Macro Afternoon

See the latest Australian dollar analysis here:

Macro Morning

Another poor effort by Asian stock markets but to be expected as both Wall Street and Europe stumbled overnight in the wake of another “surprising” high inflation print, this time in the UK, with inflation fears lingering throughout the risk complex. The USD is maintaining strength against nearly everything, although Yen is holding on to its overnight gains while the Australian dollar remains below the 73 handle and gold holds fast at the $1860USD per ounce level. Meanwhile Bitcoin is going nowhere, still hovering below the $60K level after its sharp falls at the start of the week taking it back to its previous weekly lows:

Chinese shares are down with the Shanghai Composite finishing 0.4% lower to close at 3520 points while the Hang Seng Index has given up on getting back on track, diving some 1.3% to close at 25305 points. Japanese markets are also losing direction, with the Nikkei 225 closing 0.3% lower at 29598 points in response to the sudden fall in the USDJPY pair as it tries to find support here at the 114 level:

Australian stocks were the only ones in the region to lift higher, but only just with the ASX200 closing up 0.1% at 7379 points as the Australian dollar accelerates its rollover from the failed swing start to the week, heading well below the 73 handle for a new weekly and monthly low:

Eurostoxx and S&P futures are again just holding on to their overnight moves, with a lack of momentum going on as the four hourly chart of the S&P500 shows price unable to climb back above the recent highs at the 4700 point level:

The economic calendar is light on tonight with US weekly initial jobless claims the only event of note.

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Comments

      • Too many construction milestone bonuses to the CEO?

        With that many Subbies not going to get paid, it’s hard to believe that there wasn’t a period where Privium traded while insolvent.

        • RobotSenseiMEMBER

          Actually there was a post on Reddit that delved into it a little deeper:

          “In 2018 – 2019 the industry became very slow and rates become low which caused the building companies to take advantage and capitalise on sales with these low low rates. Fast forward to mid 2020, the government introduces this amazing $25,000 home builders Grant including a 15k first home buyers, the marketing teams of these companies used this to thier advantage and sold houses minuses the grants. (On a $200,000 build works out to be 20 percent deduction). The marketing teams sell ALOT of homes with these prices with legal binding contracts included on these prices.

          Beacuae so many contracts and land is sold construction start is delayed. Meanwhile there are major supply increases, like I have seen 40 percent price increase with steel since 2019. This is across the board on all materials. All this construction has out lined the government haven’t focused on skills and trades enough over the past decade and causes a labour shortage. The trades have capitalise on this work and put the going rates ups. So between when the contracts were signed and the construction start we have seen a 40 percent increase in labour and supplies.

          Example a brick was $1.20 to install in 2019 and its now around $1.90. Scrap steel was around $100 per tonne, its now $300. We still have contacts on these historic pricing.

          Major trade and supplier delays cause cash flow problems for claims and the rest is history.”

        • RobotSenseiMEMBER

          Oh yes and just this minor point:

          “However, during the 2020-21 financial year it paid $22 million in dividends to its shareholders, including $4 million to Privium Group and failed to file a financial report for the 12 months.”

          • Sounds like some of the Directors should end up on gaol. But more likely they’ll end up running for some blue ribbon Liberal seat in the next state election

  1. Hugh PavletichMEMBER

    New Zealand: Relentlessly rising interest rates … starving the irresponsible housing bubble of oxygen …

    … The authorities at central and local level must allow affordable new housing to be built …

    Westpac joins ASB in pushing through higher fixed mortgage rates, as rising inflation expectations push up wholesale rates, and all eyes turn to how the RBNZ will react … David Chaston … Interest Co NZ

    https://www.interest.co.nz/personal-finance/113257/westpac-joins-asb-pushing-through-higher-fixed-mortgage-rates-rising

    Westpac is the next to raise home loan rates, raising most by about +20 bps.

    As a result, it has the highest or equal highest rates for all fixed rates to three years.

    It follows the lead of ASB who raised rates to these new levels on Tuesday.

    For a home owner with a $500,000 mortgage, today’s 2 year rate of 4.35% will require repayments of $2,489 per month. Twenty weeks ago at the beginning of July that rate was 2.53% and required monthly repayments of $1983. That difference is now $506 per month. Even in these inflationary times $500 out of most household budgets is a lot. It is not going to be spent elsewhere in the wider economy. And we can’t really say it is being recycled into savers accounts in higher interest rates. … read more via hyperlink above …

    Benje Patterson says many households will need to tighten their belts due to higher mortgage payments. The burden of this adjustment will be unevenly spread across the economy and fall on sectors which rely on discretionary expenditure … Interest Co NZ

    https://www.interest.co.nz/business/113252/benje-patterson-says-many-households-will-need-tighten-their-belts-due-higher

    NZ home loan rates going to continue to grow – economist … TVOne / TVNZ

    https://www.1news.co.nz/2021/11/02/nz-home-loan-rates-going-to-continue-to-grow-economist/

    Median Multiples NZ Urban Areas … Interest Co NZ

    https://www.interest.co.nz/property/house-price-income-multiples

      • I’m not suggesting anything but only pointing out the data and how that conflicts with others past views. BTW just clicked on the link and scrolled down just a few posts and found it quite easy. You must have a hard time using the internet without the appropriate software to deal with the things, just about all web sites have, especially any with advertising, like this blog per se.

        Mitchell Tsai
        Virus researcher at Harvard Medical School in 1980sUpdated 3h

        Wave #6 in US and countries with high vaccination levels: Little correlation between vaccination levels & Covid levels.

        Vermont (72%, 81.8%) is the US state with the highest vaccination levels, and it is seeing a bad Covid surge.

        Sweden was much worse than Finland, Norway, and Denmark in waves #3 & #4.
        But it’s much better in waves #5 & #6…with lower vaccination rates.

        Why are Spain (high vax rate) & Sweden (low vax rate) doing so well in Europe?
        What are they doing better than other European countries?

        (1) Speculation: Behavior is much stronger at controlling Covid levels than high vaccination levels. Risky behavior can OVERWHELM vaccine protection.

        In Westwood (area in Los Angeles where I live), we had a 17-day Halloween surge (118 cases in 17 days, 6.9 cases/day). 3.5x-9.5x higher than the old level of 2.0 cases/day. Probably due to the massive parties. UCLA students are required to be vaccinated (with some exemptions), so the Halloween surge was probably entirely in vaccinated people. I didn’t see a surge in Los Angeles overall, or the neighboring areas of Santa Monica, Beverly Hills, and Marina del Rey.

        (2) Vaccines are useful as a short-term tool for lowering hospitalization/death in age 65 or 75 people (and at-risk people), but they don’t prevent bad Covid outbreaks.

        (3) Vaccines don’t keep other people safe. Use rapid tests, N95/N99/N100 masks, distancing, and other low-risk behaviors to protect others.

        Skip here – there is the graph below above comment which further fleshes out the data on an international scale. The entire problem seems to be a conflict between the notion that high vaccination rates – as a stand alone public health policy – is a one and done e.g. return to past normalcy. Now if you look directly below this article you will see:

        Swiss Cheese Respiratory Virus Pandemic Defense (This version doesn’t have the last layer of pills added by Rose Wong.)

        “The concept of using multiple layers of defenses to combat the spread of COVID-19 is illustrated in this figure below by virologist Ian Mackay.”

        Which suggests that in a dynamic event a better public health policy would be multilayered to redress – all the issues – related to how the infection is spread. Sadly it seems past decades of ideological preferences [indoctrination], reduction in capacity, and industry driving public policies for self enrichment [lmmao praexology et al] has driven an outcome that is just the opposite of what should have been done. Now all that time and money as been squandered and we can’t go back in time to rectify these mistakes.

        PS. Vaccines only work to minimize symptoms within a period of months and that is all, hence putting all your eggs in one basket when faced with a multi year long event seems dubious at best.

  2. Hugh PavletichMEMBER

    China …

    Evergrande default is highly likely, S&P says … Evelyn Chenge … CNBC

    https://www.cnbc.com/2021/11/18/china-evergrande-default-is-highly-likely-sp-says.html

    KEY POINTS

    • “We still believe an Evergrande default is highly likely,” S&P Global Ratings analysts said in a report Thursday
    .

    • “The firm has lost the capacity to sell new homes, which means its main business model is effectively defunct,” the report said. … read more via hyperlink above …

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