The market’s quaint faith in Scummo

It’s all on the broad shoulders of Scummo now. The AUD is holding 0.69 this morning, just, despite Australia’s world coming apart at the seams:

XJO is also holding up well on the ‘Scummo will save us’ bid as S&P futures get hammered:

Bonds are telling a very different tale:

Dalian is soft:

Big Iron too:

Big Gas is bashed on politics and oil:

Big Gold is mixed:

Big Banks are down ex-a bullet proof CBA:

Big Realty is mostly down as well but only off a big rebound:

Australia’s economy is a runaway globalisation train, utterly dependent upon good global growth, open Chinese markets and uninterrupted flows of friendly people.

But the high globalisation bridge ahead is collapsing even as we hurtle forwards. Why hasn’t XJO discounted this at all with valuations at forward earning of 16x?

Because Scummo will save us.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

Latest posts by Houses and Holes (see all)


  1. Hopefully the downturn is concentrated in Queensland.
    And since they are “aspirational”, jobs and growth, welfare hating types, no unemployment benefits will be provided, no stimulus will be provided, no infrastructure spending, no natural disaster relief, no taxpayer assistance to pay out entitlements to staff of miners.
    You voted this government for “aspiration” and the ability to start small businesses, good luck with that in an aggregate demand vacuum with no government assistance.

  2. Australia’s world coming apart at the seams
    “Will somebody please think of the children!!!” (in a hysteric voice)