Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Risk is back on the table with Asian stock markets up across the board as the USD reverses its short term strengthening as we start another trading week and look towards the FOMC meeting. All eyes on Bitcoin which broke down on Friday below the $30K level but has come back in weekend and start of week trade, now back above the $33K level but still below trailing ATR resistance at the $34K level which could prove too high:

The Shanghai Composite has lifted above the 3600 point level again, lifting nearly 0.5% going into the close, while in Hong Kong the Hang Seng Index has surged significantly, lifting more than 2% to reverse the Friday slump and then some, closing well above the 30000 point level. Japanese markets are also lifting higher, but at more modest levels with the Nikkei 225 finishing 0.4% higher to 28739 points while the USDJPY pair has slumped in the afternoon session as the USD goes weak, falling back to the 103.70 level:

The ASX200 was able to hold on above the 6800 point level, lifting nearly 0.4% to finish at 6824 points while the Australian dollar had a strong surge bouncing off the 77 handle and almost getting back to its pre-Friday pullback:

Eurostoxx and S&P futures are lifting sharply going into the start of the trading week, with the four hourly chart of the S&P500 showing a surge back to last week’s intraweek high at the 3850 point level to get back on track:

The economic calendar starts the week with the German IFO survey, then a few ECB speeches overnight.

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Comments

  1. United States … covid accelerated changes … offices … hotels … cruise ships …

    One City Has An Office Market That Is Even More Dire Than New York’s … Bloomberg / Zerohedge

    https://www.zerohedge.com/markets/one-city-has-office-market-even-more-dire-new-yorks

    American Hotels Experienced Worst Year Ever … STR Inc / Zerohedge

    https://www.zerohedge.com/political/american-hotels-experienced-worst-year-ever-zero-profit

    Which Cruise Ships Will Be Scrapped Or Taken Out of Service Because of the COVID-19 Pandemic? … Cruise Critic

    https://www.cruisecritic.com/news/5423/?et_cid=3392960&et_rid=254964275&et_referrer=newsletterPopup

  2. Oh cryptokiddies ……

    This is the story of a Bitcoin trade — the most financially impactful trade I’ve ever made in my life. It’s also the story of the deep-yet-frantic investigation of the crypto ecosystem that led me to make that trade. And it’s the story of what’s really going on in crypto — and what we should do about it.

    If you own meaningful amounts of cryptocurrency or you’re considering buying some, you’re the reason I wrote this. Please do read to the end. – snip

    The pattern was obvious. Practically all the crypto sold on these three exchanges was being bought with Tethers. None at all was being bought with USD. – snip

    https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3

    • Question is whether Tether is printing tokens without any USD backing to manipulate Bitcoin so they can scalp profits by pumping and dumping market- no independent audit so could well be going on.

      • Think the New York OAG’s ongoing investigation of Tether Ltd. and its sandbagging whilst ….

        The first red arrow on the chart points to April 25th, 2019: the announcement of the OAG’s investigation. Notice how, as the investigation progresses, the issuance rate of Tether begins to rise — initially in large single blocks, of around $1B, every few months.

        The second arrow on the chart is July 9th, 2020: the date of the New York court ruling forcing Tether Ltd. to begin the process of disclosing its documents to the OAG. Two weeks after that ruling, Tether Ltd. issues one more large block of Tethers, nominally worth about $800M. And shortly after that — on September 1st — the issuance pattern for Tethers changes completely.

        Beginning in September, Tether Ltd. begins to issue multiple large blocks of Tethers per day. The pace accelerates, with $2.3 billion worth of Tether issued in the first week of 2021 alone.

        This was consistent with the possibility that, as Tether Ltd.’s various legal challenges failed one after another in the New York courts, Tether Ltd. was choosing to issue Tethers faster and faster to maximize the amount of value it could extract from the crypto ecosystem before being shut down. The pace accelerates closer to Tether Ltd.’s final disclosure deadline — January 15th, 2021. – snip

        Speaks volumes[tm] … yet the important question is this activity able to handle its own GFC/Minsky like moment and how would that play out today all things considered E.g. covid, political hotub, et al ….

      • Trying to get my head around this virtual currency fractional reserve thingy (skip). If Tether just “print” unbacked Tethers and buy BTC then why would they need to sell them? Why not just keep the BTC in an untouchable wallet?

        Also who loses out if the regulators can prove Tether has no backing? All the fake Tethers have already been exchanged and settled in bank accounts. All the cryptos are off in the ether.

        • Stewie GriffinMEMBER

          If Tether just “print” unbacked Tethers and buy BTC then why would they need to sell them? Why not just keep the BTC in an untouchable wallet?

          Because BTC is a Ponzi with no intrinsic value, and the only game in town is swapping your worthless BTC for hard currency – Tether is the conduit that makes it all possible.

          USDT provides over 80% of all BTC liquidity, if it is fake then there can be no true price discovery, which is exactly the same issue afflicting real markets with all the Feb USD printing, however unlike the Fed the guys running Tether are totally in it for themselves – when you control the money supply you can manipulate prices both up AND down:

          https://twitter.com/StewyGripes/status/1353446638140887042

          • Groan the fed buys prime or provides liquidity and investors buy stuff …decades of incentivizing shorting labour through market propaganda and giving the wealthy freebies is an own goal …

          • “which is exactly the same issue afflicting real markets with all the Feb USD printing, however unlike the Fed the guys running Tether are totally in it for themselves”

            Not the same issue. USD issuance is just meeting excess money demand.

          • Stewie GriffinMEMBER

            Printer goes Brrrrrrrr asset prices go bing!

            Feel free to argue the finer points with Skip, I’m not interested in an in depth discussion on a throw away line for a perfectly acceptable analogy to describe Tether.

            👍

          • Its a flawed analogy.
            The extremely conservative inflation hawks on the Fed reluctantly create an asset that the whole world wants which now has an infinite demand because the return on bonds is nil or negative.

            A bunch of cowboy scammers create an asset nobody wants whose demand can’t be measured because their is no genuine bond denominated in that “currency” (intangible asset)

          • This might assist stew …

            FT article on the rebalancing of the US economy, Robert Hockett posted an article last week regarding directing the Comptroller of the Currency (OCC) to require national banks channel “bank money” – which is the majority of all public money created – into publicly beneficial, productive and reconstructive projects and businesses rather than ****into mergers, acquisitions and speculations in the financial markets****. In my own view this would be good policy, but would need to be implemented gradually given the speculative imbalances that have built up over time, derivatives exposures at systemically important financial institutions, and related fragility of the system.

            https://www.forbes.com/sites/rhockett/2021/01/19/what-is-the-comptroller-of-the-currency–and-why-does-it-matter/?sh=4cb552c8717a

            Milton’s shareholder value lie paved the way for so much social destruction and it was not even a legal reality, but hay, remember when everyone and their dog could make a few trades a day on their home comp and it was like Amway on roids [were successful entrepreneurs and kids were going to disney world] … Greenspan “The Maestro” the tide that lifts all boats … the water is fine kiddies jump into the dark pools …

          • Mike Herman TroutMEMBER

            You’ve been telling us about this. Even more interesting times for crypto coming up…

      • Missed stews, was it the same link to Barry, but would add one of the defining characteristics of what what went splat before and during the GFC was unwarranted complexity …. as mig found out …

      • Not a proponent of the activity stew, as you should know, so I knew of it on Thurs last week, but can’t post on weekend so this was my first chance. Not that it came out only on the 15th or anything.

        Its all vaporware and not attached to socially productive anything and yet you still bang on about Culture[????].

      • Stewie GriffinMEMBER

        FWIW the insight is that you don’t pick a fight with Jack Dorsey and Silicon Valley unless you know you have already settled the legal case that the bulk of your assets are tied up or connected to.

        • How can you fight when your representative agency dept has been defunded and administrated by industry “experts” …

          • Stewie GriffinMEMBER

            I was referring to the Wright vs Kleinman legal case most likely being settled freeing Wright up to started moving the BTC within the Tulip Trusts – which in terms of value notionally make him the 4th or 5th richest man in the world. He is meant to have around 1.1m BTC in that trust and rumored to have upto 4m BTC altogether.

            If your comment was in reference to anything else then I’m not interested.

  3. TailorTrashMEMBER

    Today I used the self checkout in woolies for the first time in a long time ( I try however forlornly to keep those last few humans in a job they can do for as long as possible )

    Bought some cherries .

    Plonked them on the weighing device and up pops cherries and the price . No selecting “fruit and veg “ and no drop down menus to choose what I had on the scales .
    The machine knew what I had and charged accordingly .

    I guess if these machines can do facial recognition
    It’s not hard for them to discern between a cherry and a banana ……

    Suspect the sales of carrots have tanked as well

      • TailorTrashMEMBER

        Yeh they were in a bag …so I guess the barcode
        did it ……but the tech must be on the way ….
        …probably will pick up your face as you try to cheat …..
        ……don’t much like this brave new world ……

    • I noticed the same thing starting late last year. Now I presume my checkout robot will recognise my peaches, tomatoes etc while simultaneously reporting all my actions to Google.

    • In this instance it was almost certainly the barcode on the box that was scanned, but I’m sure cameras and AI will be able to “magically” identify what you’re putting on the scale within a few years (on-site, almost certainly already possible in the development labs).

      Eg: this thing can identify and sort thousands of unique lego pieces, and it was built by Just Some Random Nerd.

      https://www.youtube.com/watch?v=04JkdHEX3Yk

    • run to the hillsMEMBER

      Same thing happened to me today at Woolies, plonked down a banana and it automatically priced it with no selection made from the screen, I thought I had imagined it but obviously not.

  4. Not sure if anyone remembers I used to rave about the pub food at Kangaroo Valley so here is an update. Yesterday did not feel staying too long at the beach we decided to go for drive and went to KG to have light dinner and drinks before heading home. As we entered the pub first thing I noticed how empty it was. To be fair on the pub we never had dinner there before but only had lunch.
    It was just before 5pm and as we walked in and I was waiting to be served to order drinks I caught the last bits of a customer complaining before leaving by saying “this is not a first time this to happen to us here”. In my 5 seconds assessment the bloke looked normal and a face expression regretting giving these people second or perhaps third chance.
    Anyway, I got my beer and glass of wine for the missus and grabbed a table while the missus was ordering food. She brought this buzzer which was to tells when food is ready so we can pick it up from the kitchen counter.
    30min past and no buzz and then a young girls turns up to confirm what we ordered and to let us know our food was ready but they messed up our number. No big deal I said and went and picked up our plates.
    As I sat down and was just about to take a bait from my burger I noticed my rissole was razor thin and it looked very dry. When I flipped it over it was all burnt so I went and retuned the burger. They apologised and made me new one which tasted horrible and they now seem to use same or similar bread as McDonald’s.
    Missus was also unhappy with her salt and pepper squid (they changed the name to that dish to calamari) and the difference was they don’t put any pepper on it while they now use 2 weeks old lettuce as side dish salad.
    Overall very poor experience and won’t be stepping in there for long time now.
    BTW – the café/restaurant/pub thing on Buli beach has 10 times better burgers and there are couple of small places in Thirroul that serve really good food. One of them don’t sell alcohol which is pity as that place have really mad chicken and beef burgers.
    Oh.. almost forgot. As we were eating the rubbish at the pub we saw same girl that told us our food is ready asking people around us if they ordered whatever. Seems they messed up other orders too. Pub only about a third full from what we are used to seeing there. Was told there is new management in place.

    • Arthur Schopenhauer

      Had a similar experience at the Gippsland Lakes. First dish came out, and the mine was forgotten. It didn’t arrive until after the kitchen closed. They gave me a full refund on the meal.

      The pub had been previous staffed and run by “backpackers”. The owner didn’t know how to run a pub, and all the staff are now local. This de-skilling has happened across all industries, but it’s really obvious in hospitality.

      The good part is, local kids are getting jobs. The bad part is, they don’t know what they are doing. 😀

      • My interpretation is: previous management asked for rent to be reduced but the owner of the Pub did not want to give it away so thought he/she can get new people to take over management.
        New management thought they will get crappier people in the kitchen because who doesn’t know how to make burgers and after all burger is a burger.

  5. reusachtigeMEMBER

    Me and my wealthy mates (literally and figuratively) have stopped wearing those gawd awful masks in shopping centres etc. We can afford to pay the fine so we ain’t playing along with that rubbish!

    • Mining BoganMEMBER

      This is old news. There were many rumours of Gorgeous George being seen around town when he should have been in quarantine.

      One of the chief suspects in the patient zero mystery on the Northern Beaches.

    • happy valleyMEMBER

      Diplomatic passport holders are exempt? Our Tones, as a former PM, is also apparently entitled to a diplomatic passport.

  6. Arthur Schopenhauer

    Headline from The Age:
    “Water users ignoring safety signs amid record death toll”

    ‘Beach goers’ would have been better English.

    Thumping southern ocean swell last week.

    • The Traveling Wilbur

      This is NOT your imagination. This is now a thing. No sarc. Totally serious.

      First noticed it two weeks ago on THE ABC NEWS CHANNEL. A senior roving reporter was filling copy on a piece with pictures – she was doing a voice over and it got my attention even though I wasn’t really paying attention as the piece was of no interest; she didn’t sound like herself. The sentence that got my attention without me even listening properly was all jumbled up. I couldn’t figure out what she was going to say until she’d finished and I’d rejigged it in my head to determine what had been meant. Then there was another one. And another. Then I realised every single one had been an idiom – a mangled one. For example things like ‘a storm that has transpired with cucumber sandwiches’. I thought she was on crack. Then remembered who she was – and how professional she is and realised she’d been told to read somebody else’s copy. And was reading it verbatim. It kept going, it was tediously overlong for the subject material. Every single sentence I heard after that was ALSO based on a separate idiom, one for one, with the writer continuing to try and pretentiously derive the meaning of the idiom without using it, or any logically simple to understand replacement words – one actual instance was a clear refusal to use the word attraction in a sentence that was based on an idiom involving magnetism. Resulting in a sentence three times longer than necessary.

      Got the gist? Or should I say: have you received the meaning? If not, doing the needful will get you there.

      All of it went through an editor, and then someone had to find a reporter with cred to voice it. It was like trying to untangle a cryptic crossword at the end of every sentence. How anyone who didn’t pick up on the effort that was required to interpret the piece would know what the story was is beyond me. It was a tiny bit like listening to a Bob Katter policy announcement. But longer. The most annoying thing was that the meaning of each mangled idiom was clearly understood by the writer correctly – but rather than write *clearly* in the usually understood manner they chose to add confusion and ambiguity into their piece for the purpose, I assume, of appearing more literallarily competent than their coworkers who DON’T think it’s rude to actual make succinct points in a constructive manner. That, would be a cultural thing.

      Yet another reason why SBS news is superior. Actual journalistic standards for clarity and CONSISTENCY of communication.

      • Because ministry of silly walks is soooooo 1970… welcome to the 21st century: this is your ministry of funny talks, gibberish and glossolalia.

        • The Traveling Wilbur

          I will be going down and funding some interest to this subject at my nearly located ABC place of attendance if this non sanity holds fast.

  7. reusachtigeMEMBER

    I had a sweet dream the other night that the rest of the world was extremely sick from the China virus except Australia. We had a military execution force that erased anyone trying to sneak into the country. It was a conscription force and we wasted so many sick scumbags trying to get passed our borders. It was ace! Draft dodgers were publicly executed. That was ace too! We were strong in that dream, unlike now. This is our beautiful and hopeful future.

    • What happened you woke up and realised that all those people they didn’t let in would have bought RE and pushed the prices up?

      Oh …

      • The Traveling Wilbur

        Rich people don’t get COVID.

        Obviously. Or the government wouldn’t let them fly in at will and wander around in public whilst ‘quarantining at home’.

        Reusa was dreaming about renters.

  8. Australian housing trends … detached housing production lift further accelerated by remote working … anywhere …

    … encouraging housing deprived Kiwis to resume ‘flight to (relative … particularly regional) affordability’ across the Tasman …

    Australian housing market to experience ‘up crash’ on back of homebuilder mini-boom – investment bank … Ben Butler … The Guardian

    https://www.theguardian.com/australia-news/2021/jan/21/australian-housing-market-to-experience-up-crash-on-back-of-homebuilder-mini-boom-investment-bank

    UBS’s George Tharenou says homebuilder and responsible lending changes could prompt a spike in construction that will rapidly fall away …

    … George Tharenou, the chief economist at UBS in Australia, said due to the homebuilder spending spree he had increased his estimate of the number of houses that would be built in 2021 from 185,000 to 230,000 – well above the 175,000 level predicted by other economists. … read more via hyperlink above …
    .
    .
    Australian house prices could drop in early 2021 despite 3% rise over past year, analysts say … AAP / The Guardian

    https://www.theguardian.com/australia-news/2021/jan/04/australian-house-prices-could-drop-in-early-2021-despite-3-rise-over-past-year-analysts-say
    .
    .
    … Note extraordinary ramping up of detached new housing approvals … made possible as Australia still has a production residential construction sector, while New Zealand destroyed its production system decades ago …

    November 2020 – Building Approvals … Australian Bureau of Statistics

    https://www.abs.gov.au/statistics/industry/building-and-construction/building-approvals-australia/latest-release

    … It is regrettable New Zealand was too slow sorting out land supply and infrastructure debt financing out of the 2017 election … access recently updated archival website http://www.performanceurbanplanning.org/ for extensive background information.