You’ve got to love the lure of QE. AUD is down this morning:
Bond yields are hammered:
XJO has taken off on the sniff of QE:
Big Iron is up despite clearly rising risk in China:
Big Gas is up despite oil being fooked:
Big Gold is up despite DXY threatening:
Big Banks are flying despite their margins being crushed by the move into ZIRP:
XJO is now trading close to its highest ever valuation at 21x NTM with zero profits growth ahead and recent earnings suggesting -20% on 2019 for the year ahead is about right.
Can the ASX become the new QE bubble like the US or will it be the deflated balloon that is Japan?
I wouldn’t bet on the former!
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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Investing was a much simpler proposition before ginormous QE, interventions and the like….
Sigh.
Burn it to the ground.
If debt amplifies risk – which I generally agree with – then all assets are in for an interesting ride given the historically elevated levels of debt in the system. There will certainly be the opportunity to make levered shed-loads of money … and also to lose levered shed-loads. The investment environment remains rather opaque and disconcerting relative to thirty years ago. There seems to be high risk everywhere.
Yeah…I want in (FOMO) and out at the same time.