Macro Afternoon

Asian share markets have finished the week on a mixed note with Chinese bourses falling in the wake of weaker industrial production growth numbers while gold has spiked to a new monthly high despite a much stronger USD.

Chinese share markets were the main casualties again today with the Shanghai Composite falling nearly 1% to get back below the 2900 point barrier, while the Hang Seng Index continues its retreat, falling another 0.8% to 27078 points. The daily chart is showing price wanting to retest the former lows but there is a small amount of internal buying support holding on:

Japanese share markets were the odd ones out, with the Nikkei 225 lifting just over 0.4% to close at 21116 points, staving off a new weekly low. This is despite a much stronger Yen with the USJDPY pair heading towards the 108 handle as the risk-off mood widens:

The ASX200 also finished with a positive result, but only just – up 0.18% to 6554 points, capping off a relatively strong week. The Australian dollar however has finally tasted the 68 handle, briefly getting below on the Chinese industrial print, making another monthly low:

S&P and Eurostoxx futures are flat going into the European open with the four hourly chart of the S&P500 chart still rejecting strong resistance at the psychologically important 2900 point level:

The economic calendar ends the week with US advanced retail sales and consumer sentiment plus the latest industrial production print.

Comments

  1. The Traveling Wilbur

    Why is it difficult to get in with Scrums of SQL developers?

    They’re a SELECT group.

  2. The Traveling Wilbur

    Agile is a good way of:
    A) Delivering as little as possible as transparently as possible.
    B) Not having to show up for work before 0900.
    C) Never having to work with people who ask difficult questions again.
    D) Ensuring no one knew what should have been delivered.

  3. The Traveling Wilbur

    Is there any point in making everybody have stand-up meetings if they all already asked for and got a standup desk?

      • The Traveling Wilbur

        Oh. God. So that’s happening everywhere? The law of unintended consequences strikes again.

      • The Traveling Wilbur

        Have you seen what happens when a team realises there are fewer cards/post-its in their backlog than they think there should be?

        When you do, please let me know.

        PS Quite apropos of nothing… Nature abhors an empty In Progress column.

      • The Traveling Wilbur

        How to confuse a scrum: the night before, add a card to the backlog – in someone else’s handwriting.

  4. The Traveling Wilbur

    Is it ok if the daily standup meeting is scheduled for two days a week?

    PS Not JK.

      • haroldusMEMBER

        Oooooh that’s going on your annual review. I’m not sure you are really a team player.

        (
        My goal in all meetings is to not say a word, including no greetings or farewells. I think this is one of the greatest benefits of smart devices.

        If I am forced to say any word, especially to BA/PM, then I think that meeting has been a failure.

        If I am given a task from said BA/PM, I consider seppuku.

        No eye contact with PMs!

        )

  5. The Traveling Wilbur

    Other than entertainment value, is there any point in paying attention to peers trying to explain lack of progress during a stand-up?

  6. Phillip McCracken

    There are approximately 80,000 people in Victoria earning a salary capable of purchasing a house in Melbourne.

    With 1.8 Million households that means just 4% of all homes are capable of even being bought. Granted there are a good deal of households with dual incomes which would double this number or even more – but still.

    Wealth and income inequality is the most extreme it has ever been – so these numbers are thereabouts.

    Over last ten years the frenzy has seen house prices double – then the same added again. The takeaway from the Royal Commission was that banks were acting fraudulently and thoroughly unscrupulously in order to for the housing market to bubble as it did.

    The upshot has been that in an economy where people were already struggling for the basics, they have had their rent and mortgages pushed to far beyond peoples capacity to live normally, or even repay.

    From here costs are only going to rise and rise as the dollar falls, global droughts and shortages impact, and oil wars rage. Interest rates were already at or below zero in much of the world including Australia – so there is already no where to for any realistic relief which will offset the incoming tidal wave of rising living expenses.

    But what Australia has not seen – in decades now – is real unemployment. And that is the surest bet you can place on anything in the world today. Its beyond all question that we are headed into an maelstrom of unemployment.

    As a society we already have vast swathes of underemployment, masked and layered with obfuscation via surreptitious accounting methodology. Pouring migrants onto that is a aviation gas on the fire. Retail is already in severe recession, the rural sector is on its knees, what remains of manual labor and even menial office tasks and banking, telecoms, finance, media, law, insurance is quickly being replaced by fintech and AI at an alarming rate with transport the next on the automated chopping block.

    But above all this looms the fallout from a collapsing building industry. Sure 10% of Australians are employed in housing and apartment construction – we can see the cranes and high vis vests. But what we don’t see are the council workers who approve the applications, the town planners, the conveyance lawyers, the mortgage brokers, the real estate agents, the interior designers, the architects, the concrete drivers, the brick makers, the shops selling the tradies their lunch, the mechanics, the marketing agencies, the fittings shops, the lighting shops, the rugs, the dogs, the vets.

    A spike in unemployment in an economy rammed to the eye balls with migrants, with zero wage growth, groaning with underemployment with everyone crammed into a tiny corner totally reliant on a single beam of light – housing and apartment construction – will tear through the real estate bubble like a hot northerly February bush fire through the Otways.

    Imagine %8 unemployment in this country. Its not just a possibility but a very serious reality.

    There has been much discussion on the impact of stamp duty gutting the coffers of the states. Now consider the consequences of a collapse in consumer spending on GST ? Now consider the consequences of a collapse in revenue from income tax – a doubling then tripling of welfare as the hordes of migrants start clamoring for their promised booty.

    Then consider China slowing……

    The idea that a home owners grant, or a half a percent interest rate cut will reinvigorate the Australian housing market is clutching at straws, a final gasp of optimizing, sneaking one final breath before slipping silently into the Abyss.

    Its over. Its been over for 18 months. The ship has not sailed – it sunk – it split in half and sunk.

      • Phillip McCracken

        Like the locust plague in Spain, Ireland, France, Britain, Italy, Greece, Portugal, United States, Germany, China, Japan – wait – pretty much every where in the western world during and in some cases after the GFC.

        Australia literally lucked its way through – but to suggest what befell every single other western nation on earth could also happen to us is somehow a doomsday prophecy of pestilence and plague is worse than head in the sand stuff John – its pure rot.

  7. The Traveling Wilbur

    I asked an SQL developer once if the results of this iteration weren’t just the same as the last?

    “Distinctly different.” she replied. Smugly.

  8. Hugh PavletichMEMBER

    … NEW ZEALAND HOUSING … Getting focused on real solutions that work …

    From Kiwibuild to Kiwis Building … Dr Eric Crampton … The New Zealand Initiative

    https://nzinitiative.outreach.co.nz/?Ns=&Na=view-msg-public&SMESG-oid=22150&Scontact=2149250d

    At its heart, Kiwibuild was a promise to end the housing crisis. The set of reforms Minister Twyford is overseeing can fulfil that promise, if he has the chance to see them through.

    The housing crisis has nothing to do with government failing to build enough homes. It stems instead from a nasty mess of perverse incentives facing growing councils, debt limits, infrastructure financing problems, and difficulty in revising district plans under RMA processes – as a starting point.

    If the prior National government understood any of it, there was scant evidence of that understanding in policy. While Kiwibuild also missed the point, the policy is only a minor part of the government’s housing supply agenda – despite the disproportionate attention it draws. Focusing on the notable failure of one part of the package makes for great political sport but does nothing to advance housing reform more generally.

    Last February, I warned in this newsletter that Kiwibuild could never solve the housing crisis. The targets set were utterly unrealistic and the fundamental blockages lay elsewhere. In response, the Initiative produced a report sharply critical of the programme.

    But my Insights column also said that the government should be given a pass on its likely-to-be inevitable failure to hit its building targets, but only if it made sufficient progress on the rest of the supply agenda.

    That more fundamental reform is coming. It has been slower coming than we would like, in part because Kiwibuild has proved to be a distracting millstone. But, done properly, the coming changes to infrastructure finance will be transformational.

    Infrastructure supporting new development will be financed by bonds backed by levies on the properties benefitting from the infrastructure rather than depending on overstretched Council balance sheets. It will enable leapfrogging of existing landbanks and help unlock housing affordability.

    No Member of Parliament understands New Zealand’s housing policy problems as well as Minister Twyford. Shuffling him from the Housing portfolio might bestow a political win on National, but it will come at substantial cost to everyone harmed by broken housing policies.

    New Zealand has to build its way out of the housing crisis. Enabling that building is the most important task. And Minister Twyford’s broader agenda is our best hope of getting there. Focus less on how many houses the government builds, and more on the development enabled by the coming reforms.

  9. The Traveling Wilbur

    News just in: KK to endorse Agile. The popular one to wait six months and then selfie in front of a Kanban board.

    • I got told I’d be a great ‘scrum master’ the other day. Haven’t been at the bottom of a ruck in 15yrs

  10. https://www.domain.com.au/news/melbourne-property-market-to-stay-cold-this-winter-despite-winds-of-change-blowing-848535/

    “Sellers aren’t keen to list if prices are at the bottom. They might wait a few months until there’s a sign that prices are rising,” he said.

    If you’re an OO why would it matter if you’re buying/selling into the same market?

    “The jury’s still out. Winter will be a good time to see how it’s going,” he said. “You’re getting buyers really excited about the rate cuts and the APRA announcements.

    Excited? Hardly… I loathe the rate cuts + loosening of lending standards. It means more competition. Excitement is hardly how I would describe it.

    Otherwise this article is all anecdotes and nonsense.

    • Good one Gav.

      Here’s my prediction.

      Not much happens over winter. Flood of listings over spring. Pent up buyer demand leads to about three solid weeks of sales and auctions. Pent up demand exhausts by Oct while the flood of listings just rolls on and on. About the start of November – panic.

      • Phillip McCracken

        We will have the outcome of a good deal of issues unresolved right now.

        Trade war will be in clear light.
        Brexit will be settled (no deal)
        Italy will be out.
        Westpac ASIC / Maurice Blackburn results handed down.

        House prices will be down 15% In Melbourne and pushing towards 20% in Sydney.

    • Phillip McCracken

      There are literally – no APRA announcements. Reducing lending requirements from 7% to 6.5% is not good news for borrowers – absolutely nothing, not one thing changes unless HEM is back on the table.

      If anyone thinks that the courts in this country will see it in the interests of Australians to utterly destroy the lending standards of our banking system – something implicitly backed by taxpayer money they they have rocks in their heads.

      Westpac can not win against ASIC in my view – the case was already done. They certainly can’t win against Blackburn. And when Blackburn wins they will unleash the hornests nest against the others – they just went after the easiest ones first.

      Would love to see how buyers feel when banks are facing multi-Billion payouts for low lending standards and are forced to raise them or risk insolvency – investors paradise.

      https://www.youtube.com/watch?v=fPO76Jlnz6c

  11. The Traveling Wilbur

    Had to spend the *entire* day from stopping myself from saying: “Well if it is so efficient and it’s all thanks to that Japanese guy 30 years ago you mentioned in the first five minutes, want to explain why they’re all dying off, worked to death and their economy has been in the dumps for about just that long? Sounds great. Lets roll with it.”.

  12. I can’t comment on the immigration letter but congrats to MB for trying they have really put a lot of effort into this topic for a long time now. That should be published in the MSM news but it never will cos they are anything but independent.

    • The Traveling Wilbur

      +1. The effect of immigration on countries economically should be honestly portrayed so that it can be considered in a meaningul way by their populaces. Only ever seen MB, and MB only, come close to doing that in an honest and accessible manner.

      Then voters can decide accordingly and vote in an informed manner. Whatever that decision is being not my concern. But right now both of Australia’s major parties are taking voters for mugs on this, and that, that should be addressed. It is currently costing you and your descendants. Significantly, under the current policy settings.

      Personally I honestly can’t see a downside to limiting immigration to good looking rich people from what countries generally produce the most attractive ladies. But again, beside the point really.

    • The Traveling Wilbur

      However the irony inherent in having to copy and paste their own article to remake that point was not lost on this dear reader.

  13. The Traveling Wilbur

    Last one:

    The tale of the untold user story

    Pretty much anything the customers call to complain about the Monday following weekend-rollout.

    Assuming skype, call-centre ops and ticket handling app weren’t in scope. And Telstra didn’t melt anything. Of course. Otherwise have to wait for all the feedback emails to arrive. Assuming…

  14. The Traveling Wilbur

    And last one of these:

    I’ve only recently discovered that SQL isn’t really that popular in India after all.

    Cast issues.

  15. Indians ripping off Indians:

    In a case filed in the Federal Circuit Court, Mr Tendulkar alleges the Sydney-based company Spartan Sports International – which has since been renamed – agreed in July 2016 to pay him a minimum of $US1 million a year to use his image and promotional services to sell “Sachin by Spartan” products. The imagery included a distinctive silhouette logo on clothing and bats.

    https://www.smh.com.au/national/sachin-tendulkar-sues-australian-batmaker-over-soured-licensing-deal-20190613-p51xdx.html

    Are his bats not sponsored by Adidas? As I said a few months ago, the Spartan Sports guy is a fraud. That brand suddenly popped up out of blue and signed international cricket players like Michael Clarke – despite the lack of batmaking experience.

  16. So the second opal tower is in mascot. This is the last nail in the coffin for the apartment market.

    • Mystic MedusaMEMBER

      Whoops, sorry just realized that link also posted above. At the risk of stating the obvious, it must be so stressful and disruptive to be turfed out of your home like this. I don’t think enough has been done/is being done to compensate the residents. Was it Marcus Aurelius or another Roman emperor who made every builder or a member of his family sleep in any building they designed?

  17. Jolly Trollop 3

    Yep another crumbling apartment tower in Sydney LOL. This time in Mascot. Hope its one of the Meriton shitboxes.

  18. reusachtigeMEMBER

    I think I know why I hate youse all, you are all IT fkwits! I hate those guys!! They are seriously the losers that stink up the office with your curries. Makes sense you all gravitate to this failed state. You can’t comprehend normal life. Get back to your e=mc3.

    • haroldusMEMBER

      I’m not sure, but I suspect these comments may be reinforcing reus’ preconceptions.

    • Mining BoganMEMBER

      Pfft…I told you they were all nerds before you became the new improved reusa.

      It’s the only thing I’ve ever got right.

      • I’m sure there are dweebs and dorks among all the nerds. Someone here would have a link to a study of the statistical distribution of nerds, dweebs and dorks across a random sample of shut-ins. Well, if not to the study itself, then a link to a blog-post about the study. Or, perhaps to an opinion piece that has taken the blog-post about the study and turned it into a piece on the collapse of economic superstructure that only we can see while others blindly go about their day and unwittingly doing the bidding of their elitist neoliberal globalist overlords.

      • C.M.BurnsMEMBER

        more than nerds; more than tards.

        we’re nerdtards. it’s like a bad scifi movie where the alien evolves through the movie

    • The Traveling Wilbur

      And don’t forget Reusa some even work for non-profits and aren’t collecting contract rates off it. Shocking isn’t.

    • Yeah but Reusa us IT nerds gave you Tinder, the best tool for exploiting hot young women for easy relations. Surely that counts for something?

    • as I said before. I am happy Libs won. Now, my friend, stock up on popcorn and enjoy the show.

      • Is it bad of me to hope I keep my job while they screw the economy into oblivion so I can buy a house repossed cheap from some poor family who got evicted in a forced mortgage sale.

      • @angry man, bad but oh so understandable. Once you really understand a few unpleasant realities about the true nature of the world, not the bullshit we are fed, you just have to roll with it. There’s this thing called the internet these days, now more than ever there’s no excuse for being uninformed

      • @AngryMan, yes. Last thing I want is to screw some innocent family over. A speculative investor on the other hand.

  19. The Traveling Wilbur

    So, if Bonds return better than 10% for the next 11 months or less (super) OR if they outperform the ASX for returns (also super) over the next 5 months THEN I’ll happily take another sub.

    In the meantime, please put the lock icons back up. Thanks.

    • Dude that is stingy. I’m gonna presume you are investing serious money. Your sub will cost, what, 0.05% of your profits? And you’re quibbling?!

      (Plus, how will you know when to sell if you’re not a member?! 😁)

      • The Traveling Wilbur

        It’s comparative… not absolute… but still leaving me some way to tell whether or not I would have been better off NOT following the general MB MACRO themes of where to put money. So far, thanks to Trump and limited options I have available, MB is waaay behind (and I was still following along basically their one and only poor call then… for long time). But now I’m across that, any failure to make dough at at least the MB ROR will be entirely my fault.

        So I’m generously letting the sub ride just on whether I can do better than MB or not, with options for calcing that favouring MB. I am nothing if not making life difficult for myself.

      • I have found their broad long term macro calls good. Long USD. Long US stocks for a while. Long Aus bonds. Anything shorter term I try to stay away from.

        The only sketchy one is my decision not to buy a house over several years. I expect I’m …err… down a bit on that one. But it’s too soon to judge. We can judge when I do buy a house and then compare.

      • The Traveling Wilbur

        Pre Trump’s election MB were (and pretty much still are, but less vocally) calling China slowing massively and ASX carking it as a result of the slowing, housing crash, jobs crash, etc.

        OBOR was being derided. Ability / will for China to stimulate more was a ‘not possible’.

        Then Hillary lost. Then markets up and away. Then Trade war. Then stimulus maximus.

        MB have been right on everything else financial. Everything. And that’s amazing. No one else comes close. But why did they have to be wrong on the one pair I cared about (ASX and China growth)!

        The fact I realised they might be wrong fairly ealry on, even said so, and then still kept following a risk aversion strategy anyway is obviously my own fault. And Trump’s (so actually really some random black-American women in midwest and southern states).

        Doesn’t hurt less though.

        PS A house isn’t a financial instrument, not if you’re planning on living in it. So I would always put ‘how much extra is this going to cost me if I buy now’ thinking way down the bottom of the decision tree for purchasing. Right next to ‘the local koalas must have access to a man made sky bridge’.

        PPS MB calling housing prices to crumble and now (eventually) having gone backwards and calling the AUD to crash from when it was at over a 1.05 were miraculous calls both. The latter worthy of a Nobel. The former to come to full fruition has always been cast as needing a correspondingly timed black swan to tip things over. It really hasn’t appeared yet. And yet MB were still able to call things correctly to where we are now over the last three years. Prior to that it was always cross fingers as statistically speaking swanny can’t be too far away. Imagine how right they’d be if swanny turned up tomorrow given current conditions.

  20. Well I got made redundant Monday, been a tough week only 1 month pay as severance

    I know how tough it is going to be to get another job and with 3 young kids will be a hard slog until I find something, on the positive side we live rent free and have no debt with plenty of savings, not that it’s earning much now

    • Sorry to hear it 🙁. (What industry?)

      Sounds like your ship is watertight, hope the storm is brief and you can ride it out fine.

    • haroldusMEMBER

      Are you in Sydney?

      Don’t laugh but if you are desperate the STA are looking for bus drivers all the time.

      Often after a sh!t day driving home I see the ads and I go fvck it, I’m driving the 428.

    • Good luck! And yes that rate cut is pissing me off too. The house deposit isn’t getting much of a boost atm (and thank God for loving parents I can parasite off while going on an absolute spending strike)

    • @Brett I’m looking at quitting my job in 6 months, but depending on how the Economy looks and the jobs market I may try hang in longer. I originally said I’d quit in 2014! Look at me lol.. But I am thankful my mum has 2 houses in Melbourne and I can go live in 1 for a while.

    • Post GFC lots of yanks took a 40%+ hair cut after finding new work if made redundant, acerbated by duration of job seeking for conditions near par to previous terms.

      Then some ponder the larger ramifications of inelasticity, sorta like my mother in the 80s in L.A. She got the flick from the C-suite during a restructure and political skirmish at a T1 international concern leaving her exposed to late careeritis and narrow bandwidth industry application – even as a CPA.

      After her 6th go at marital bliss [was single for a spell] and after a few years post sacking the house purchased [500K] near Superstition mountains in AZ, plus 100K of improvements, the bloke carked it. Could not get more than the original price payed some 6 years earlier because of buyers preference of “new” [car smell] purchases [waves at Hugh].

      Long story short shes living in a double wide now.