Macro Afternoon

Bit of a nothing session here for stocks in Asia today with only mainland Chinese and their satellite Australian bourses rising while the rest of the region puts in scratch sessions. Tonight’s session will focus on the latest durable goods order print from the US while the next IFO survey could take the wind out of European stocks given the upbeat reaction to the still contracting (but rising) PMI prints of the previous session.

In mainland China, the Shanghai Composite put on nearly 0.4%, closing at 2981 points while the Hang Seng Index retreated a little, down 0.2% to 24685 points, unable to gain further traction out of breakout previously:

Japanese share markets had a lackluster session with low volatility, the Nikkei 225 finishing 0.1% lower to 22534 points while the USDJPY pair equally treaded water for no result, still stuck here below its previous support level around 106.60:

The ASX200 oscillated in two large swings throughout the day before finally settling slightly up at 5965 points, again briefly touching the 6000 level before resistance kicked in. The Aussie dollar found some early momentum but also couldn’t follow through and finished where it started at the 69.40 level before the London open, still in a weak position in the medium term:

Eurostoxx futures are down 0.6% or so while S&P futures are flat lining here as overhead resistance continues to weigh as seen clearly on the S&P500 four hourly chart, which remains poised here with price wanting to breakout:

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        • You might be befuddled but multiculturalism has been around since the advent of the city – nation state going back to humanities earliest days, now if you want to bang on about economic ramifications of any specific area or nation allowing others to live in to work or become nationals that’s another conversation all together.

          • DominicMEMBER

            Yes, skip, but in the days of yore, the migrants weren’t ‘paid’ to come — only those that were willing to give it a crack made the effort, which I applaud. Given that we are a generous welfare state, it’s a no-brainer. There’s a big difference.

            And people who suggest that the ‘freebies’ available here are no inducement whatsoever are criminally dense.

        • ErmingtonPlumbingMEMBER

          Yeah Yeah Yeah,….their LNP masters let them waffle on with all the “Lefty” shyte they like,…just as long as they don’t challenge the economic status quo.
          Set em up and knock em down.
          Just like Margaret Thatcher said make them dysfunctional, then defund them, Then you’ll get little resistance against their privatisation.

          Any reduction in media diversity is to be lamented and opposed.

      • happy valleyMEMBER

        Doesn’t the old saying go: “people who live in glass houses should not throw stones”? Or have I missed something and Foxtel is outperforming financially for the Sun King (and the passenger shareholder, Telstra)? I wonder how much 4 nights a week of AJ on Sky News after Dark costs?

        • The Sun King can fritter his money however he likes. The question is whether in the age of the internet we should be compelled to use taxpayers’ money for the diversity is our strength message (but definitely no cultural appropriation) brought to you by overfed white women of privilege at the ABC.

    • Here is the full “Mises” review.

      I haven’t read it (the review but I have read the book) so we will have to rely on Skippy to provide a comprehensive deep dive (on the review).

      https://mises.org/wire/review-stephanie-keltons-deficit-myth

      “…Conclusion
      Stephanie Kelton’s new book The Deficit Myth does a very good job explaining MMT to new readers. I must admit that I was pleasantly surprised at how many different topics Kelton could discuss from a new view, in a manner that was simultaneously absurd and yet apparently compelling.

      The problem is that Kelton’s fun book is utterly wrong. The boring suits with their standard accounting are correct: it actually costs something when the government spends money. The fact that since 1971 we have had an unfettered printing press doesn’t give us more options, it merely gives the Fed greater license to cause boom/bust cycles and redistribute wealth to politically connected insiders…”

      • Lmmao … how Austrian of you …

        I mean how good is it for you to proclaim your mantel of thought without all the BS rhetoric and sales PR-ship … your owning it and all the baggage that comes with it.

        • LOL

          Nothing like a triggered marsupial !

          I haven’t read the review and haven’t kept up with the Mises stripe ….unlike you.

          Kinda a funny that you are clutching your pearls, when you were the one directing us to a MMT chieftain claiming the support of the Mises mob to promote a MMT holy work.

          Soooooo funnny.

          • Sorry wing nut … web of debt noob …

            Its indicative of the rational of your stripe to blame all outcomes on monetarist groundings and ignore the totality of what humanity is and always has been contra to the machinations of those that would impose themselves on it for control.

          • “.. ignore the totality of what humanity is and always has been ..”

            Forever and ever amen.

            LOL

            And you are the experts on that?

            Don’t tell me…….. It is just an operational description.

            Snort, chortle, head thunk.

      • The punch line is Austrians were funded by plutocrats of the day to advance their concept of society and are quite anti democratic in social outcomes … hence in the past they were called boot lickers …

        • Well I suppose plutocrats was the best they could do.

          They must not have had access to a wealthy former banking/finance guy lurking in tax havens outside of the US of A.

          You know, the kind that cook up things like MMT.

          https://en.wikipedia.org/wiki/Warren_Mosler

          “..Excited to share his various economic theories, Warren met economist Arthur Laffer through a tip from Donald Rumsfeld. Arthur suggested Warren to seek out postkeynesian economists L. Randall Wray, Bill Mitchell, and Stephanie Kelton to discuss his ideas. These post-Keynesian economists taught Mosler about chartalism, and in turn Mosler convinced the economists that taxation and borrowing does not finance US federal government spending.[2] Laffer also introduced Warren to his future collaborator economist Mark McNary. Warren drew on McNary’s research on taxes among other research to underpin his self-published monograph, “Soft-Currency Economics”.[4]..”

          • MMT is just a accounting function, no different to the gold standard, its administration is political, hence blaming the thing for representing the human agency is a categorical error.

            Not unlike having a high GPD metric but suffering a dysfunctional society due to distribution metrics and how that is relevant in accessing basic goods and services.

            Move to the U.S. and live the dream.

          • Skippy turns the deflector array to 11

            Priceless

            Mosler is introduced to Laffer by Rumsfield and from those humble beginnings MMT is hatched.

            Too funny.

          • Wing nut that is so conjectural without a means to evaluate its desperate.

            Laffer is your mob,

          • Jumping jack flash

            “MMT is just a accounting function…”
            Correct sir.
            As far as i understand it people like giving fancy names to remarkably simple things. It keeps the unwashed from understanding and allows them to be fooled.

            There is only money and debt, and debt not only requires repayment, the interest must be repaid in full as well. And whatever they think of and assign clever names to can only ever effect any one, or any other, or any combination of the three.

  1. The fed broke it. Now, they own it.MEMBER

    Gold!!!! There is no turning back. Governments will print and print and print. Only question is unhedged Gold PMGOLD.AX & GOLD.AX or hedged Gold QAU.AX?

        • Gold is a commodity and nothing more, relevance of its worth is more grounded in antiquarianism than its actual relevance in a token of exchange.

          • Ah the informative response from the intellectual well spring that is AET … a gift that keeps on giving …

            So what again is your camps environmental agenda … all thing considered … or do all just get a free [tm] ticket to the masters house.

          • DominicMEMBER

            You know my stance on this: gold is money. Nothing else.

            Your uneducated stance on gold annoys me – I admit – but then, does it really matter to me in the long run? Nup.

            All cool.

          • Sorry but your belief is not compelling considering history and anthro, gold was in the past weighted against grains of wheat E.g. the value of the metal was just a representation of commodities that enabled life and with it trade under the auspices of governance I.e in a life and death situation gold is meaningless.

            Ability to start a fire has more worth and value.

            Worshipers of anything are a strange lot ….

        • My opinion is that Straya is doing better than most on Covid-19 and at this stage in a better position then the US which has given currency strength.

          It depends how much you want to transfer, what for and how quickly? I still think today’s rate is better than last couple of years so not a great loss to transfer now

          Do I think AUD will crash vs USD? I’m afraid I don’t. I think if USD crashes so does AUD and all currency, so unless you’re planning to buy gold or BTC I don’t think you should hold fiat for long in this Environment.

          Assets are being snapped up from what I can determine and for likely a good reason. To preserve purchasing power of wealth.

          My 2 cents.

          • DominicMEMBER

            Yep. There are credible calls for parity within, you guessed it, 18 months! 😉

            But seriously, I wouldn’t be surprised. I think commodities are going to catch a serious bid at some point next year.

          • That’s a fair point Gav. Though I tend to think it’s the risk on mentality, iron ore price and the optimistic RBA than the virus situation. If the risk on turns to risk off I’m pretty confident the currency will crash again quickly in spite of our good Covid situation.

    • Depends on how long you can wait really? AUD is correlated with the S&P 500. Where that goes the dollar will most likely too. Unless the ASX200 breaks 6200, S&P breaks 3250, can’t imagine the AUD will hold above 70. So could go lower from here. How fast and how it does it is hard to say, anyone’s guess really.

      • Please the AUD was supposed to be burnt toast years ago, so anyone banging on about hard money optics should put the gun against their head and go click click in front of all the other betters looking on …

        • I suppose 1.10 to 55c is just brown toast, 80c in 2018. We’re still downtrend on the yearly chart from then. Unless we break 72c which it prob won’t as everything looks likes it’s rolling over.

          • Compared too what as a allocation vector in a dynamic market that is detached from historical norms.

          • The Traveling Wilbur

            AMP
            Australia’s leading magazine publishing house
            The Sydney Football Stadium.

            Too soon on that last one?

            And oil btw.
            And CNG spot price, I think.

          • On what time line and and to what broader economic ramifications for – all – concerned.

          • Lol, but thats the very point of my question. It’s a huge decline. And it’s still in decline.

          • Its all a time and space with perspective problem … life did not end in the late 90s when the AUD went below 50 … something about watching a pot boil.

  2. We built this city, we built this on Chinese dough
    Built this city, we built this city on Chinese dough

    Say your a student, with a yellow face
    Say you get offended, by Drew Pavlous place
    Knee deep in a mortgage, sinking in your debt
    We got too many immigrants eating up the place

    Danny signed the belt deal, got advice from John So, don’t you remember
    We built this city, we built this city on Chinese dough
    We built this city, we built this city on Chinese dough
    Built this city, we built this city on Chinese dough

    Someone’s always paying corrupt pollies cash
    Who cares they’re always changing LNP leader names
    We just want to live here, someone stole the stage
    They call us racist for speaking out, silence us off the page

  3. So all the money flowing again betting against Trump.. is it TDS? Emotional? Are people still that out of touch with reality? Maybe it’s the MSM doing a good job of brainwashing..

  4. Until we just face the virus head on and go for Sweden-style herd immunity, this will be the reality for Australia – endless lockdowns of various businesses, constantly sapping away at economic and social energy:

    https://edition.cnn.com/2020/06/23/europe/germany-coronavirus-guetersloh-lockdown-meat-factory-intl-grm/index.html

    The ONLY WAY OUT is herd immunity, Sweden/USA/UK style! Just isolate the elderly, give them free daily meal deliveries, and let the rest of society do whatever they want without restrictions or border closures.

    USA has NO EXCESS DEATHS ANYMORE from COVID: https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm

    We did our part and flattened the curve, now we have PPE, hospital capacity, and knowledge on how to deal with the worst cases. Even in Sweden months ago the outbreak never broke their existing healthcare capacity. Why are we going for a needlessly destructive and impossible suppression strategy?

    When the virus does hit us, as it inevitably will, we will have just wasted a huge amount of time and money, and be in poorer health due to economic stress and no vitamin D.

  5. migtronixMEMBER

    Am I the only person walking around Melbourne CBD looking at people weird hoping they start some sh#t?
    . Because I’m willing to go down for the count over pretty much nothing. I’ll get some kicks in. It’ll be worth it.

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