Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Caution reigns across Asia with the somewhat positive mood on Wall Street unable to be translated into any meaningful gains on stock markets, with bonds moving higher and USD firming.

The Shanghai Composite was the standout however, coming back from yesterday’s slump to finish nearly 0.3% higher at 2985 points, still below the 3000 point barrier while the Hang Seng Index fell back, falling 0.2% to 26754 points, also remaining below weak support/former resistance at 27000 points:

Japanese share markets had minor losses despite a weaker Yen as trade concerns mounted, with the Nikkei 225 closing 0.2% lower at 21960 points. The USDJPY pair advanced only slightly as it remains above the 108 handle, and almost looks set to breakout to make a new weekly high soon:

The ASX200 is under pressure, falling some 0.2% despite a positive start, finishing at 6681 points. The Australian dollar was looking to make a comeback following last nights bounce but insteadhas moved lower in the afternoon session to be at the mid 68s going into the European session without much support:

S&P and Eurostoxx futures are down slightly as European markets open with the S&P500 four hourly chart showing a steady, if weak resolve around the 3000 point barrier, as traders continue to weigh up the outcome of the Saudi oil attacks and tonights FOMC meeting:

The economic calendar is packed tonight with UK CPI, EZ final CPI and then the FOMC meeting in the early hours of the morning.


  1. Only 38% Of Americans Believe Humans Mainly Responsible For Climate Change … Zerohedge

    Are Humans Mainly Responsible for Climate Change? … Statista

    By now, most people have accepted that climate change is real, and that it is happening. What we can’t all agree on though, is what the main cause is. As Statista’s Martin Armstrong notes, close to an absolute majority of the world’s scientists are adamant that we as humans are the main factor behind the speed and extent to which our climate is changing.

    When though, like YouGov, you ask the people what they think, the picture becomes a bit cloudier. … read more via hyperlinks above

      • Indeed. But the extent of “belief” does have profound implications for the politics of fixing it.

        • I understand the perspective Arrow2, but diverge on the possibility of an amicable political solution with any fundamentalists or those that pull their strings for power. In accepting it would open them up to questions about a great many things and that is not going to happen as it challenges their authority.

        • The reason for the lack of political will to tackle the issue is fairly simple:
          1. It’ll cost a fortune
          2. … detracting from the ability to fund hospitals and schools
          3. Doubts remain about the wisdom of tipping bil (pardon me) trillions of dollars into shaving half a degree off of global warming in the next 50 years i.e. risk/reward trade-off.
          4. How will it all be funded? (Printing money ….. because it doesn’t matter howmuch you print, does it Mr Mugabe?)

          In the meanwhile we have loons like Alexandria Ocasio-Cortez telling everyone that we can not only save the planet by spending trillions but actually drive the economy (broken window fallacy) and ‘create’ millions of jobs. Is it any wonder that the average Joe is a little sceptical?

          • Broken window fallacy … sigh … what a dog whistle …

            Did you annualize the balance sheet effects … chortle … maybe we should have had the same attitude about WWII spending, then the cold war, then MIC, C-corp and wealth set tax gimmes, et al …

            Your probably the sort that thinks war bonds funded the U.S. war effort …. groan …

            So Dominic what is the balance sheet effect for doing nothing in “preparation” for AGW, going to leave all that capital stranded. No wonder so many American cities have endemic lead problems with the water supplies, too much – profit taking – and sending the bill to the next generation. Fear not though as we all know what lead does to people and how that increases the profits of the prison industry, supports the conservative drive for more draconian criminal laws [authoritarian], so they can all nod heads together like head bangers as the smart people in the room.

          • Mostly, humans are incapable of fixing a thing leading to a crisis, until after the crisis.

            Sometimes that means we die.

        • That is why an anti-redistributionist platform like MMT is so damaging imo.
          People need to be told that these problems can only be fixed by forcing the rich to pay more tax and deal with the politics accordingly.
          A green new deal without Roosevelt’s soak the rich taxes of the mid 30’s is idiotic. Actually completely counterproductive.
          Because taxing the rich forces the politics to change to allow the new policies.

          • sad but true. we’d prefer to drive ourselves into a world which is less habitable, and substantially reduce our quality of life (or at least that of our children), rather than consider that the system needs changing.

            existing structures of wealth and power are clearly astroturfing and obfuscating the risks…but it’s no excuse for the myopia of the masses, the path is clear.

            but the last Australian election showed to me that, in the end we’ll choose someone who tells us we can have it all rather than have to deal with compromise and trade offs.

            unfortunately, it’s not how you fall…it’s how you land.

          • the last election taught me that media organisations need to be treated like political parties and journalists like political operatives.

          • Why complicate things with distribution nonsense? Any muppet – even a lamestream economist – will tell you that if you tax too much you encourage tax evasion or even worse, a re-location of a business to a more tax-friendly locale. It’s the equivalent of chasing your tail.

            There is a balance between what is reasonable and what is not. No sane individual is prepared to get out of bed every morning, commit their savings to start a business, work 24/7 if all they’re going to get out of it is the salary of some mid-ranking slob.

            Many people escaped the ex-Soviet Republic, not because it was oppressive but because they wanted to be rewarded for their ingenuity. Businesses drive the economy and unless business owners are appropriately rewarded for risking their capital you don’t have an economy. Period.

          • “Any muppet – even a lamestream economist – will tell you that if you tax too much you encourage tax evasion or even worse, a re-location of a business to a more tax-friendly locale”.

            Here is the problem with the disappearing capital scare story:
            Even if the standard employ-nobody-produce-nothing-tax/regulation-arbitragist “business” in 2019 were to uproot all their State protected IP, state protected market access, state protected limited liability, state protected education and training and state protected property to a tax haven like say Liberia – with it’s zero state protection for private property, market access, claims from creditors etc., there would still be a huge disincentive for the 1% to leave.
            ie. they loose their golf network, their family network, old school network, inner city club network, face to face meeting with their tax lawyer.
            Because this is what libertarians don’t get – and why capital isn’t going to disappear if you raise taxes:
            1. A business friendly environment *means* state protection
            2. What is really valuable to the 1% are the things which sit outside the marketplace built up over generations of patronage – ie. face to face networks – which are very hard to re-create in a couple of months when you relocate to Liberia.

          • Cough the PK MMT outlook is grounded in redistribution at onset, heaps of papers on it, primary complaint about non distributional economic metrics.

            Would be great if people read stuff before setting up strawmen …

          • Post Keynesian thought and MMT are on different wavelengths.
            One is a school of economic thought incorporating a sophisticated behavioural theory around uncertain expectations of prospective return and the knock on effect on money and aggregate demand – to give it no credit at all.
            The other is a public finance assertion.
            This is why some of the best critiques of MMT come from the Post Keynesian school.

          • Capital sets the regulatory forbearance these days, what was once a cold war Bennie for dominate C-corps became a cottage industry for anyone with the dosh to access it. Some ponder why we now have around 34T in tax havens being productive.

            Then some wonder why Volckers only option was IR and not taxing away upper bound inflation due to the Vietnam war spending, own goal for pitching the pro corporatism meme about the state stealing stuff.

          • Don’t know where you get that idea Sweeper, MMT is grounded in old school PK, Kalecki and others.

            Some in the MMT group are more financially driven like Mosler, thought the link to the French MMT paper would have cleared it up a bit, its not a hive mind groupthink cult.


            That’s not to mention my old compatriot Philip Pilkington from LSE, working for GMO now.

            But then its no secret that you have an orthodox streak sweeper, was suprised when you started playing Pft level games – MMT hates taxes … sigh.

          • the money in the tax havens still returns back to the developed capital markets through the offshore banks etc.
            for the libertarian argument to work the 1% would need to take real fixed assets and themselves to Liberia

          • Pft …

            Come on Banks and say stock by backs [equity pumping] are the result of the regulatory environment forwarded by the mercenary free market types – its not just banks in isolation or do you think dominate economics didn’t set the entire socioeconomic framework for people to get their groove on ….

            Just with banks you have a whole cast of characters, Mackenzie and Associates advice on fee structure, the dude that can’t be named for lowering the credit bar 2% for revolving debt, Chicago boys for derivatives [more important than IR for cheap credit], stocked pond of pro corp SCOTUS, democracy of money in politics, and lastly the economics that gave license too it all.

            You can’t have all these billionaires running around the U.S. whilst basic standards are going south for everyone else and say its all the banks fault. The entire social imperative is compromised whilst capital owns just about everything and expanding its claims to include the social narrative.

            I wish it was just banks, to make things more interesting some think going even more extreme into the unknown of the recent pasts antics is the best way forward. Just look at all the billionaires wild ideas for everyone, reminiscent of an old military poster in my day – officer charging up the hill encouraging all the troops up said hill, difference being they were not saddle with mountains of gear, web belt and holding a colt 45, everyone else looks like a over burdened mule ….

            Wellie off to another Queenslander, best bit is the bloke is a retired economist, quipped the other day about one of the Koch brothers buying the farm …. snicker …

          • “.. its not just banks in isolation…”

            Who said it was?

            There are plenty of other private interests perverting and corrupting various public interests but why make excuses for a privatisation and perversion of the public interest in the proper exercise of power with respect to public money?

            We have decades of evidence that our cosy state / private bank cartel in relation to public money is fundamentally broken and corrupted. What is more, every day there are more and more signs that this crooked cartel is falling apart.

            The most recent include the announcement that the Chinese are on the verge of launching a central bank digital currency which potentially could massively reduce the current role of private banks with respect to public money or render that role obsolete. The potential implications for banks and our western model that you like so much are profound.


            And it is not just the Chinese. Some western central banks (mostly non Anglo) are also talking about a fundamental reconfiguration of the state / private bank model.

            You make the mistake of confusing the monetary current status quo in the Anglo west with a permanent state of affairs. History is moving on.

            The important issue is whether we want a state monopoly on ALL money power which they Chinese are likely to prefer or a system where the state has a monopoly on public money power but there is plenty of competition from private monetary systems and foreign monetary systems.

            The western banking / monetary status quo that you support is likely to mutate into a new technically even more dominant complete monopoly on all money power that is thoroughly corrupted by private interests and bent on war against any foreign competition or private monetary competition.

          • Pft …

            That plank in your eye was not put there by me, so stop slandering me with it please, its Pavlovian.

            For the umpteenth time being on the side of Bill Black is not pro bankster, MMT is all about state money, and changing NAIRU, but you want to have your cake and eat it too. The term public money is a smoke screen for your groups views on money – period, once it has control over it, its free markets to the moon ….. let it rip …

        • Its a statistical slight of hand when setting up a question for a baseline, heaps of psychology on this gaming of statistics to support a predetermined outcome.

          Hudson fired Greenspan for fudging data only for him to be anointed the Maestro, must be something about blowing an over sized RE bubble to offset the Dotcom bust …… funnie eh …

          Milton Friedman wrote propaganda for the developer lobby and became the toast of the economic freedom and liberty mob, got a medal to prove it …

          Anti AGW beliefs [tm] has a propensity to be issued by those that have supported such wise men in the past and their predecessors, do you see a statistical trend ….

    • The Traveling Wilbur

      Yep. Good advice. In that job one always has… to tread carefully.

      Even more so for used car salespeople.

    • There’s a simple solution to this problem: just do what Apple do and programme in ‘planned obsolescence’. That way you’ll force people to spend around a $30,000 on a car every 3 years. What fckn moron doesn’t understand that concept? And if people literally can’t afford it then get the central bank to send them all a cheque. Problem solved. Gee whiz, get someone competent in charge of this joint.

      Just print da fkn monies …. (Lebowski)

      • This is already happening, many cars now require special diagnostic software in order to interact with the ECU (CANBUS etc..) and as a result are impossible to work on for small mechanical shops. Meaning you’re stuck with dealer based servicing. This is why I own a 20 year old Nissan which has 1 of the largest aftermarket part supplies attached to the platform / engine going around (RB26). I don’t think I’ll ever upgrade from here.. unless I buy electric.

        • You’re one of the few sensible people around. Mind you I don’t have the knowledge / ability to maintain my own vehicle so I’m a captive of the system.

          I bought a Toyata recently and since discovered that it has one of these diesel particulate filters and word on the street is they are not fit for purpose. Another headache to look forward to – probably just after the warranty expires.

    • Just have to be in “tune” with your customers. Some bright “spark plug” of a salesman or woman would be able to sell cars in Spain or anywhere really without grinding their gears.

  2. 19 hours ago

    Qantas boss accuses airports of having passengers, airlines ‘over a barrel’

    So when are the fake Greens going to nationalise the airports? And is Qantas stopping high speed rail from being built?

    KLM is totally ok with high speed rail because it is literally giving train tickets to those who want to fly from AMS to BRU:

    22 hours ago

    KLM is replacing one of its daily flights between Amsterdam Schiphol airport and Brussels with a high-speed train service.

    • proofreadersMEMBER

      Yep, Straya has principles and expects a half respectable pay day every time someone in the country sells it down the river … weekly?

    • proofreadersMEMBER

      Yep, Straya has principles and expects a half respectable pay day every time someone in the country sells it down the river … weekly?

    • From Human Rights Watch but their are many other freely available reports:

      “Today, almost 10 years after his death, the European Court ruled that Russia violated Magnitsky’s right to life by failing to hold an effective investigation into the alleged medical negligence that resulted in his death; that his detention conditions amounted to inhuman and degrading treatment; that repeated extensions of his detention was unjustified; and that his posthumous trial and conviction by a Russian court was inherently unfair.

      True, the judgment doesn’t break new ground in light of the court’s well-established case law on ill-treatment, death in custody, and lack of accountability for perpetrators in Russia.

      But you should read it to see the summary of facts submitted by Magnitsky’s representatives about the alleged embezzlement and tax fraud, which at the time was possibly the largest tax fraud uncovered in Russia’s modern history.

      You should read the judgment for its harrowing accounts of Magnitsky’s prolonged suffering and dying, and of the enraging mess that is the official account of his death.

      You should read it to feel the truly Kafkaesque ordeal Magnitsky, his mother, spouse, and lawyers went through as they desperately tried to find recourse, get him the proper medical assistance, and, after his death, to secure some justice and accountability for his death.”

      No words. Except Zerohedge has a suspiciously soft spot for Russian propaganda.