Links 19 February 2020

Global Macro / Markets / Investing:





Leith van Onselen


  1. The Traveling Wilbur

    I think I’ve got this bond purchases thing figured out. The trick seems to be buy low, sell high. Simples.

  2. From the AFR:

    Australia is dangerously dependent on imported medicine and as a matter of national security must develop “some level of sovereign capability” to safeguard supply, a report finds.

    “Australia imports over 90 per cent of medicines and is at the end of a very long global supply chain, making the nation vulnerable to supply chain disruptions,” the report says.

    “These factors can include manufacturing problems, difficulties in procurement, political instability, pandemics, another global economic crisis and a range of natural disasters.”

    • Arthur Schopenhauer

      Most of the aluminum facade systems that were once made in Aus are now made overseas.
      With the shut down in industrial capacity, we are going to see a slow down in larger construction. Lack of facade elements, doors and windows.
      If only we had a government that could use this crisis to the nations advantage…

      • Stewie GriffinMEMBER

        Humanity is enamoured with itself in regards to the supposed complexity of humanities activities, as best represented in the complexity of its economies, being its supply lines, logistics, manufacturing, ect.

        The issue is, as I have mentioned previously, that his ‘complexity’ is in fact only superficial compared to real complexity as observed in nature. A poor but effective analogy is the comparing the complexity found within an 2D organisational chart for an organisation and the complexity capable of being observed within say the 3D CAD schematics of say a High Rise office building.

        If you remove a single line on the organisational chart, then that organisation could well be thrown into utter chaos, where as if you remove a single line in a 3D plan, you may very well not notice. Similarly in nature the level of complexity and redundancy for environmental systems is extremely deep (that is not to say human’s haven’t been busy reducing it) such that it is possible to remove a single species from a particular environment, and it not being significantly noticable – there are plenty of redundant actors capable of filling the void.

        This issue with humanity’s superficial complexity, is that superficially complex systems are prone to cascade failure – this is what we are starting to observe now, with China and something that will be increasingly obvious in the weeks and months ahead.

        • The Traveling Wilbur

          Dude. Wrong Beer. It’s not the Cascade virus… it’s… 😋

          But yes, and love the analogy. Humans designed to build minimalist over robust 7 days of the week. Even Noah.

    • you would be shocked how commonly simple hospital staple medicines/therapeutics are in ‘short supply’. Common antibiotics, IV fluids which are the staples of rehydration, volume therapy and giving with antibiotics etc., medications for preventing clots in legs…

      It’s not just in Aus, but happens in america also. All it takes is a flood/storm in the third world (central america, china etc.) and it knocks out their produciton capacity and we’re suddenly caught out. I’m not sure whether this is just because they’ve signed a contact with one company only, but I can’t see why medicines of all things couldn’t be manufactured here. At least setting up the factory for when the $AUD tanks and we become the third world.

  3. Stewie GriffinMEMBER

    Emmanuel Macron vows to ‘win the battle’ against Muslims creating separate communities in France.

    Emmanuel Macron today pledged to ‘win the battle’ against Muslims creating separate communities in France… Pointing to ‘communitarianism’ – the creation of self-governing communities within the state – the premier said he was sick of hearing about children being taking out of school because of radical political ideas linked to Islam.

    For those who support MultiCULT this is the endgame to ‘Multiculturalism’ – parallel societies constructed within and displacing our own society i.e. invasion.

    If you believe that MultiCULT is enrichment, or that diversity makes us stronger or more united, let me just say you’re either a gullible, naive fool or are so weak minded to have been completely brainwashed by corporate propaganda (which is so obviously false and contrived to support the mass migration narrative) that quite simply, you don’t deserve to have the vote.

    Progressives are destroying our society and ensuring near unending conflict and bloodshed in our future, simply because of their moral vanity and fear of being called rac!st.

    You’re all phucking idiots.

  4. China continues to intensify COVID restrictions.
    – Shanghai schools now closed indefinitely
    – Apple production not to restart for 2-3 months
    – All Wuhan residents now confined to their homes and all private traffic banned.

    The ‘hand’ is very much at odds with what the mouth is saying right now.

    The Art of War says that war is all about deception and the an enemy must see you as strong when you are weak… Xi has called this a people’s war, and I think the art of war can tell us how he is approaching this epidemic.

    • In Jinan cough syrup sales are banned and everyone who has bought any this year is being traced. Looks as though they intend to screen for IgM antibodies using EIA test kits going forward to catch all those who are infected without symptoms and wandering around……CT scanners are not for mass screening. These antibodies can persists for 6 months after infection.

    • Arthur Schopenhauer

      A few friends have been sick over the past week with symptoms that map to corona.

      I think it’s out in the wild here, but the symptoms are less severe (who knows why) in the Aussie population. It’s a sample of 3, so time will tell.

      • There is the suggestion that Coronavirus was created as a strain to develop vaccines from. Vaccines that would work on Chinese people. So when it leaked from the lab it has a preference for Chinese… ol whitey blacky brownies might not have a massive issue with it.

        Time will tell.

        • Plenty of conspiracy theories out there. Another doing the rounds is it is actually the vaccine that was released and the CCP is locking the country down to contain it within its borders. Later, the more virulent variety gets released into the western world!

        • Arthur Schopenhauer

          A more prosaic explanation is the researchers were using their own blood to test vaccines. The subsequent vaccine is more likely to target that particular blood make up. (I have no knowledge of biochemistry or microbiology. Coming from a mate work works in the field. Please correct me if this is totally implausible.)

          Saves on masses of paperwork and is very convenient apparently.

      • Posted this on another article, get your friends to sign up.

        If anyone is interested I take part in a flu survey each year. It’s very easy just a few checkboxes and submit, takes about 15 seconds and they email you the link every Monday. Good thing is they give you the results each week too and compare against previous years, so pretty interesting. This year they are apparently going to include questions for the covid-19 virus, so might be worth getting as many as involved as possible.

  5. For those that wobble on about central banks and immigrants

    Just so there is no confusion … you know the part that comes before journalism …

    Basically, the classical model is a model for a corn economy: households decide whether to consume the corn or to save it. If it is saved it can be supplied to investors who sow the grains, repaying to the households one period later the credit amount plus interest.

    In the Keynesian model the ‘funds’ exchanged on the capital market are made up of money—‘funds’ are bank deposits. Funds are not created here by a renunciation of consumption but by the banks granting credit …

    In the classical model, there is a strict crowding out of private investors on the capital market by government deficits. The all-purpose good, which functions equally as ‘funds’ and as investment good, can only be used once.

    In the Keynesian model, on the other hand, ‘funds’ (money) and investment goods are independent of each other. Therefore there is no crowding out on the capital market, if deficits are financed by banks or the central bank. This is the fundamental insight of Modern Monetary Theory …

    Young students need to wake up and realise they are being taught models whose laws of motion are as inconsistent with reality as Ptolemy’s world view. We need a ‘Fridays for Keynesianism’ movement. – Peter Bofinger

    But yeah …. feel free [tm] to gnash teeth and rend hair over the derivatives of a far more fundamental problem, focus on the out put … chortle ….

    • even during 16th century Italy when all money was supposed to be gold, banks were creating money by issuing more gold certificates than the amount of gold they had

      how can anyone believe that all credit is someones savings

      • It’s not that we think all credit is someone’s savings. That accusation is a piece of stupidity promulgated by people with some agenda of their own. The fact that it is not the case is at the core of many of our problems – economically, socially and environmentally.
        What we argue is that for someone to borrow someone ought to have saved – with a few marginal adjustments. If nobody saves and we just create credit than that is a policy of exploiting the limited resources of the planet as quickly as possible. To believe that savings are not needed nor desired you have to believe that the planet can provide unlimited resources forever.
        Now, which belief is non-sensical.

        • The Traveling Wilbur

          Careful, if you go round casting stones at entities created from nothing like the basis for MMT then I’m certain you’re going to fall foul of the new anti-discrimination of religion laws when they pass Parliament in no time.

          • Your comment has to be the neon sign for the abject rejection of any knowledge, about anything, because it does not conform to your environmental biases. You just get to spew ignorance is bliss without even a modicum of evidence to support it, its entirely emotive, completely unidentified, parallel would be smells bad and take it from – me – I know what smells bad – expert opinion [tm].

        • The failure of basic logic here is astounding.

          The argument clearly denotes the antiquarian framework is not applicable to our currant reality, for a long time IMO, not that hard money proponents can never square that it was only a physical token of perishables to serve the State. I mean orthodox economics never even looked at the monetary or financial system yet felt authoritative enough to bang on about contractual standards, government oversight and regulation, and a cornucopia of other factors which directly effect economic outcomes before one even starts banging on about money – money responds to the aforementioned after the fact.

          Don’t even know what to make of your special plea about “economically, socially and environmentally” issues considering the historical back drop, accelerated during the post WWII EMH period by orthodox economics – lmmao at fracking. On a personal note I remember your umbrage and not being able to cut some trees down on your land to increase productivity in the short term.

          Sorry Flawse we don’t pay back the past in stuff, before money tokens people used credit as a “social contract”, money is not a workaround barter et al.

          The shocking thing [giggle] is you never even engaged in the argument presented, instead were treated to your version of Aesop’s Fables, thick moralization’s about how humans should organize due to the “natural order” of things.

          All your ills are self inflicted and you have no authority in forcing anything upon others.

    • “models whose laws of motion are as inconsistent with reality ”
      Plucking brilliant!!! At last! After all these centuries – a Perpetual Motion Machine. All our problems are over.

      • Are you suggesting money only comes from a hole in the ground after non human agency natural formation. Lmmao.

        • It’s because you never ever use a single ‘brain muscle’ that you think that us what I said. Maybe you can parse what I said and tell me which particular part of it tells you I said anything like you claim.

          • When you grasp the fact those maths and physics are just the extenuation of some wonky philosophical – ideological axioms.

            Yet to hear anything, from anyone, that has feelings for wave theory I find that absurd.

  6. A thought about the virus. A few videos and photos doing the rounds of people suffering heart attacks or cardiac arrest after a “2nd bout” of the virus. This sounds to me like viral cardiomyopathy rather than a second bout. Basically, the heart becomes inflamed and weakened by the virus. People feel fine and go back to exerting themselves when they are actually still in mortal danger.

    This can happen with many viruses albeit rarely. I know of a super fit rock climber who suffered a cardiac arrest after rock climbing too soon after contracting a virus. A bit of a worry that there seems to be many anecdotes of this in regards to nCov.

    • The Traveling Wilbur

      Dumb question time: any signs to look out for that might indicate you’re in that post-flu danger period?

      • I am not really qualified to answer that. I only know about this because rock climber was a friend’s schoolmate who died in the 90s in his mid twenties.

        I presume you might get lucky and get puffed out a little easier. I train a fair bit and don’t push myself within a few weeks of catching anything more serious than a mild cold.

      • From a medical perspective although not medical advice

        Symptoms of cardiomyopathy can include shortness of breath (rest or exertion), shortness of breath when lying flat (relieved when sitting up) and waking up gasping for breath at night. You might notice you’ve got swollen ankles or veins in your neck are severely distended when they weren’t previously. You may also be completely asymptomatic.

        Not everyone gets a viral induced cardiomyopathy and not all viruses cause it.

        Unfortunately it’s not so far related to exertion, but the decrease in heart output due to the damage to the heart and potential implications on the conduction of electricity in the heart.


    New Zealand’s strongest house price growth is in areas where prices are lowest, such as Porirua and Invercargill … Greg Ninness … Interest Co NZ

    House price growth remains strongest in Wellington and several provincial centres and much weaker in Auckland and Christchurch, according to the Real Estate Institute of New Zealand’s House Price Index (HPI).

    The HPI probably gives a better indication of market price movements than either medians or averages because it allows for changes in the composition of housing types that are sold each month. … read more via hyperlink above …
    New survey ranks NZ’s most and least affordable cities … Anne Gibson … NZ Herald

    Tired of the traffic hassles and back-to-work blues? Thought of moving to Christchurch to get a better life and lifestyle? That city turns out to be by far our most affordable when incomes are compared to house prices.

    Down south, the house prices are low but the incomes are high and out of eight areas just surveyed throughout New Zealand, Christchurch house-buyers have by far the best deal financially. … read more via hyperlink above …

    • Butter bar flexian Buttigieg or sorta like Trump … unwashed proles project your ignorance upon me and I will make your wildest dreams come true [tm].