Macro Afternoon

See the latest Australian dollar analysis here:

Macro Morning

Asian markets are not responding well to the weekend news, with non-mainland Chinese stock markets selling off broadly. Korean stocks are down more than 3% while local stocks are off 2%, as the fear surrounding the coronavirus from China spreads. Gold and other currencies gapped wildly on the Monday morning open with the shiny metal up another $20USD per ounce in what looks like a blowoff safe haven FOMO trade.

The Shanghai Composite is just hanging on, down a handful of points to be at 3036 while the Hang Seng Index is down 1.4% to 26902 points as it wipes out any short term support and looks set to re-kill this dead cat bounce:

Japanese share markets are closed for yet another holiday while the USDJPY pair gapped lower alongside other risk assets, almost breaking the 111 level before recovering the mid 111 area but still looking very weak here:

The ASX200 closed a whopping 2.2% lower at 6978 points, wiping out the 7000 barrier and all of February’s gains. The Australian dollar gapped significantly lower after its big blip higher on Friday night, and has barely recovered to just float above the 66 handle as it hovers at another year low :

Eurostoxx and S&P futures are dropping fast with the dour mood here in Asia, as the four hourly chart of the S&P500 clearly shows. With an opening price probably 1% or more lower, this could get ugly fast, with the previous ATR support level wiped out as last weeks bearish rising wedge pattern becomes fulfilled (good Dog below I love that pattern!):

The economic calendar is relatively quiet tonight with the latest German IFO survey, then the Dallas Fed manufacturing print, plus the usual slew of Treasury auctions.

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Comments

    • The Traveling Wilbur

      Yep. Gav should buy a house more often.

      And bonds. Just how amesome are bonds. Another week of this. 👌

        • The Traveling Wilbur

          That was a great movie if I remember right. You only sell bonds, twice? That was the one?

          PS DAX… Living and let dying indeed. This, plus VIX, is finally getting serious. That 10yr US/AUD spread is *below* 50. Eek! GFC moves eat your heart out.

          • Wow Vix up 46% in a day… forgot you can trade that … d’oh.
            Wonder if any short Vix ETFs went bust again this time…

        • The Traveling Wilbur

          Indeed. I’ve been wearing bonds since Rio moved their manufacturing outside of Australia. How did I notice that? My washing machine started eating the (rio) undies. Pack afer pack just disintegrated. (German washing machine).

          8-years later, bonds going strong. Same ones.

      • For the record spent the first night in my own house last night. Best night sleep I’ve had in ages. So quiet in my street and just a comfortable home. So good not to rent.

      • TheRedEconomistMEMBER

        Yeah a smart kids that tells it as it is….

        He has a quite a following and it is only a matter of time before the kids out their wake up…

        Right now it feels like the late 80’s early 90’s

        Recesssion… teenage angst… kids waking up to the bullshi!t they are being fed…

        Go long Cordorouy duds and Flaneys!!

    • Maybe you should watch the recent interview he posted with kevin rudd

      Where he basically sucked kevin off for 50 minutes

      I cringed so hard I think I sprained a muscle in my face

      Obviously, no questions about china or immigration

      • TheRedEconomistMEMBER

        Yeah I watched it…. But it was about the media and mis-information…

        China and immigration is definitely on the nose… I reckon the friendlyjordies will look into these issues as well…

      • I watched it with a mate and I had the same reaction. My mate was perplexed as I usually love jordies, I had to explain that I love when he gets stuck into people not watching him wank off his hero. To be taken seriously you have to ask the hard questions of everyone, even your heroes.

          • The core difference is Rudd wrote an article that was anti Hayek before becoming PM, only to have the right wing of the labour party have a tanty when he won – deployed the totalitarian memes ….

            Sorta like the Blue dog Corporatist DNC Dems are having about Sanders right now …

            Then the GFC hit and most here were more concerned about hippy punching occupy and that socialist commie Obama … not encouraging from a cognitive point of view in retrospect …. chortle …

        • Yep, it was a little cringey. Let’s face it – Rudd would not have agreed to the interview without the agenda being pre-set and final editing rights etc.

          Let’s face it – the best commentators, political cartoonists, comedians, satirists etc are those that dole it out in equal measure irrespective of their true political leanings.

    • I love the music used in this video. I must have sat through too many feature videos of real estate in the last 5 years and seen 100 RE agents that love themselves too much. 🙂 Although I feel he could have done better in the pisstake stakes here.

    • My guess is that shortened tours contribute to this. If NZ had a few weeks of red ball warm up games here they would have been more competitive. Even with their injury problems. The same goes for India in NZ.

      • 3.5% is the cost of doing business.

        In Australia the psychopaths at treasury won’t even look at that. It will be pension saved vs drop in GDP.

        • Mining BoganMEMBER

          They’re going to look through deaths like the RBA looks through inflation!!??

          That sounds more than a bit careless.

          • The Traveling Wilbur

            Hmmmmm… let’s see. Targets olders… And from what I can see (no data) prefers males too. And is wipping the floor with Asia (compared to the rotw).

            China’s in Asia right? And has an excess of what due to dubious practices from the ‘one child period’?

            Problem solved Mr Xi?

          • happy valleyMEMBER

            And presumably the ABS will be running the numberwang?

            So, Minister what number is relevant?

          • Treasury won’t look through it. They will see it as an opportunity to replace a pensioned retiree with multiple tax-paying immigrants.

            Then there are these big houses being sold to make way for more highrises, more tax paying slaves, and more GDP. Highrise Harry must be terribly conflicted knowing that Gina’s #1 spot would be in reach vs the high probably of death.

          • For sure. They’ve probably done the numbers on the number of deaths vs the cost of not letting students back into the country. That said, given how good these fvcktards with their predictions, expect half the country to die while they keep tell us the future looks bright and we’re just about to enter an upturn.

        • I reckon the death rate is much higher still for some demographics. But you know what, f $#@÷=k em. These money hungry politicians and wealthy pulling the strings are all double my age, all semi obese or full on obese, chronic health conditions a plenty, they will be the hardest hit. Let em get a taste of their own medicine for once. No one will escape this virus if they open the border as they want to.

    • Fake news! Gotta be, right?

      Xi rang Jack Dorsey, personally? Who TF knows. This world is topsy turvy right now. Anything is credible.

  1. There’s a some people on reddit keeping an eye on the disruptions to global supply lines. Pretty interesting and lots of good information.

    https://www.reddit.com/r/supplychain/comments/f87aec/covid19_update_sun_23rd_february/

    Here’s a peek:

    Hong Kong coffin shortages – the South China Morning Post reports that manufacturing stoppages are creating a shortage of coffins in Hong Kong (https://amp.scmp.com/news/hong-kong/health-environment/article/3051924/coronavirus-killer-disease-leaves-hong-kong). It has asked for government support to get supplies moving again, alternatively it will have to find other SE Asia supplies but these are up to six times more expensive.

  2. ‘When you get the coronavirus, the official recommendation to treat a runny nose, sore throat, cough, and fever is to lower the rate hedge funds can borrow at from 1.5% to 0%, and increase Treasury purchases to $200 billion per month.’

    • Injections of liquidity also work a treat ensuring that any survivors get left with inflated assets.Not much help if you don’t make it but your heirs will be grateful.

    • Lets see how this plays out. Will the people continue to go to work and make plastic crap for the west, while dying at the same time. Are they willing to make this ultimate sacrifice to ensure that the CCP maintains power over them and saves Emperor Xi’s all important face.

      • A fair question. Foxconn is apparently having trouble gets workers to come back to the factory. Offering big financial incentives. People don’t like the risk… living in a dorm and all.

        • Plenty of food in the country. 20 years ago a lot of the current urban population would of lived out there, they could always abandon the jobs and cities and head back. My grandad did great during the depression, lived near the Snowys, survived on rabbit and trout.

  3. Might give Qand A 5 minutes tonight. Talking about Corona virus but will probably descend into how racist we are.

  4. Planning a cruise to China with the missus, stopping at some islands to sample different bat breeds and recipes.

  5. I see the MSM in Australia is starting to wake up to the reality of COVID-19. It will 100% become a pandemic.

    The below line actually appears in the Age (passed editorial I presume):

    “People with chronic illnesses should consider stocking up on a supply of essential medications, other experts warned.”

    https://www.theage.com.au/national/experts-warn-of-global-coronavirus-pandemic-and-local-sport-cancellations-20200224-p543u0.html

    SHUT DOWN THE BORDERS or PEOPLE WILL DIE

    How FN hard is that to comprehend?

    What the F is the point of ‘border force’?

    Scummo? Where’s Scummo? Hawaii?

    WUHAN has just REVERSED its quarantine relaxation.

  6. Eric Feigl-Ding
    @DrEricDing 3m
    CCP Flag of China central govt just *REVOKED* Wuhan government’s lifting of the lockdown claiming it was unauthorized. Ummm, someone is in big trouble and/or someone is revolting against Beijing.

  7. Talking to ppl at work or friends about Coronavirus and it seems the govt is a true reflection of 90+% of its citizens. It’s just the flu bro…

    • They say that because the don’t feel the risk is personally real. They will feel differently when it lands here.

        • They need to make it understandable to the punters. Give it a man-flu rating. Imagine the fear it would invoke in the populace if it had a man-flu rating of 5 or higher. A 2 is enough to break the will of most. Only the hardy can make it through a 3. A 4 is insanity inducing in patients, and the poor carer. A 5, that’s when it goes to h3ll.

  8. The Traveling Wilbur

    Wow.

    Bunnamagoo Estate
    Cab Sav Merlot
    2014

    $25.00. Worth at least, at least, twice that. You will thank me.

    • Mining BoganMEMBER

      The little puff of dust is a quite sad. All the grandiose dreams to end in no more of a finale than someone tossing a rock on the ground.

      Still, loons are gonna loon.

        • The Traveling Wilbur

          Yeah. I thought that. Then I saw the chute get chewed up on launch. Poor bugger went the full ride without one. Knew it *all* the way down. Unimaginably horrific.

          • Now imagine SmoCorona in the hot-seat (as it were)… suddenly the whole thing makes me smile from one ear to another.

        • Found it sad that producers and film crew followed and likley fuelled the mad man to go through with it. Exploitatitive film production turned into a snuff production outfit.

    • I personally thank him for leaning into the plate and taking a hit for the team … exemplar of Darwin Award …. best bit is it was a solo act.

    • ErmingtonPlumbingMEMBER

      So many other things Mr Hughes could have spent his $18000 US on before killing himself in a more thrifty manner..

      Things like,…..

  9. This has global recession written all over it, not much monetary policy can do if nothing is moving. Australia to be hit hard, unemployment to rise rapidly and house prices to implode from here.

  10. Fkven Aaaaaaa …

    Kenneth Rogoff of Harvard recently argued that fiscal stabilization policy “is far too politicized to substitute consistently for modern independent technocratic central banks.” But instead of considering how this defect might be overcome, Rogoff sees no alternative to continuing with the prevailing monetary-policy regime – despite the overwhelming evidence that central banks are unable to play their assigned role. At least fiscal policy might in principle be up to the task of economic stabilization; there is no chance that central banks will be …

    A less skeptical observer than Rogoff would have looked more closely at proposals to strengthen automatic fiscal stabilizers, rather than dismissing them on the grounds that they will have (bad) “incentive effects” and that policymakers will override them on occasion. For example, a fair observer would at least be open to the idea of a public-sector job guarantee of the sort envisaged by the 1978 Humphrey-Hawkins Act in the US, which authorized the federal government to create “reservoirs of public employment” to balance fluctuations in private spending …

    To be sure, both the design and implementation of such a job guarantee would give rise to problems. But for both political and economic reasons, one should try to tackle them rather than concluding, as Rogoff does, that, “with monetary policy hampered and fiscal policy the main game in town, we should expect more volatile business cycles.” We have the intelligence to do better than that.

    Robert Skidelsky

    https://larspsyll.wordpress.com/2020/02/23/the-new-keynesian-monetarist-fantasy-is-finally-over/

    My favorite twiddle –

    “Back in 1994 Laurence Ball and Greg Mankiw argued that although traditionalists are often called ‘New Keynesians,’ this label is a misnomer. They could just as easily be called ‘New Monetarists.’ …

    Mirth ~~~~~~~

    • Rorke's DriftMEMBER

      Central banks are playing exactly their assigned role. Private control of the money system including price and availability of credit. Rogoff is just an insider supporting the current system with academic bulldust. Burn it all down and start again when the revolution comes is sound advocacy for change. But forget about tweaks to make them more accommodating to the public interest, that’s not why they were created.

      • Ugh with the revolution shtick … new boss same as old boss paradigm.

        If you read through it more it highlights the ideological underpinnings of orthodox economics, sans that we have lots of tools in the tool box and destroying the village to save it seems to have a bad after taste except for those in power aka Capital – so be careful of what you promote.

        We’ve been down this road before post Great Depression, heaps of evidence on what works and what does not. But I will say it makes a mockery of those that ever presented Friedman as a rigorous economist and not some ideologue soothsayer with benefits.

      • ErmingtonPlumbingMEMBER

        “Rogoff is just an insider supporting the current system with academic bulldust.”

        Same common phenomenon in all the non scientific “academic disciplines”

        • EP …

          Some people confuse maths with science, especially when used by above economics camp E.g. maths is symbolism which can be used by science.

  11. Asking for a friend- If you transfer all your Super into Cash option, and the Bank is bailed in, what is the outcome for said funds?

    • I’d hazard a guess that it isn’t treated any differently. Mattress Fund would be your best bet for cash should a bail in occur.

    • any funds in super, even if they’re listed as ‘cash’ will be treated differently to cash held directly by individuals in ADIs.

      Ie – the only way you’d lose some of your super that is held in cash is if all super funds were specifically part of the bail in.

        • isn’t “cash” in a super fund not just “cash” but “cash like” assets ?

          And with super funds, they don’t hold assets in your name in your fund, so any super funds holding cash would count as institutional holdings at a bank and not retail deposits.

          • innocent bystander

            cash is an asset.
            where does it say only retail deposits can be bailed in?
            what about SMSF cash? They are super funds.

          • my point is that cash held as super is a very different asset class and would require very different legislation that specifically bails in super assets.

            It won’t afaik be bailed in as part of a retail deposits (if you have more than 100k in the bank as an individual) bail in.

            that’s not to say that when the SHTF Scotty from marketing won’t go bail in retail deposits AND super fund assets

  12. Again, where’s Scummo?

    Pathetic turd.

    What a time to have a mental-case-rapture-cultist as a PM.

    Straya’s luck.

    • we get the politicians we deserve. Can thank Fatty McFkhead, Poorlean and all those QLDers that ‘protest voted’ for them

  13. Well, sh1t certainly got real on the ASX today. I bailed most of my Super out of equities a few weeks ago and watched the markets immediately shoot up. Sooo…didn’t time it quite right, but close enough.

    I guess some of the “she’ll be right” financial people have suddenly found out about the “all youse cunce are fukt…all of youse” medical people.

    It’ll be interesting on the S&P overnight. Time to buckle up.

        • honestly have you guys even been paying attention since 2008?

          I feel like I’ve had this conversation on this website maybe half a dozen times (PIIGS, brexit, trade war – there’s just too many to mention)
          Every time the same result

          “This time is different”

          None is so blind as the man who will not see

          • Possibly. Although this is the first time I can recall that the ructions have been caused by something genuinely of the REAL world (and real economy). Something that kills people, shuts down factories, shuts down countries. Not some financial markets construct like all those other examples you give.

          • I would only add that it seems the FDIC now covers derivatives and contra last time the insurance might have baked in.

    • I messaged my family Saturday to look at their supper as I was 80% defensive, and put my wife the same.
      My wife was upset I didn’t tell her, even though she doesn’t know what I did exactly! Today she is still annoyed with me

  14. ErmingtonPlumbingMEMBER

    Seems like a good read,

    “The managerial elite has sought to blame anyone but themselves for the rise of populism. Their culprits include Russian meddling, white nationalism, a vaguely defined illiberalism—anything but liberal values and economic arrangements. Lind, himself a member of the managerial elite, recognizes the culpability of his own class. The elite’s high ideals combined with their base self-interest have precipitated a widening gap between winners and losers in the developed world.”

    https://www.firstthings.com/article/2020/03/replace-the-elite

  15. Poor Fellow My Country

    Q and A on now CVNTS

    Lead in reminds us, as expected, that we’re all horrible racialists …

    • I saw that and immediately put 5 rounds rapid through the screen where that hateful bastard was standing.

      Made me feel a bit better.

  16. Mining BoganMEMBER

    There ya go…”the rise in anti-Asian attitudes”…opening statement. QandA.

    #notabouthealth

    • So one of those idiots reckons we need Chinese students to fund Uni courses so that Aussie students can attend them otherwise there would be no courses!!! FMD!!

      Funny how I managed to go to uni pre-invasion and there were all these, you know, courses full of Australian students and the unis were much better places, as was the country as a whole.

      Jeez these smug ar$sehats must think we’re really fcuking dim out here if they expect us to believe that sh1te.

  17. Mining BoganMEMBER

    Stan Grant just called China fragile. Chinaman bloke swallows hard. Stan Grant is a dead man.

    Chinaman Wang is a poor liar.

  18. Mining BoganMEMBER

    Chinaman Wang getting angry. Very angry. Doesn’t even sell China as well as Bob Carr and Kevin Rudd. Saying people will be “dealt with”.

    Stan Grant is a dead man.

  19. Watching this stupid QnA accusing me of being a racialist is turning me into a massive racialist.

    Oh and just fcuk Stan Grant.

    • Even StevenMEMBER

      Stan Grant speaks well, until it comes to accusing Australia of being founded on racism. Presume Grant would say the same if Australia had been Dutch, Portuguese, etc. I guess Stan can just blame Western culture.

      But if the Japanese had colonised Australia, I’m sure they would have looked after the indigenous inhabitants really well…

      • When the British signed a trade treaty with China, it also allow for the Chinese to move to any British colony, and many of them came to Australia during the gold rush era. Laws were eventually passed to stop the Chinese influx, and most of them went back to China, nevertheless the anti-Chinese sentiment remains, and the White Australian Policy is born.

  20. Mining BoganMEMBER

    Fake news!

    Hey! He just accused us of over-consuming. I’m starting to like him.

    Oops *drink*

    “Not camps, training centres.”

    Australians are brainwashed! Chinaman Wang has a valid point.

  21. Poor Fellow My Country

    Oh dear – CCP agent dared to accuse ABC of publishing fake news!!!!

    And we over consume too!!!

    On no – the worst person in the room is suddenly not a wh!te male!!! The cognitive dissonance is unbearable!!

  22. Mining BoganMEMBER

    “Sensible voices here are stifled.” Another valid point from the Wangster.

    He’s like Poorleen. Sometimes gets things right for the wrong reasons. Probably a drink in there somewhere.

    *drink*

    Hey, did they look for a musical act that couldn’t be more offensive to the good ol’ Wangsteroonie?

    Stan Grant is still the dead man though. The loud girl second.

      • We should package all shut in tears into a package for investors. Call it a shit in based security and trade it on the ASX. Investors will love the returns. The more outrageous Q&A episodes are the higher the price will go. Investors will keep piling in and then 1 day the whole market will implode.