Macro Afternoon

See the latest Australian dollar analysis here:

Macro Morning

It’s a sea of red across Asian share markets as risk correlations dive deep into the negative zone started by the tech selloff on Wall Street and continuing as concerns over the rapid spread of COVID mount. The USD is weakening against Yen again, but also Chinese Yuan as Euro and Pound Sterling remain relatively stable. Bitcoin is trying valiantly to get out of its corrective dip with a tiny $2K slide today that didn’t result in a new daily low, but it really needs to punch through the $57K resistance level very soon:

The Shanghai Composite is the only bourse moving higher, currently up 0.2% at 3476 points while the Hang Seng Index is off a very solid 1.8% as it plays catchup to the wider risk off mood, closing at 28623 points. Japanese markets have suffered another blow with the Nikkei 225 falling another 2% to close at 28505 points while the USDJPY pair just cannot recover its recent losses as it marks out a new weekly low:

The ASX200 didn’t really suffer as much relatively speaking, down only 0.3% to finish at 6997 points as traders remain hopeful that the 7000 point barrier can hold, while the Australian dollar makes further losses, heading towards but not yet below the 77 handle as this big reversal continues:

Eurostoxx and S&P futures are falling ever so slightly, with the four hourly chart of the S&P500 showing price wanting to find some sort of bottom around the 4100 point level after crashing through previous trailing ATR support at 4130 points and cleaving that beautiful stairway to heaven in half:

The economic calendar picks up pace tonight with UK inflation and the latest oil crude data from the EIA.

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Comments

  1. Apartments down under (Australia and New Zealand) going under … with a vengeance …

    Investors offload empty Melbourne CBD apartments for losses of up to 40 per cent … Rachel Wells … Domain

    https://www.domain.com.au/news/wont-be-able-to-give-them-away-investors-offload-empty-inner-city-apartments-for-losses-of-up-to-40-per-cent-1046214/

    Melbourne apartment owners have offloaded inner-city units at losses of up to 40 per cent in recent months, as some apartments continue to sit empty, a year after Melbourne first went into lockdown to slow the spread of coronavirus….

    … John Sdregas from JMRE Real Estate in North Melbourne recently sold a one-bedroom apartment in Swanston Street for $180,000 – 30 per cent less than the owners paid for it 15 years earlier. …

    … In November last year, a studio apartment in Carlton sold for $141,000, 38 per cent less than the $227,500 it was purchased for in 2007.

    In January, a studio apartment in a high-rise building in Collins Street sold for $145,000 – 36 per cent less than the $228,000 the owners paid for it in 2004.

    And there are dozens more examples. The agent who sold the Collins Street apartment, Annamaria Stella from Twigg Real Estate, says “99 per cent” of the apartments she currently sells in the CBD sell at a loss. … read more via hyperlink above …

    Unit prices fall in many city suburbs amid house-led real estate boom … David Chau … Australian Broadcasting Corporation

    https://www.abc.net.au/news/2021-04-21/unloved-apartments-amid-real-estate-boom/100082276

    … being aware too … of New Zealand’s long and sorry history of dense urban development failures … with this being simply the latest …

    A living hell: Apartment disasters (trailer and full doco) … Prime TV New Zealand

    https://www.primetv.co.nz/a-living-hell-apartment-disasters

    … Access earlier MB post …

    https://www.macrobusiness.com.au/2021/04/links-21-april-2021/#comment-4107228

  2. Bncich may be the new Nostradamus. Inside word is that car manufacturers will be unable to supply product for multiple months. Hate to think what this will do to financiers cash flow.

    • MountainGuinMEMBER

      Any word on if the shortages affect some manufacturing nations more than others?
      May be tough if someone lost thier car in the floods and they need to wait for insurance payouts. After the big hail hit on Canberra last January, prices jumped and stock was really hard and slow to come by.

      • I got an investment email on chipmageddon yesterday from Riskhedge (I think). Apparently a new car uses 300 chips, even if most of them are the cheap $1 chips it’s still a lot of chips when there’s a global shortage.

          • Mining BoganMEMBER

            186s was a bit more revvy. It was the base model for the early monaro models so has a bit of mystique. Also a very solid little motor.

          • Arthur Schopenhauer

            It’s more about forward ordering, financing and Covid. When the Car manufactures cancelled forward orders last March, other manufacturers took the production slots.

            Market efficiency, and all that. (Chortle 😉)

          • Serves you right for buying bogan rubbish Ermo. Never been able to break my old L-series Datsun’s despite driving the snot out of them rice burners muhahaaha.

        • Arthur Schopenhauer

          Hmmm, imagine if there was a company that specialized in vertically integrating what most of its competitors outsource to hundreds of companies…

          Imagine if an electric vehicle is really just a a giant laptop that moves, and all those chips were consolidated onto a few SOCs.

          How far behind would traditional car manufacturers be?

          (Not talking about Tesla.)

          • Arthur Schopenhauer

            Really stoopid?
            https://ree.auto

            VW does not have a single senior executive from their Software team. That’s pretty stoopid when they are pivoting to electric.

          • Imagine if an electric vehicle is really just a a giant laptop that moves […]

            But it’s… not…

            I mean, there are certainly people who consider cars to be fungible, commodity items, but I’m sceptical they’re a large fraction of customers. Even people who are relatively disinterested in how well it drives or specific functional capabilities (eg: offroading), tend to have opinions on style, size, interior fit & features, comfort, etc.

          • Arthur Schopenhauer

            See link above Smithy. Take the combustion engine away, and ‘cars’ become a very different thing. Like a smartphone is to a desktop.

            (It so is too!)

          • Take the combustion engine away, and ‘cars’ become a very different thing.

            No they don’t.

            If what you were saying were true, then people would historically have been making car buying decisions based almost entirely on vendor-specific drivetrain features, and they just… don’t.

          • Interesting but the Reecorner tech increases sprung weight, a no no in mech engineering.

      • Indian parts suppliers perhaps. Used car heaven. Insurance companies pay whatever is asking if we can supply.

  3. WTF! ?

    https://www.9news.com.au/national/new-zealand-travel-bubble-australia-coronavirus-international-travel-ban/28a7449c-de8c-4313-b9a0-2f8ab7d02bf3

    And do people in this country give a rat’s [email protected] Nope!
    What gives the government of this country the right to ban us from even leaving NZ? Why isn’t anybody in the MMS or even MB criticizing the massive infringement on our civil liberties by not allowing us to leave the goddamn country? There is no justification for stopping grown adults from leaving the country if they so desire. Lithuania had a temporary ban that has now lapsed. That’s it. No, people of Australia…you will stay here and buy houses until we decide to let you go!
    If this isn’t proof that Australia is a giant petri dish and that we are all subject to some massive social engineering experiment, then I don’t know what is.

    Oh, and Jim Steinman- you were a dead set legend! Thanks for the music! RIP brother.

    • The Travelling Albatross

      You haven’t talked about your partys for a while, you hanged the boots?

  4. From this perspective, Veblen’s early translation of the Icelandic epic did foretell the visionary economics that would carry him to fame. In the introduction, added thirty-five years later, he wrote that “the Viking age was an enterprise in piracy and slave-trade” and that the Vikings thus anticipated modern “business enterprise,” which is driven “by its quest for profits” and reliant on “getting something for nothing by force and fraud.” Behind the gently waggish satire of terms like “leisure class” and “conspicuous consumption” lies a proposition that is much sterner, and more scientific. In Veblen’s view, modern capitalism, which congratulates itself on its high level of civilization, is in essence a highly organized system of barbaric plunder.

    https://thebaffler.com/latest/a-theory-of-thorstein-veblen-robbins

    Stoopid covnts

  5. Repo balances are taking off now that the banks are unloading their excess reserves to the money market funds…….they can’t make money on them

    https://twitter.com/Barton_options/status/1384570905150451715

    RRP system now is being groomed for the purpose of the floor for interest rates in an SOFR world……..problem is the ceiling for interest rates will have to be imposed by the Fed as well…..talk here of the Fed creating a liability for just this purpose.

    https://twitter.com/FedGuy12/status/1384171039135920128

    This is thin edge of the wedge that Lacy Hunt warns about because if Fed liabilities ever become legal tender it is all over for our financial system as we know it.

    • For a guy like you …

      The problem with folks like Hunt are statements like this one (also from Hoisington’s latest):

      Government funding is derived from taxing and borrowing from their citizens. This process reduces the resources of the private sector which provides productivity growth expanding the economic ‘pie.’

      That isn’t true. It’s a pernicious canard. An old saw that serves to stymie progress and (conveniently for folks like Hunt) perpetuates myths about government finance that are ultimately conducive to slower growth and lackluster inflation outcomes.

      https://heisenbergreport.com/2021/01/14/lacy-hunt-has-some-old-dogma-hed-like-you-to-consider/comment-page-1/

      • chuckmuscleMEMBER

        Good to read someone taking Lacy Hunt apart. Smug guy been on the right side of a 35yr bull market, skill or luck? Knowing the 30yr bond lost 20% over Feb and Marc, be curious to know how he managed those months

      • pfh007.comMEMBER

        They are not referring to currency.

        But it would be interesting if unsecured lenders to banks decided to call in their loans and withdraw the proceeds in cash.

        The banks could exchange their central bank deposits for cash to honour the loans from their lenders.

        Then there would be a lot of currency out and about.

        A pity those unsecured lenders are prohibited from depositing their fresh and crispy notes somewhere safe like a central bank account.

    • The Travelling Albatross

      no one includes the principle in their calculations…and then they call it cheap

    • Add in council rates, water rates, insurance costs, repairs required etc.. owning ain’t that much better. I hated my old landlord but at least when crap broke it didn’t come out of my pocket. Capital appreciation doesn’t pay off your debt.

      • The Traveling Wilbur

        Soloist: Mr Homeowner.
        Concerto: How hard is being one, in A Flat.
        Accompanying: Gavin, and the world’s smallest violin.

    • The Travelling Albatross

      A cow? Didn’t a minister recently demoted for using that language 😁😉

    • We do deserve to be mocked for our pathetic attempts to build an internet. Yet I disagree with the chap that Australia not using Huawei contributed to this. It was our installation of the OS LNP_2013, with the known bugs Abbott, Turnbull and Morrison, that was our mistake.

    • Oh noes, mr Wang is slapping his willie around… taking the p*ss out of the NBN, talk about fishing with dynamite… in a barrel!

      Not even the worst comedy hack stoops to the level of chucking rocks at the NBN debacle.

      • The Traveling Wilbur

        Yep. And if some looser did it would drag on soooooo slowly we’d all be totally baud by the time the bit eventually finished downloading.

    • reusachtigeMEMBER

      Bit strange but s3x robots have so much potential. Once they are enhanced beyond a human female’s capabilities I’m ditching relations parties for doll parties! The sh1t you could get them to beg you to do to them. Imagination potential. Hopefully not too far away.

    • TailorTrashMEMBER

      The Australian side needs to reflect on the relevant
      requirements of international relations and not look through rose coloured glasses . China will always do what is right and we will determine what is right both for the Chinese side and all other sides .

      His excellency The Wolf Wanker n Chief to Australia