Macro Afternoon

A mixed day here in Asia with most stock markets treading water as everyone awaits the outcome of the ongoing US/ China trade talks plus the possibility of another Trump shutdown later in the week.

The Shanghai Composite finally put in a scratch session after riding a big wave all week, closing just a few points lower to 2719. The Hong Kong Hang Seng Index closed 0.25% lower, but is still well above 28000 points with the uptrend well intact:

US and Eurostoxx futures are looking better with the S&P 500 looking to break out above the series of highs on the four hourly chart, making a run for 2800 points:

Japanese stock markets tread water as well, despite the lower Yen, with the Nikkei 225 closing flat at 21138 points. A weaker Yen is still pushing  the USDJPY pair higher but only just above the 111 handle as momentum wanes slightly. There is continued upside here to least at 112 or even 114:

The ASX200 was  the weakest in the region again, as the poor Telstra profit result and a flailing AMP share price sent the bourse down to close at 6059 points. The Australian dollar lifted slightly to be back above the 71 handle but did not make a new high so this still looks like short covering going on after finding a temporary bottom at the January lows:

The economic calendar has several major releases to keep an eye on tonight, namely German and EZ wide 4Q GDP prints, then US retail sales numbers for December.

Comments

    • I think he wants to say we’re buggered, but since you’re not allowed to outright say that, he’s gotta fog things up a little.

    • Head up Gavin … government money is debt to ourselves as a society.

      Now I understand during the neoliberal period banks were allowed largess due to the free market up lift memes, because government spending was said to crowd out private market magic makers and screwed with price discovery and Hayek said altruism had to die so that would not fudge the numbers e.g. its omnipotent in adjudicating T from F and many billionaires and squillionaires pay good money to tell you that ….

      • What a load of crap, government debt is debt to the bondholders, who are individuals. Society doesn’t own financial products.

      • If you have been paying attention all these years established currency issuers don’t even need to issue bonds, its a hang over from the gold standard, never the less these sovereigns are beholden to their political donors which IMO are the majority bond holders …. go figure … self interest or something…

      • Brett …

        Nothing new about it, say PK started long before neoliberalism became dominate, then Veblen before all that, and then some were want to bastardize Smith … oh wellie … and if you really want to get stuck into it … this is just the same game playing out since PIE, but for brevity, since the Sumerian nation imploded.

        Results of which were refugees moving into the territory of Israel and Palestine, which imo started as small village communes until a population boom ushered in the nation city states of that region. This is the stuff that Hudson bangs on about because it underpins the whole anglophone perspective echoing from antiquity. Yet I’m always want on this level to point out the classic case of the two great Jewish houses banging on about stuff in the Babylonian occupation and the results of that extenuated through our anglophone history.

        Then empire and the market became synonymous because, esoterica became how rights were established and the antiquarian preview of distribution.

        But thanks for the boy band youtube video after the low brow quip ….

    • Anand makes a lot of sense at 7m18s!

      “there is good populism and there is bad populism”.

      Precisely.

  1. TailorTrashMEMBER

    Channel 7 “news” tonight is offering the punters tips on how to get themselves into debt they can never afford ……

    one of the tips ….

    In 3 months before you apply ..” cut out Uber Eats “ ………whao !!….make that finely tuned pallete suffer ……the path to riches was not meant to be easy ……..

    ……….what a blow to pretensious Straya ….

      • One guy managed for over a year with just water and some vitamins and minerals. It is actually possible but you would need some blubber as a store of energy.

        One a more serious note. I have been trying to work out the lowest amount of money required to maintain body weight in a financial crisis. Woolies selling Rolled Oats for around $1.50/kg which should be enough calories for 2-3 days.

        And some trivia. 100+ years ago New York was surrounded by oysters which was key to high levels of immigration because you actually couldn’t starve… unless you were allergic.

      • now that you mention it it is a great source of soluble fibre which is proven to lower LDL “bad” cholesterol.

      • rice and oats are only that cheap due to supply and demand. if we find ourselves in a super mega recession and millions of punters find themselves on the proverbial breadline, wait and see what the price for a bag of oats or rice is then

      • The discussion got me to look into meal replacements. Aussielent, an Australian version of the Soylent meal replacement comes in at $321.50 for 4 boxes. Each box is meant to be a week’s worth of meals. At 28 meals a box that comes to $2.85 a meal. (They recommend a double dose at dinner.) That’s with a 5% discount for spending over $200 and the price includes shipping. Given I’m a terrible cook and dislike shopping this could be a goer. The other Australian brand I could find is Oz Soylent and it is $360.50, delivered, for four weeks worth.

        It obviously costs more than an oats and rice diet yet it’s far less than many other diets. It appears to be a lot healthier than the oats and rice variety. When looking around the webs some people have lived off similar concoctions for a year. A lot of those people aren’t exclusively on their choice of goop. They will still eat out with others and at family events. Some are 100% goop. There are a few before and after health results up as well.

        Has anyone tried this?

      • @footsore. I recall reading a science article discussing ideas as to how antioxidants and anticarcinogens which would normally be destroyed by the digestive process, still manage to enter the bloodstream. The theory is that fibre behaves like a sponge soaking in these chemicals, the fibre goes through undigested, coats the bowel lining and these chemicals enter the bloodstream.

        The point being don’t ever cut fibre from your diet. It is potentially a lot more important than just pooping easier.

    • one of the tips ….

      In 3 months before you apply ..” cut out Uber Eats “ ………whao !!….make that finely tuned pallete suffer ……the path to riches was not meant to be easy ……..

      Did the follow up with “and make sure the last one you buy is a doozy because you won’t be able to afford it again for the next twenty years” ?

      • If the reason you get declined for a loan is due to frequent ordering of Uber Eats. I think you have bigger financial problems personally.

    • Yeah but …. what happens when the boomer meme is a distortion of reality and just a nice scapegoat for squillionairs ….

      • I think it depends on your boomer gripe.

        A whole generation actually did benefit from a range of economic and social meaures. Even the many who didn’t get rich were still lifted by the rising tide. Now a good portion of those measures are under threat and this same generation sits idly by.

        Also indisputable is the environmental damage done on their watch and the almost nil mitigation. Science had a firm grasp of this stuff even then.

        So call it a meme but your probs guilty of the same degree of oversimplification.

    • Mining BoganMEMBER

      Betcha El Trumpo is making phone calls to Angela, giggling then hanging up when she asks who is it.

      Hey, why didn’t the turd spike or something? Isn’t that what it do?

    • Be a pity if some of these developers start getting fitted with concrete boots….. Especially Trigoscum, could throw him straight in the drink from his backyard.

      • As for the Elara guys… As long as Lake Burley Griffin has at least 2m of water in it… I’m all for it!

      • Mining BoganMEMBER

        Doesn’t need to be two metres, just dunk their heads in. They had to call off the swim bit of the triathlon last week because algae or something.

        The water is as dirty as the politicians.

      • Yep, Lake BG water quality is pretty awful… maybe there are already a few developers in there.

        Full of scum.

      • oh noes ivan bulum is a lovely guy
        https://www.abc.net.au/news/2018-02-28/cracked-empire-ivan-bulum-canberra-developer-elara/9425510

        Ivan Bulum in a royal commission feed.
        PHOTO: Ivan Bulum gave evidence at the Trade Union Royal Commission in 2015. (ABC News)
        On Wednesday, Mr Bulum directly controls 53 different companies, some with virtually identical names like 19/29 Pty Ltd and 19/29BT Pty Ltd.

        “Since the demise of B&T Constructions, a new corporate identity — The Bulum Group — has appeared to take the lead, ushering in a major redevelopment of Braddon’s Lonsdale Street.”

      • I was told (though by a real estate salesman) that the family behind those companies is currently developing the old Jaccaranda Bookshop site across the road from the Jamison Centre in Macquarie. As scummo says a fair go is for those who have a go.

      • “To make matters worse, administrators told prospective creditors that any money raised from B&T’s liquidation would likely go back to its director, Ivan Bulum, through an associated company that was owed a secured debt of $1.7 million. “

        LOL. What a joke our legal system is, that fraudsters like this can simply game it.

  2. I went to a builders and land agents event last night in Donnybrook in Melbourne. Well it’s not really in Melbourne, it’s in paddocks miles from nowhere. Along with the usual land estates with postage size land lots they were talking about medium and high density being built there. I didn’t believe. I had a look today and there it is in the “precinct structure plan”

    “Located adjacent to the existing Donnybrook Railway Station, LTC 5 provides a strategic opportunity for the redevelopment of a high density residential and mixed use centre to take advantage of the future upgrades to the station and services. A supermarket and specialty retail combined with mixed use development including commercial is envisaged for LTC 5.”

    This is mentioned for 4 seperate sites within that non suburb
    “Encourage high density residential/ office uses at upper storeys along main streets to provide vitality and diversity. Development of greater than four storeys is encouraged.”

    Vitality the new word for Vibrancy?

      • Nah they are just responsible for millions of deaths. But you just go to cook the recipe the right way this time. Why did the migrant caravan from Honduras go to USA instead of Venezuela considering that Venezuela is half the distance?

      • Is this romper room which things are similar and which are not …. is the U.S. experiencing decades of economic sanctions refusing the neoliberal paradigm.

  3. I mentioned in the weekend links that Melbourne is approaching is largest ever peak-to-trough fall according to Corelogic data.
    Tonydd provided the peak value as 157.21 (on 25/11/2017).
    According to here – https://www.corelogic.com.au/news/what-have-periods-decline-looked-over-recent-years-and-how-long-have-markets-taken-recover – a 9.4% fall was the largest, in 2008-09.
    The index needs to get to 142.43 to match to 9.4% fall. As of today it reads 142.59, so a fall of 0.16 points now required.
    To break the peak-to-trough record and get to a 9.5% decline requires an index read of 142.27, a fall of 0.32 points from the current reading.
    Based on recent one-day falls we could see the 9.4% mark matched tomorrow, but being conservative that mark is on track to be breached this coming Sunday or Monday.
    At current quarterly rate of decline the new 9.5% decline mark is set to be hit next Tuesday.

  4. My letter to my property managers..fyi each time they send me a rate increase they use the same tired old template. It starts with “it should come as no surprise blah blah blah, landlords expenses have gone up, blah blah blah”. Which annoys me. So I threw it back at them this year..in previous disputes the LL has said he’s happy to see us go. But I’m so over living in a dump now I actually will move. Ha.

    Dear Prestige Realty,
    It should come as no surprise that rents in Sydney are now on the decline, as a result we feel this latest increase is out of line with the wider market pricing, given current vacancy rates and weakening property prices and an economy with very low wage growth.

    As you may be aware, the property has not received any improvements since we started to rent the property in 2013. The yard requires extensive maintenance in summer which is very time consuming, along with no air con in 1 of the hottest summers on record and our friendly cockroach visitors who like to make themselves at home in our kitchen.

    If the priveledge for such living is another $20 P/week. Well colour me surprised.

    Generally speaking I always thought in exchange for not making such complaints the landlord would prefer to keep his tenants happy than risk a vacant home which will cost far more in the long term than a $1200 increase in annual rent.

    Thanks for your consideration, your long term tenants who pay rent on time.

    Gavin.

    • Good on you mate. Stick it too em! Don’t fark around tell em you want a reduction, and find some better places to show em where you will be going.

    • Well done. I’m going to do something similar when my lease expires.
      They can drop the price to what I think is reasonable or look for another tenant. Given that it was on the market for over three months before I moved in, and options abound, they may see some sense in meeting the market. If they don’t then I find something I like and they lose out.
      It’s a wonderful time to rent.

    • So contra to supply and demand rule of thumb sometimes price goes up to offset diminished returns or increasing overheads …. leaving some to scratch their heads over the inelasticity thingy …

      • He won’t spend $10 on the place Skip. If his costs went up its via taxes. Not my problem. He can try and make it my problem. Or I can make it his by moving out.

      • Hay Gav … just pointing out the problem with simple deductive reasoning based on some mind numbing so called rational expectations. Its very counter intuitive for some to understand that some would raise prices in a down wind with out understanding their balance sheet dynamics and knock on effects from other parties raising costs.

        That your land lord or others don’t do proper maintenance is a legal or regulatory issue acerbated by dominant ideological thinking about rights relationships e.g. see dominate economics i.e. the property owner [tm] has more rights than you do.

        For a good time consider scale wrt to this dilemma.

    • “Danny Shi from CBRE, the sales agents for the ‘Crownview’ site told the Mercury that there had been three offers on the site, but no deal had been done and contracts hadn’t been exchanged.

      He said they were in the negotiation stages with those parties, and were waiting on a response from them.“

      Money train from China all gone……