Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Stocks are getting a bit of a bid here in Asia as sentiment swings back to positive on more central bank dovishness. The USD remains strong as the Aussie dollar drops throughout the session, helping local stocks while gold has retreated from its recent highs.

Chinese stocks have come back slightly with the Shanghai Composite lifting 0.4% to exactly 2900 points while the Hang Seng Index is up around 0.3% to 28446 points. This puts it just below the recent set of highs at 28500 as the market tracks frustratingly sideways here:

Japanese share markets were the drawcard due to a much weaker Yen but also some mergers and tech stock gains, with the Nikkei 225 rising nearly 1% to close at 21620 points. The USDJPY pair continued its bounceback and is above the 108 handle again going into the City open:

The ASX200 had a solid showing with a 0.5% gain, closing back above 6700 points again at 6725. The Australian dollar helped here as its slow melt is turning into a proper selloff on RBA comments, falling to the 70 handle and almost breaking through key support:

S&P and Eurostoxx futures are up 0.5% going into early trade with the S&P500 four hourly chart clearly showing how it needs to break through this downtrend to gain any traction back above the 3000 point level as the disappointing earnings season carries on:

The economic calendar continues with the US earnings season plus the outcome of the UK Tory leadership and hence Brexit PM vote, plus US home sales data.

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    • The Traveling Wilbur

      fckn. epic.

      We should start a gofundme.
      To raise funds to pay them not to come back.

  1. Some in the Free Market posse will tell you that seeking profit is not a crime and private business arrangements are private. Then some wonder why banks and vast swaths of C-corp is so full of corruption and anti civil behavior.

    Some may not remember the good old days of debate, about altruism, and how those like Hayek et al said it was a weakness that needed purging so the market could find price.

    Seems some have completely forgotten the last 10 years, let alone 20+.

      • So many aspects are embedded in to society after so long a protracted period, so, whilst some globalist machinations might be wobbly, it seems only to force the focus inward regardless of consequences, with only the Bernays knob cranked up on the unwashed.

        One would think there was zero data on trade shocks or something and the results ….

      • ErmingtonPlumbingMEMBER

        But life expectancy keeps increasing.
        Soon you’ll need to be 120 to get your letter of congratulations from our future monarch,…King Harry.

    • I am not sure where you see a free market in anything. We have a rigged market suited to the political and corp elite, we have socialism when the ‘free’ market makes a bad decision (cladding) and we have communism when ‘free’ speach = anything but the agenda

      • Free market is an oxymoron markets cannot self-regulate, even very Conservative economist like De Soto acknowledge this fact.

        Its just a bunch of ideological gibberish deployed by libertarians to forward an utopian agenda.

        From the introduction on the INET site:

        Despite the manifest shortcomings of market fundamentalism that have been on display over the past few years, Block argues that these principles remain powerfully seductive because they promise to diminish the role of politics in civic and social life, which is a particularly attractive feature for the “haves” who want to maximize their assets at the expense of the “have-nots.” Since politics entails coercion and unsatisfying compromises among groups with deep conflicts, the wish to narrow its scope is understandable. But like Marx’s theory that communism leads to a “withering away of the State,” the flip-side argument that free markets can replace government is just as utopian and dangerous, as Block seeks to demonstrate in this interview.

        Fred Block discusses his book “The Power of Market Fundamentalism,” which extends the work of the great political economist Karl Polanyi to explain why free market dogma recovered from disrepute after the Great Depression and World War II to become the dominant economic ideology of our time.

        Neoliberalism is not new, its just old wine in a new bottle and reheated …..

    • drsmithyMEMBER

      Some in the Free Market posse will tell you that seeking profit is not a crime and private business arrangements are private. Then some wonder why banks and vast swaths of C-corp is so full of corruption and anti civil behavior.

      They don’t wonder, they redefine corruption as something that only happens in the presence of government.

    • We don’t have free markets. Bankers behave badly because of the government backstop and the monopoly granted on money creation. I’d remove the backstop and just let undercapitalised banks go to the wall. But most people love big government and so that’s why we had the GFC and its associated bailouts.

      • You silly boy … I thought I mentioned underwriting …. your mob enabled it to be corrupted for short term profit ….

        This gets right to the crux of the INET link above ninny …. your philosophy allowed it on a gold standard and now try and make out like fiat is the drama. To make matters even more surreal one only has to look at the economists during the neoliberal period to understand this joke about government did it, where do you think they got their cues from …. socialists – ?????

        The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective – by Philip Mirowski (Editor),
        Dieter Plehwe (Editor)

        What exactly is neoliberalism, and where did it come from? This volume attempts to answer these questions by exploring neoliberalism’s origins and growth as a political and economic movement.

        Although modern neoliberalism was born at the “Colloque Walter Lippmann” in 1938, it only came into its own with the founding of the Mont PElerin Society, a partisan “thought collective,” in Vevey, Switzerland, in 1947. Its original membership was made up of transnational economists and intellectuals, including Friedrich Hayek, Milton Friedman, George Stigler, Karl Popper, Michael Polanyi, and Luigi Einaudi. From this small beginning, their ideas spread throughout the world, fostering, among other things, the political platforms of Margaret Thatcher and Ronald Reagan and the Washington Consensus.

        The Road from Mont PElerin presents the key debates and conflicts that occurred among neoliberal scholars and their political and corporate allies regarding trade unions, development economics, antitrust policies, and the influence of philanthropy. The book captures the depth and complexity of the neoliberal “thought collective” while examining the numerous ways that neoliberal discourse has come to shape the global economy.

        We know Milton Friedman and George Stigler were busted for writing industry propaganda for developers only for Milton to become the top economic toast of the town espousing free markets. Sorta like Hudson firing Greenspan for manuplating data to become head of the Fed …. but yeah …. government …. sigh ….

      • Regurgitating trite propaganda is different to making a principle based argument. It’s sad that you’re only capable of the former. But not surprising.

      • You have to prove it Andrew, saying it with passion does not give it veracity.

        BTW I’m the one that gave David Friedman such a hard time on econ sites he decamped to reedit, his bastardization of physics was a sight to behold.

      • +1
        And there was once a time when that was the case. I think that time ended in 1986 when Keating deregulated the banks.

      • Banks and vast swaths of C-corps were acting badly way before the GFC, you remember the free market posse was ringing in the glorious new future just before it, proof of their ideology’s truth. In fact the 34T-ish in liquidity and back stops made a mockery of their previous notions of QTM due to a complete lack of so called hyperinflation. Might have something to do with the fed patting itself on the back for decades in fighting inflation when in fact it was a deflationary period.

        Now if some want to bang on about the financial wealth set utilizing the liquidity provided to negate a Minsky moment to invest in more financial asset pumping I think we have a totally different argument – it was the largest transfer of wealth upward in modernity. Calls into questions the perspectives of those in the lead up to the GFC and how they managed it post, others called for more fiscal expenditure, but the aforementioned said it was anti free market.

      • @ Andrew …

        Free is a wonky ideological perspective, when applied to markets it becomes incoherent because markets don’t spontaneously arrive out of no where E.g. it takes some kind of force to establish laws [yes ad hoc and compromise] to arrive at some sort of contractual state where people will trade with reasonable risk assessment.

        FFS I’m old school and would rather stay home than go broke in some “survival of the fittest” [aka how low ethically can you go – IBGYBG] just so I can maximize my “personal utility” so I can “achieve my personal potential”.

      • Yes, you’re agreeing with me. There are no free markets. Governments distort the state which would otherwise be. Moral hazard is the best example. If governments got out of the way, how would banks operate today? I’d hazard you’d only deposit into the banks with the best capitalisation, with segregated proprietary trading arms, and where senior management had put their assets on the line. But the government backstop and “regulation” of the banks leaves us with the bankrupt parasitic financial system we have today, and everyone just sticks their cash into whatever bank and the risk is socialised. And the biggest kicker is the monopoly on money enforced by the government, which means the whole system is held over our heads like the sword of Damocles. In a free market you and I would decide our own form of currency, which I’d hazard would be gold backed. To blame this on capitalism is myopic.

      • I’m not in agreement because markets have never existed in a vacuum of politics, like it or not, your perspective is so grounded in grudges about monarchs and aristocracy its absurd, yet at the same time have a visceral hatred of democracy [social] because in might impinge on wealth accumulation by a small set of society to the detriment of the rest and necessitate authoritarian measures in protecting individual property rights of the oligarchical class.

        Your still basing your so called intellect on concepts of equilibrium in the notion of natural something in inductive processes without any thing to back it up … save faith … not compelled by rhetorical embellishment by proxy of sophist verbiage ….

        I require proof …

  2. The Traveling Wilbur

    In other news: Vote one for Boris.

    But only as it might trigger the resurrection of Have I Got News For You in original form. For those who have never had the pleasure, Google/Tor/YouTube it. You probably want to start about two months prior to when the ‘HIGNFY host sacked for drug filled hookers holiday’ headlines started appearing. And then circle back to the beginning after that. It wasn’t quite the same after Angus left.

    • The last show he presented after the story broke was an absolute hoot and the deathnail for his gig there. It was awesome to watch at the time. It also reminds me of how sad it is to watch Aussies trying to do political satire. Almost as poor as the Americans.

      • The Traveling Wilbur

        Oh come on dude. America has some of the best political comedy related shows in the world.

        They are hosted by Candians, Jews and South Africans, admittedly. But they are very good. 😉

  3. The Traveling Wilbur

    A thought on: [my emphasis]

    Westpac has sweetened home loan incentives by almost doubling the rate discount offered to new home buyers that take out a packaged mortgage deal with the bank.

    In a move likely to trigger responses from the three other major banks, Westpac has boosted the mortgage rate discount for package borrowers to 1.29 per cent from 0.7 per cent.

    Yes, well, you wouldn’t want to be at least one of the “three other” banks. The problem being, when you decide to set one and only one reference rate for ALL your package product holders (to screw as maaaaany as possible as long as possible) it becomes very difficult to offer only new borrowers a larger discount than existing borrowers are getting on exactly the same product. With the same annual fee.

    • proofreadersMEMBER

      And the solution is to further screw retail depositors, with the full support and blessing of the RBA happy clappies?

    • This isn’t not a bank acting in a normal competitive manner, this is the kitchen sink being thrown in desperation.
      I really wonder just how much trouble Westpac is in behind the scenes.

    • ScoMo has got to Aunty and now promotes property. They should have degrees in propertyology where you can study the 7 year cycle of doubling of values and how negative gearing is good for humanity and landlords who have a go, get a go. Stuff like that. Forget BS degrees in humanities this is a world first and we can lead.

    • I would comment that borrowing money is always dumb. But MBers just love debt and think its great for cars, worthless degrees and airmiles.

      • You forgot flammable investment property… yields bugger all, but at least there are millions in remediation works to negatively gear.

      • The Traveling Wilbur

        What do Australia’s modern universities and recently ‘discovered’ outbreak of flammable buildings all have in common?

        A: By the time they’re finally officially useless, they’ll each have generated about a million useless degrees.

  4. haroldusMEMBER

    Just trying to go through the tortuous and bleedingly expensive process of paying green slip and rego.

    Had to update my address with NRMA (charging me an extra 100 bucks a year for comprehensive as I’m now parking on the street) but can’t update address for CTP.

    Instead they provide a link to Service NSW, of which RMS looks to be part of. Have updated address and have email confirmation from RMS.

    Back to NRMA, refresh, still no option to edit, try to contact.

    The “contact us” page contains reams of FAQs and hidden in tabs on the RHS you have to hit contact us again and below the further FAQs there is one of those boxes you fill in, not an email address.

    This always bugs me because I have no email trail and you have no evidence the message went anywhere.

    Anyhow, waiting for NRMA to get back to me.

    I think I had similar problems I whinged about last year too.

    • It’s a dumb process if it doesn’t appear right away call them. They had 1 digit of my license plate wrong..!

  5. Drugs to the police door.
    Eastwood in 2019, is such a vibrant place, one ethnic group stays on one side of the tracks (railway line), whilst another keeps to the other side, they rarely mix. And who do we thank for splitting Eastwood along two ethnic lines – why its John Winston Howard as the vibrancy developed when he was the local member.
    Much more vibrant than the 1960’s where people of English speaking backgrounds, Italians and Greeks and other nationalities all mingled together in the retail strip at Eastwood.