Links 24 March 2020

Global Macro / Markets / Investing:

Americas:

Europe:

Asia:

Trans-Tasman:

Leith van Onselen

Comments

    • billygoatMEMBER

      I’m inclined to think the vir us civil covert crown corona my Sharona is for the big corporations as they fold their work forces into common cold historia.

  1. FED launches QEinfinity.

    Stocks crash.

    “…like the sorcerer, who is no longer able to control the powers of the nether world whom he has called up by his spells.”

    lolz

    • The Traveling Wilbur

      Hey. That $2 trillion juiced markets for at least an hour.

      Bound to get 40 minutes plus out of the next $2 t!

    • It’s like the law of diminishing returns applies to the Fed? Don’t fight the Fed? Or the Fed can’t fight reality?

      • China PlateMEMBER

        and when the curtain is pulled back people are shocked hey
        this ain’t Kansas any more

    • Something about pushing on a string and every form of monetarism is wrong, especially when something that can’t be attacked or managed is threatening the economy E.g. the GFC was a human issue.

    • I was thinking that this morning. No more moving the Stockmarket higher with a single tweet. I note he hasn’t referred to it as “my” stockmarket or economy lately…

    • TheRedEconomistMEMBER

      I can get to the login stage and enter my user name details and it says my username has been sent to my email or phone. But nothing received. Even checked my spam folders as well.

      Same thing yesterday.

    • but our health care system is more efficient

      in Germany – 70% of those ICUs are normally empty – so wasteful, inefficient, must be state owned – yuck

  2. It’s too early for all of this, but my Level 4 mind keeps swirling with:

    The Game of Life has changed – from Monopoly, where one person ended up owning all the properties; the bank has dished out all the cash to keep the game going, and now it’s over, the only player that wants another game is the one that won. The defeated players don’t want to play an endless repeat game, they want a fairer one; fair for all – so it’s going to be, Snakes and Ladders.

    • recession
      this external disturbance will be gone in few months and most of economy will bounce back

      it would have been a depression without coronavirus – if the system collapsed because and under it’s own weight

      this way, corona will be blamed for everything, once gone people will feel safe to continue where they left, … recession is going to be deep but relatively short
      big boys will end up owning more than before the crisis, and will continue business as usual

    • BoomToBustMEMBER

      It was always going to be a depression, we started saying this 6 years ago, people thought we were crazy, now many of our critics dont have much to say and are loosing a lot of money and/or are unemployed or layed off.

      • Rorke's DriftMEMBER

        Btb, a bit too much of “I told you so” in your post. I dont know what you told to who but even if you took out billboard ads advising people on their finances its still an ugly look to boast that we’re always right. Be humble. I heard an interview yesterday with a pregnant girl standing in the centrelink line – whats wrong with our society.

        • BoomToBustMEMBER

          Noted – It was not my intention. Unfortunately the small people are the ones this will hurt the most. The pain this will cause to society is immense.

        • 5-6 years of pent up frustration at being called a “doomsayer” by those who don’t understand risk at all or, worse, profit off those who don’t understand it will cause a schadenfreude orgasm in the best of people. We’re only human.

        • Also you guys didn’t know a virus black swan was coming? You have likely won by default

        • billygoatMEMBER

          Humility over rated. Blind Freddy with half a brain could see fin crisis waiting on sidelines for black swan to arrive at the party. Fancy dress as if turns out .. black swan draped in invisibility cloak borrowed from Harry Potter while everyone points like child in Emperors New Clothes…”Corona Corona Corona” “ covid covid covid” “covid 19 covid 19 covid 19” Blind leading the blind.

        • The same people moaning about circumstances now are the same ones who gaslit all the non participants and would brag about how much their house or IP was worth. Let’s not forget. Being humble is overrated. Many of us endured 20 years of bullish nonsense. At some point all bubbles pop. The black swan was this virus. Nobody likes to see others suffer, but many ignored all warnings.

    • Depression, no doubt about it. The whole world had too much debt in various sectors of their economies, everything stupidly priced for perfection before this happened. The size of the debt combined with other underlying forces (automation etc) meant that when whatever pricked it, it was always going to bad. Now we have the worst possible balloon pricker, a virus that will cause a global shut down of economic activity of varying degrees for varying lengths of time. At the end of it the Boomers that survive will be poor cos they lost all their money in the stock market and property market crash and many were in debt. There will be no comfortable social security around the world because we are in a period of extreme wealth destruction. Only those Boomers who end up still owning their house on the other side of this will have any hope of a life with dignity going forward (and it certainly won’t involve the level of spending and lifestyle they had planned on). Other generations who are in a lot of debt are also going to be in a world of pain and that will change outlooks and values (to what I don’t know). But the trauma of having your certain worldview ripped from you and exposed as a lie, in addition to having someone you know die (just think about this, every single person in Australia will know at least one person who dies, most likely several, and they will have to deal with other people who are grieving) will mean that the collective psyche of Australia and the world will change. There is no going back to BAU, life as usual. The paradigm of our existences (fiat currency, ever more debt) has changed. We don’t yet know what the post virus world will look like but it will be different. So depression for sure, there is no other alternative. None.

  3. That’s better! Coffee is a wonderful liquid…
    “UK transport secretary Grant Shapps effectively nationalised the railways on Monday in response to the coronavirus outbreak.”
    Air New Zealand next? Or perhaps Qantas beats us to it!

    • Janet, was Luxton smart or lucky to jump early from AirNZ? Can he transfer the same luck to his politics?

      Our Alan J at QF should have no troubles when he jumps (is pushed). Like Scrooge McDuck, he has 100 million $1 notes to land in.

      • We’ve had our lucky-businessman-turned-politician in John ( sorry, Sir! John) Key. Luxton is more likely to follow in the footstep of one Malcolm Turnbull, if he gets that far.

    • Arthur Schopenhauer

      Air NZ first. The culture here will screw the labor force into oblivion and then the government will debate selling Qantas (a strategic asset) to some other country’s State Owned Enterprise.

  4. Shane Morris
    @IamShaneMorris
    In tourism-heavy cities (I used Nashville, Honolulu, New Orleans, and Savannah) the rental market is exploding, as AirBnB owners are suddenly forced to put their houses on the market.

    This surge in supply is going to dramatically cut the rates of monthly rentals.

    https://twitter.com/IamShaneMorris/status/1241703904154247168

    My Fav –

    For years, AirBnB lobbyists and “advocates of the free market” have argued that AirBnB has a negligible impact on the prices of rentals, arguing that they were two totally different commodities.

    Now we’re seeing they were totally full of shit. – snip

    File under TINA – there is no society E.g. only Homo economicus Übermensch atomistic individuals in a market matrix distribution device of freedom and liberty …. take a bow Hayek and Friedman Ltd Pty ….

    • somehow house prices fell 20% in 2018 while economy was doing great and unemployment was at decades low
      now with the worst economic predictions in memory and record unemployment in decades they are going to fall only as much
      LOL

  5. Arthur Schopenhauer

    The overriding theme in Australia’s response to Corona is incompetence.Whether its government or corporate, neither have the skills to do basic things like increase the capacity of online services, mass organise action or delivery change quickly.

    Having out-sourced technical services for the past 30 years and filled out the economy with bullshit jobs and promoted the loudest, most venal bllsht artists into leadership positions, we now have no capacity to execute anything more complicated than filling a supermarket with goods.

    With luck, the War like nature of the crisis will promote the most capable into positions of influence and ultimately power. We are all hoping the Health Departments have not suffered the same chronic blowhard-its as the rest of our culture, but the idiocy of the Federal Chief Medical Officer suggests otherwise.

    From what I am seeing at work, many large companies had no plan in place, an were in a blind panic yesterday.

    It’s going to be a long 9 months. Stay healthy everyone.

  6. Arthur Schopenhauer

    The overriding theme in Australia’s response to Corona is incompetence.Whether its government or corporate, neither have the skills to do basic things like increase the capacity of online services, mass organise action or delivery change quickly.

    Having out-sourced technical/skilled services for the past 30 years, filled out the economy with bllsht jobs and promoted the loudest, most venal bllsht artists into leadership positions, we now have no capacity to execute anything more complicated than filling a supermarket. (Even then we struggle.)

    (Functions as basic as call centres do have high amounts of embedded knowledge and skill.)

    With luck, the War like nature of the crisis will promote the most capable into positions of influence and ultimately power. We are all hoping the Health Departments have not suffered the same chronic blowharditis as the rest of our culture, but the idiocy of the Federal Chief Medical Officer suggests otherwise.

    From what I am seeing at work, many large companies had no plan in place, and were in a blind panic yesterday. The current lockdown response has been knowable for 2 months! Companies with many thousands of employees in complete denial.

    It’s going to be a long 9 months. Stay healthy everyone.

    • With luck, the War like nature of the crisis will promote the most capable into positions of influence and ultimately power.

      not even luck can help with that, it never happened anywhere in history of humankind

      • Arthur Schopenhauer

        It happened after World War 2. Our country was built up by the men that returned from fighting in the Pacific. They took a colonial backwater and built it into a first world country. Leaders since Keating have destroyed all of their hard work.

        It has repeatedly happened throughout history. For example, Athen’s golden age came after it’s wars with the Persians.

        • post WWII progress was not a result of “the most capable getting into positions of influence and ultimately power” but rather a “natural” progress following dark and regressive decades prior. Almost all Western countries saw that progress regardless of the leadership they had.

          maybe after Marathon battle because all the people of power and influence died in the battle

    • Arthur, love your sentiments but you need to be fair. Half the population has below ave IQ. Law of probabilities suggest that these dim wits occupy half of managerial/leadership positions. Eg SloMo. So what can you honestly expect?
      To be honest, the media didn’t help in this whole fiasco as there was a lot of commentary that COVID was just a bit worse than the flu. It’s only now that the diabolical nature of this pest is apparent to all. We are cancelling all social engagements in our home and restricting movements to supermarket and chemist.
      Best of luck to all.

      • It isn’t about the IQ spread. It is about the will and the leadership that picks a direction and gets us there as a group. I’m a dull bloke. Yet, I’ve been lucky enough to end up working with sharper ones who have the vision and determination to make things work. I just kick in what I can. That’s how it can be done and that’s how it was done.
        The other thing I’d note is the amount of people who, when given an opportunity to do something, and are supported on the job while doing it, show themselves to capable of doing things that KPIs and IQ tests could never account for is, I believe, likely to be greater than we imagine. The system has failed the people, not the other way around.

        • “I’ve been lucky enough to end up working with sharper ones who have the vision and determination to make things work”.
          Thats right, you still need talented (smart) people who are also motivated to pull us out of this shit.
          The gene pool matters.

  7. NEW ZEALAND … CORONAVIRUS … SHUTTING DOWN THE ECONOMY …

    Rental market ‘flooded’ with former Airbnb properties … Susan Edmunds … Stuff NZ

    https://www.stuff.co.nz/national/health/coronavirus/120510118/rental-market-flooded-with-former-airbnb-properties

    Property investors are pulling properties from Airbnb to offer as long-term rentals instead.

    New Zealand’s tourism industry has come to a standstill as the country responds to the spread of coronavirus. …

    … “There are also large numbers of houses becoming available as people who have lost their jobs have moved out of rentals or have left New Zealand to head back to their home countries. I have seen reports of landlords throwing their hands up in the air and letting people break leases, rather than being stuck with someone who can’t pay rent. In other cases, there is evidence that tenants have done a runner.” … read more via hyperlink above …
    .
    .
    It is a pity border control has been such a bureaucratic shambles (note travel related infections %) … to illustrate …

    Coronavirus: Passengers from virus-hit cruise ship fanned out across Canterbury … Liz McDonald … The Press / Stuff NZ

    https://www.stuff.co.nz/national/health/coronavirus/120490137/coronavirus-passengers-from-virushit-cruise-ship-fanned-out-across-canterbury

    • He’s right. Everybody knows it.

      Hopefully the lack of work and lack of access to social security will persuade a bunch of these ar$ehats to bugger off back to where they came from.

  8. Just home from a quick trip to Manly (NSW) for banking and a cuppa – it’s not quite a ghost town yet but you get the feeling it soon will be. Usual busy beachfront strip deserted and a lot of Corso shops closed even though they are allowed to trade.

    CBA 12 month Term Deposit currently 1.7%, relatively OK.
    Pharmacy Nutrition Balgowlah has 450ml hand sanitiser for $45, relatively not OK.

  9. So virus hit china by surprise so they had to build hospitals within weeks.

    We had almost three months since the outbreak so what is our excuse for not having 10000 ICUs by now?