-on approach to addressing the housing affordability problem including proposing some policies that have the potential to address the most pressing problem: excessive section prices. … read more via hyperlink above …
      Demographia International Housing Affordability Survey … Media Release | Scoop News

      … concluding …

      … New Zealand global leader restoring housing affordability …

      The co-authors of this Survey, Wendell Cox and Hugh Pavletich, have short commentaries within the Introduction section.

      Within his commentary, Wendell Cox outlines that the principal reason for concern about housing affordability, is its impact on the cost of living and therefore the standard of living.

      New Zealander Hugh Pavletich briefly outlines the massive evolutionary political progress underway in his country, since the time of the release of the 2005 1st Annual Demographia International Housing Affordability Survey ( full schedule accessible via ).

      Housing has been a major issue these past 4 elections.

      A Labour-led government won the recent late 2017 election, with a comprehensive housing policy … that includes …

      ‘Remove barriers that are stopping Auckland growing up and out

      Labour will remove the Auckland urban growth boundary and free up density controls. This will give Auckland more options to grow, as well as stopping landbankers profiteering and holding up development. New developments, both in Auckland and the rest of New Zealand, will be funded through innovative infrastructure bonds.’

      Labour has a proud tradition as the ‘Party of Reform’ in New Zealand.

      • Hay Sweeper how gloriously absurd is it that Hugh has seamlessly gone from major Key leg humper to Labour….

      • Skippy … I humbly apologize for supporting former New Zealand Tory PM John Key back pre the 2008 election in 2007 … when he had this to say …

        PM John Key on Housing Reform 2007 – YouTube

        … but … as a Tory myself … I turned on Key and our Tory mates well over two years ago now … refer GONE GONE GOING section Performance Urban Planning .

        Historically … Labour has been the ‘Party Of Reform’ in New Zealand. New Zealand Labours great ‘hurdle’ are the bureaucrats at central and local level … sadly … much like their British counterparts …

        Public sector inertia at a council office where employees take six-month sickies | Daily Mail Online

        … who make great (?) building developers too of course ! …

        Inquiry. The Great British Housing Disaster (Adam Curtis, 1984) – YouTube

        Are the Aussie bureaucrats as bad as their Kiwi and British counterparts ?

      • Unfortunately (for Hugh) Skippy I don’t think the relationship will be a happy one.
        The electorate (much less the avg. Labour voters) appetite for further “reform”, “innovative bonds”, PPP’s, arbitrary fiscal targets, is almost non-existent and shrinking every day.

      • Sweeper … You need to check out reputable polling in Australia, NZ and the UK … just for starters.

        New Zealand’s last Tory Govt got thrown out last Sept / Oct … mainly because of its poor performance over housing issues. It is well understood in NZ that Labour will be punished if it fails implementing well understood housing solutions.

        Note what I had to say within a short message within the Introduction section of this years Demographia Housing Survey … accessible via .

      • “It is well understood in NZ that Labour will be punished if it fails implementing well understood housing solutions”

        Which is exactly why poorly understood special interest giveaways which do nothing to address housing affordability would not be received well by the electorate.

        “Partnering with the private sector” is a good way to lose the next election.

      • “…The electorate (much less the avg. Labour voters) appetite for further “reform”, “innovative bonds”, PPP’s, arbitrary fiscal targets, is almost non-existent and shrinking every day….”

        If only Sweeper.

        Unfortunately most of the electorate remains convinced that

        fiscal policy is just stealing tax payer money
        Private bank credit is none of the government’s concern
        Monetary policy is the only legitimate tool
        Housing price rises are a rightful reward for the frugal

        But as an apologist for the role of private banks you are all cool with that so why the confected outrage?

      • The other day you were telling Hugh to keep up the good work. Now you are saying you are opposed to “reform”, innovative bonds”, PPP’s etc.
        All over the shop.
        And then again you roll out the private bank apologist allegation despite not a shred of evidence.

      • Sweeper,

        I did not comment on bonds etc. I merely pointed out that your confidence that the voter cared about that stuff was likely to be misplaced.

        Old school lefties like you dont really understand that the world has moved on which is why you like conspiracy theories about how everyone has been brainwashed..

        As for evidence that you apologise for the role of private banks in the monetary system what evidence is required ?

        You whinge and complain whenever i suggest that role be abolished.

        Or do you just say that stuff to impress the furry pouch.

      • Posted at …

        Ask your dense urban planner …

        How many Hobartians could live in a Hong Kong water pipe ? …

        My night in a tube home, low-cost housing concept for Hong Kong – cosy, but noisy and, in midwinter, chilly

        When I told friends I was planning to spend a night in a renovated water pipe, some were understandably concerned. They needn’t have worried; their image of me sleeping rough in a rusty, old sewer pipe had no bearing on reality. I was booked into an OPod.

        A 100 square foot (9.3 square metre) experimental, low-cost home made from two repurposed concrete water pipes, the OPod is the brainchild of Hong Kong architect James Law. Equipped with a small bathroom, tiny kitchen, shelving and a couch that converts into a bed, the micro flat is an example of how the city could tackle its lack of sufficient affordable housing.

        Still at the prototype stage, the OPod had never accommodated anyone overnight, I was told, so I nominated myself to be its first guinea pig. … read more via hyperlink above …