We ran the latest live Q&A session last night. One highlight was our updated scenarios. With the trade wars in play, the election results, RBA comments and APRA’s latest, the relative weighting for the scenarios have changed. Cash rates have been reduced, and bank losses adjusted.
Of course we have yet to get soundings from our household surveys as to whether buying intentions are changing; that will take a few weeks. And more unnatural acts might shift the results too.
Too bearish. It’s Scenario 2 now.
More:
What they’re missing is that this is the thin end of the wedge. Both the RBA and APRA will keep cutting.
I don’t see any kind of boom. But prices will stabilise and grind higher until the next fiscal shock.
So yes, in the long term sense, it is dead cat bounce.
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 founding 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.
