Macro Afternoon

See the latest Australian dollar analysis here:

Australian dollar falls as Americans breath their last

Kayaking in the Cook Islands, 2019: Photo by H. Becker

Stock markets are mixed again throughout Asia going into the final session of the week, with only Chinese markets seeing any upside action as the Bitcoin climbs through $18000 again while gold stabilises just above its recent lows, currently at the $1867USD per ounce level:

The Shanghai Composite is slowly eking out a positive session, up around 0.2% to 3366 points while in Hong Kong the Hang Seng Index is clawing back its recent losses, up 0.4% at 26449 points. Japanese stock markets remain in retracement mode with the Nikkei 225 off 0.7% to 25454 points while the USDJPY pair is slowly going nowhere here, remaining just below the 104 handle but not making new session lows:

The ASX200 is putting in a scratch session after a big week, currently sitting a few points lower at the 6540 level while the Australian dollar is having a very minor bounceback, a few pips shy of the 73 handle against USD:

Eurostoxx and S&P futures are again lacking momentum as seen on the four hourly chart of the S&P500, with price hovering just below last Friday’s low spot at the 3565 point level as the October highs continue to act as strong resistance:

The economic calendar finishes the week with a whimper, namely some tertiary data from Germany and the US.

Have a good weekend and stay safe!

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Comments

    • Let’s see how that will work if they have to cover $20tn of losses. At the end of the day it is faith that keep these fiats floating higher than where they should be. But once you start to keep printing money and people realise you can’t lose, everyone else will leave your table.

      • Jumping jack flash

        Its good that soverigns everywhere outsourced money to the masters of money, the banks, and allowed them full control over creation and allocation.

        Because private institutions like banks are obviously experts at producing and managing their chief product, which is money (actually debt, but hey, whats the difference, right?) and would only ever make sensible decisions for the benefit of all.

    • Lagarde is a lawyer and technically isn’t correct.
      The ECB could reach a point where losses couldn’t be papered over with base money. And then which member state would recapitalize it?

      Where the judgement is:
      ECB negative net worth cannot be clawed back by by printing money (current/future seigniorage):
      without
      1 pushing inflation over 2% inflation target
      2. sterilizing new money through non-money liabilities which impose further losses on the bank leading to a loop.
      3. paying interest on reserves imposing further costs on the bank.

      eg. losses of 20T would lead to insolvency.

      Having said that they desperately need inflation and a lower Euro so I think they should be aiming to lose money. It is very sound policy.

      • Jumping jack flash

        Inflation is hopefully not too far away. First it will be prices and then it will be wages.

        But only if theres enough debt that’s cheap enough so all the spare capacity generated from the incredibly well-timed virus stimulus isnt all absorbed from using it for obtaining this round of debt.

        If the debt flows effortlessly like water, and cascades onto all like a tidal wave, then enough debt will make its way into wage inflation to create the next round of debt.

      • I think it may be time to revisit the accepted need for inflation. Can someone remind me again why we need inflation?
        I remember that they used to say that deflation caused people to hold onto their money in the hope of cheaper prices in the future. IRs are so low that nobody really wants to keep their money in a savings account.
        Are we trying to inflate the debt away? I guess big government deficits and QE are one way to reduce private debt but the RBA and government seem pretty keen on expanding the private debt pile so they are actively opposing debt reduction.
        So what are they trying to achieve exactly by creating “inflation’?
        Personally think they have found a way to shovel money upwards now that wages and real inflatio0n is going nowhere. Look at Scomo pinning public sector wage rises to private sector increases at the same time expanding the money supply a $hitload.

        • Jumping jack flash

          Inflation needs to be above the interest rate in a debt economy for it to work properly.

          We are nowhere close to that when looking at mortgage rates. The system will not be able to work as they expect until we can achieve inflation of at least 5%.

          How else can wages stay ahead of debt and create the additional debt that is required each time to achieve economic growth?
          We were on track in 2006 – 2007 but everyone panicked and pulled the pin. I believe it was because they didnt fully understand how the system they created needed to work.

          • Do you even think about what you say before you say it? Literally you are advocating a new level of quackery, as in: “You have to get poorer to get richer.”

            As in: one day your A$ buys you 1$US and the next it buys you only $US0.70. But the A$ is still too expensive so it must be destroyed so it can only buy $0.60! Sit on the toilet (or in a warm bath) for a few minutes and contemplate the fcking logic.

            The world is doomed.

          • Restated:
            You have to boost your income (by increasing sales of Australian produced goods and services) in Aussie dollars to get richer.

          • Jumping jack flash

            “You have to boost your income (by increasing sales of Australian produced goods and services) in Aussie dollars to get richer.”

            Yes
            Also consider the effect of the insatiable need for constantly growing and enormous piles of debt.

          • “You have to boost your income (by increasing sales of Australian produced goods and services) in Aussie dollars to get richer.”

            Lol. I can boost my income by being paid in Venezuelan Bolivars — quadrillions of them, and parade around the neighbourhood telling everybody how rich I am. Or perhaps not. What the A$ buys on the global stage matters, you klutz. How do you not understand this. Sure, on a domestic basis you might put a gloss on the GDP numbers and boost the earnings of a few exporters, but beyond that you are screwing your citizens. ‘Math’ is not your strong point is it , sweep?

        • In a system that is totally broken and the end game is near, I think the only option for CBs and Gov is to clear bad debt via inflation. What else can they do? There will be losers as all creditors and savers will be hit – I am assuming inflation will be higher then IRs otherwise it will not work. But wages will have to keep up with inflation and I am not sure this will happen. Wages could be the one that will break the camel’s back.

          • “Wages could be the one that will break the camel’s back.”

            100% correct Niko — wages, in a flagging economy will not keep up with real inflation meaning that a very large segment of the population, working or not, will become progressively poorer until …. all hell breaks loose.

  1. NEW ZEALAND … 2020 WORKING FROM HOME … 2021 WORKING FROM ANYWHERE …

    … Watch poorly governed (and therefore unaffordable … they go hand – in – hand) local government areas get deservedly gutted and bankrupted …

    This year was all about working from home, but 2021 will be about working from anywhere – study … Daniel Rutledge … Newshub NZ

    https://www.newshub.co.nz/home/travel/2020/11/this-year-was-all-about-working-from-home-but-2021-will-be-about-working-from-anywhere-study.html

    A new study has found that the majority of New Zealanders are keen on working remotely, while on holiday.

    While 2020 has been all about working from home for many of us amid the COVID-19 pandemic, 2021 might be instead about working from anywhere.

    The YouGov research commissioned by Airbnb surveyed 1000 Kiwis and found 53 percent of full time workers say the change of scenery offered by a work staycation appeals to them.

    Seventy-four percent would be happy to relocate and work remotely, while 81 percent said the ability to work from anywhere will be a huge driver when considering their next job.

    “This research shows that Kiwis believe a change of scenery to work remotely comes with big benefits from improving their work-life balance,” says Susan Wheeldon, Airbnb’s country manager for New Zealand and Australia. … read more via hyperlink above …

          • pro-scienceMEMBER

            If you watch the press conference, Trump’s lawyers provide evidence of industrial-scale fraud by the Democrats. Also see the Gateway Pundit for more details. The fraud was so massive because Biden was so far behind.

          • RobotSenseiMEMBER

            Did you watch Biden win Georgia the second time? Beautiful it was. Brings a tear to my eye.

          • He was only behind because the urban vote took longer to count. It’s over. Trump is simply trying to jack the election. As is everyone who supports him acting this way. Members of my family included. It amazes me that some of these people are talking about “making America great again” while trying to overturn the election that is the will of the people. The c#nt needs to stop trying to subvert litigating his way to a second term that he has lost. If he doesn’t I think that violence should be expected and is completely justifiable. It frightens me that so many if his supporters are willing to throw the country under the bus because they can’t stand losing.

          • pro-scienceMEMBER

            So you are ok with massive voter fraud that stole the election from Trump and the people that voted for him?

          • RobotSenseiMEMBER

            No, what I’m not OK with is a guy who lost the electoral college trying to use the courts and state legislature to mount a coup. And I’m not OK with everyone Republican standing by and letting him do it.

            There’s your scandal. There’s voter fraud the same way there’s Santa Claus. There’s a reason Trump is being summarily laughed out of every court he visits.

          • I suspect that there’s fraud and mistakes in every election, but not on a scale large enough to effect the result. It was substantial in the Electoral College and a huge amount of popular vote.

            You are advocating the subversion of our most sacred right. That in itself sends a chill down my spine. If Trump somehow stole the election supported by people like you spouting this kind of nonsense, I’d be violent. And I wouldn’t be alone.

        • Anyone gullable enough to believe Trump’s accusations around a rigged election is a conspiracy theory nut job who likely also believes Covid is a hoax, the moon landing was faked and probably also believes in Big Foot.

          • RobotSenseiMEMBER

            There is no evidence. Read the court transcripts. Funny how, when threatened with sanctions or disbarment, none of those JD’s say anything near what Mt Trump has been spewing in the atmosphere.

          • On education – I remember in high school a teacher asking the class what major events had shaped the earth’s natural history. There were answers such as continental drift, volcanos, ice age etc. Then someone put up their hand and said when the earth stopped being flat and became round!

        • Mate, why do the courts keep throwing the ‘evidence’ out?

          Are they deep state as well?

          Is it Trump and The Last Real Americans vs the world?

          Or, the US has a solid system that has done it’s job well, and Trump et al are trying commit one of the greatest crimes in American history, possibly the greatest…

          Quality thinking says it’s the latter.

      • As a Christian, I sincerely apologise for some of my brothers and sisters in Christ…some of them are fighting a culture war they don’t need to fight, in ways they shouldn’t be fighting, and have been bewitched by a poisonous wordsmith, who does little more than deliberately intersect with some of their values and tell them what they want to hear…

        I have significant grief over this, and have even been literally brought to tears.

        😥

    • Rorke's DriftMEMBER

      Anyone interested in what is going on should just watch the latest press conference by Rudi and team. I takes an hour and 20 minutes. They laid out their arguments quite clearly and I thought Rudi was excellent. He surprised me actually, I thought he was past it but if you take the time to listen he’s very good.
      If you take the time to listen to the whole video, then look at the media reporting of it, you’ll realise the msmedia just all ran hit jobs on them. It’s a good opportunity for people to see how the media really work. Straight out media lies.

        • Rorke's DriftMEMBER

          You really need to start seeing through the lies you are being told. Just switch off CNN, you’ll find it helps to remove the fog and maybe you can start to view the world in a more realistic way.

      • Yes except their arguments are a confection of conspiracy with a lot of statement and no verifiable evidence.
        Sets my bullshit meter to maximum and keeps it there.
        If you believe any of that well I have a bridge to sell you.
        The real criminality though … Trump clearly attempting to interfere in Michigan’s certification process via Republican committee members … how is he not impeached for that? How can Republican senators permit a President to continue when he is poisoning the very democracy that gives them their status and employment? Biden clearly won, incidentally with the same margin that Trump won in 2016, and replacing Trump with Pence for the next 60 days before Biden inauguration has to be getting attractive.

        • Rorke's DriftMEMBER

          You rage against Trump interfering then suggest a coup to remove Trump early. Think about what you are saying. That’s a dangerous type of thinking which unfortunately affects too many people.
          Further, what redress should a President and a people have when there is massive systematic fraud and cheating to steal an election. Surely they are entitled to question it and try to present their evidence in court and to try and alert the public, notwithstanding the difficulties of collecting evidence in the short time available.

          • Yes but their “evidence?” falls apart on slightest examination. News.com.au went through … the Dominion voting company has never done business in Venezuela and nothing to do with anyone who deals with Soros. There is a competitor voting company that has done those things but (1) apparently not involved in any of the swing states, (2) dumped Venezuela as a customer in 2018. It appears that the 2 companies have been confused in some peoples minds.
            Additionally if any of the vote switching was going on it would have been in Georgia but they hand counted and all they found was human error.
            So the “evidence” is incredibly weak.
            And therefore the incessant appeals even after losing many many court cases are not a cry for justice but instead an attempt to subvert the political process.

  2. Say you spent 150 days in your life bashing Dan and then after 3 weeks and no cases you realized you were really just part of a circular firing squad. What would you do next?

        • Explains nothing.

          M2 is just a broader measure of money supply. In other words, nothing to see here, except that M2 is a better aggregation of commercial and gubmint MS activities.

          • QE only impacts the asset side of a commercial bank balances sheet not the liability side.
            So why has M2 exploded during covid while credit has shrunk?
            Any MMTers, money crankists, 007,anyone?

        • “QE only impacts the asset side of a commercial bank balances sheet not the liability side.
          So why has M2 exploded during covid while credit has shrunk?”

          Lol. You are not qualified to speak on this subject as you have no clue how it all works. It has nothing to do with commercial balance sheets as they have to balance at the end of the day. M2 increases are down to central banks buying assets from, er … commercial banks! Funnily enough, when you print money to buy these assets you, in the process, increase the money supply!

          It’s not rocket science — just ask politely and I’ll explain all 😉

          • Don’t you bore yourself? As in doze off as you type a comment?
            “It has nothing to do with commercial balance sheets as they have to balance at the end of the day”

            That is just…. illuminating.

            So a policy which merely swaps assets on the asset side of the commercial banks balance sheet, but has no direct impact on the liability side (where M2 is predominantly counted) somehow is totally responsible for growth in M2 (which is driven by growth on the liability side)?

            you realize serious economics has an anti-libertarian bias?

        • “So a policy which merely swaps assets on the asset side of the commercial banks balance sheet, but has no direct impact on the liability side (where M2 is predominantly counted) somehow is totally responsible for growth in M2 (which is driven by growth on the liability side)?”

          As I’ve stated a hundred times before — your take on how this all works is erroneous. You swallow BS written by fools who don’t understand how this all works. Free world and all that. Have you ever worked in banking? No you haven’t, so STFU and learn from people who have.

        • You link to Murdock lmmao and to top it off Tucker ….

          Tucker Carlson slammed former President Barack Obama in April 2017 for giving a $400,000 paid Wall Street speech, calling it “indefensible.”

          “What could the former president possibly say a) that we haven’t heard, b) that would be worth $400,000 for an hour?” the Fox News host asked on his show.

          Five months later, Carlson and Obama both spoke at the same conference hosted by the Wall Street giant The Carlyle Group, a private equity colossus.

          According to Bloomberg, Obama “discussed his life and the decisions he made in the White House.” It was one of three finance industry speeches Obama did in the span of weeks.

          Carlson, who has been known to criticize Wall Street on his show, spoke on a panel with other journalists. He has also done speaking gigs with JPMorgan and the investment banking firm Jefferies Group. Carlson bills more than $70,000 per appearance, according to his profile on the Washington Speakers Bureau.

          The revelations about Carlson were included in records obtained by The Daily Poster from state pension systems that invest in private equity firms.

          The documents spotlight how an elite group of Beltway luminaries give secret speeches to investment firms that are eager to win political friends and influence the influencers as those same firms seek to preserve special tax loopholes and prevent more regulation of their increasingly controversial business practices. – snip

          https://www.dailyposter.com/p/tucker-carlson-and-media-elites-cozy

          Tell me again about that rigorous libertarian logic – ????

          • Reports from Harvard was suck up to teachers with a side of ticks all the idpol boxes.

            Per your up tread convo with Dom I just don’t eschew Marginalist views at onset – see Daniel Kahneman. Funny how some – now – criticise the DSGE based on the savings/interest rate connection from an empirical point-of-view but will not criticise the utility maximising agents in the model which are subject to an identical critique.

          • Yep. Obama = Saint

            Tucker = Devil

            Yaaaawwn.

            Try thinking for yourself sometime, skip, you might find it refreshing. You and these ‘woke’ sheep have a piss-poor destiny. If you had a brain you’d line up a plastic surgeon and arrange for a name change, ASAP.

          • Where did you get the notion that I think Obama’s a saint nimrod, not that it matters to Tuckers M.O. and how that reflects on your totalitarian knee jerk.

            Dear dead intellectual capital [libertarians] Obama was in bed with developers before running for any office, remind me again who his pick was for SecCom, AG, and Chicago boy extender …

        • I have watched Tucker Carlson videos more than enough times to know they’re filled with little more than bluster and bvllshit.

          He carries less than zero credibility.

          • Oki doki! If you’ve vetted TC’s content and it’s all BS then that’s the final word 😉

            C’mon though, even you have a sneaky admiration for Tucker — there’s no smoother, more charismatic operator out there. No wonder his show is the most watched in the US. Even liberals love him (secretly).

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