Macro Afternoon

See the latest Australian dollar analysis here:

Macro Morning

Still not a good day for risk takers out in the Asian stock markets although a late bounce this afternoon has seen equity futures for Europe and Wall Street lift, dragging up some local bourses as well. Currency markets remain in line with a strong USD, with the Australian dollar almost crossing below the 69 handle while oil markets have pulled back again as Brent crude goes below the $104 level. In undollar land, gold is trying to comeback but remains under stress, currently at $1862USD per ounce while Bitcoin is crushing hit, heading below the $30K level and on track for a new yearly low with the weekly chart showing the next stage of an epic head and shoulders pattern almost complete:

Mainland Chinese share markets were able to recover their early losses with the Shanghai Composite currently up 0.7% at 3025 points while the Hang Seng Index returned from its holiday to a large selloff, down more than 2% to 19549 points. Japanese stock markets are still under threat with the Nikkei closing 0.4% lower at 26213 points while the USDJPY pair has pulled back half of its overnight losses to still anchor above the 130 level:

Australian stocks started off in a shocking state but were able to clawback throughout the afternoon with the ASX200 finishing down nearly 1% proper at 7051 points. Meanwhile the Australian dollar is continuing to make new weekly and monthly lows, almost cracking through the 69 handle before a late arvo bounce – but it looks extremely weak from here:

Eurostoxx and Wall Street futures are seeing a small bounce ahead of the European open with the S&P500 four hourly chart showing price wanting to return to above the 4000 point level and stave off what looks like a formal bear market definition:

The economic calendar will include the closely watched German ZEW survey tonight, followed by a slew of Fed member speeches.

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Comments

  1. Hugh PavletichMEMBER

    Russia / Ukraine conflict …

    The West now has the chance to cripple Russian President Vladimir Putin for good … Ben Hodges OPINION … The Telegraph / Stuff New Zealand

    https://www.stuff.co.nz/world/europe/300584935/the-west-now-has-the-chance-to-cripple-russian-president-vladimir-putin-for-good

    Lieutenant General (Rtd) Ben Hodges holds the Pershing Chair in Strategic Studies at the Centre for European Policy Analysis.

    OPINION: There was some trepidation in Europe when, on a recent visit to Poland, US secretary of defence Lloyd Austin stated that America’s new aim “was to see Russia weakened to the degree that it can’t do the kinds of things that it has done in invading Ukraine”.

    In places like Germany, such statements are not taken lightly because there is a genuine fear of direct confrontation with Russia.

    Yet, while the anxiety is understandable, secretary Austin was correct. … read more via hyperlink above …
    .
    .
    https://www.macrobusiness.com.au/2022/05/weekend-reading-7-8-may-2022/#comment-4271537

    … Retired General Ben Hodges talks with Times Radio … in lead up to Moscow Victory Day on Monday …

    Is the Russian army too understaffed to fight? | Ben Hodges (8.28 min) … Times Radio

    Ukraine Will Win | (General) Ben Hodges (30.00 min) … Geopop

    • General Ben Hodges – ???? – Lmmao … that guy would have zero clue about fighting a peer force next to their border anymore than the beguiling belief in some power point presentation that backstopped all in years of indoctrination of being the best of the best and expectations of having a seat on some MIC boardroom/consultancy gig …

      • Grand Funk RailroadMEMBER

        Hugh was touting Hodges last weekend on the weekend links. I dont think Hodges is wrong, and completely agree with him on most issues. But he isnt getting anywhere……….Neither is VVP though, or anyone else……all because nobody can acknowledge what has happened

        VVP has been suckered into fighting in Ukraine – and he thought he would win, and his troops have performed poorly and his reasoning has been palsied and he shouldnt have gone anywhere near Kiev. Now he is going to be kept there simply to maintain face.

        The NATO US EU end of things have been looking the other way on what NATO is actually for for a generation. They have paid no attention to VVP and ignored him when he proposed Russia join NATO (for plausible reason), but they have kept enlarging and they did tell the Russians they wouldnt, and their missiles are aimed at Moscow. But most of all they cant acknowledge the game plan from here is to take the $350 billion they have stolen from the Russians and spend it in Ukraine, then sanction the Russian economy back to the stone age – basically consigning a generation of Russians who thought they were moving closer to the rest of the world to the sociopolitical dustbin.

        And most of all they cant acknowledge this was is for as long as it takes, and there is no way out from here…..

        Gidday again Hugh, I have watched the Hodges vid this morning. I tend to buy almost all of what he says, but he leaves what have been the main points I would be looking at unsaid and unaddressed.

        I totally agree that Ukraine will ‘win’ – they have the armaments and will keep getting them, Russia is now running low on these and looking for replacement chips etc, and (if rumour on the streets of Moscow to be believed) VVP is looking at a call up. The moment he does that he undermines his own position in Russia. Resistance to VVP – which is currently disorganised, quite chaotic, and generally profoundly hypocritical (with the exception of Navalny who is in prison) – can be expected to become a whole load more organised and disruptive within Russia the moment he calls up young men to go and get shot at.

        Currently the conscripts which have been sent to Ukraine appear to be from remote locales rather than young gents from the burbs of Moscow St P and major urban centres. That has shielded the losses to some extent, but that cant go on for long. As someone who has spoken to Russians in Russia within the last day large numbers of Russians are using VPNs and there are sources of information being accessed by people in Russia which are providing a pretty clear and blunt assessment (often with very surprising detail) of what is going on.

        Ukraine will win – one way or another – It is a simple matter of how long this takes and what the ‘cost’ is. Hodges himself notes that the logistics within Ukraine is not great, that will be because chunks of it are openly being pilfered and some of the funding is going into the hands of the Oligarchs with their hands in the till. Hodges suggestion that maybe NATO personnel could step in and sort that out is unlikely to be a goer.

        The other variable in the ‘how long’ dynamic is how well the Russian dig in with what they have. They wont have much public support in the places (even in Southern Ukraine) they have moved into like Kherson in particular, but they will have likely die hard public support in Donetsk and Lugansk, and even the Ukrainians are likely to want to avoid that resistance – mainly because they will know just how desperate and ridiculously ‘brave’ that is likely to be [those guys are highly likely – just like the Ukrainians facing them – to ‘die in a ditch’] and also because they will be acutely aware that the risk of atrocities will really mount in those eastern areas.

        In Crimea (where my personal assessment is that there is very little support for Ukraine, even amongst those who are anti VVP) there would need to be either a very costly military campaign to drive the Russians out – and once again they will be the last word in dogged there – or a very very long and protracted period of economic pressure brought to bear on the Crimeans to get them to vote in favor of rejoining Ukraine.

        Beyond all that, if we assume (I think it a certainty) that a defeat of Russia blows Lukashenko and Belarus out of the water there is then even more chaos there, with both Lithuania and Poland highly likely to lay claim to peoples and lands within what is currently Belarus. While I dont think Belarus will be as dogged in defence of Lukashenko as the Donetsk and Lugansk crowd, it is highly likely to be very chaotic and lead to large scale refugee flows, and load those ‘winning’ with a very costly social reconstruction requirement.

        But the biggest social reconstruction requirement of all will of course be in Russia. Hodges explicitly states in that interview that Biden has stated that no US troops will be going into Russia, but then straight after says ‘some of our allies certainly would’ – those allies would be [inter alia] the Poles the Lithuanians the Ukrainians etc, and at that stage that simply looks like history going around yet again. They will try and go into Russia, they will commit atrocities, they will be subject to the logistics imperatives and the corruption, they will get bogged down, and they will find the locals trying to scalp them every time they go around a corner. It may take some time but they will then lose.

        The other alternative would/may be to simply push back to the border of Ukraine and say no further but to completely isolate Russia [if this could be done]. But the problem with that is that Russia – even if it were to get rid of Putin – would still be generating revenues and that would still create some sort of ‘elite’ and that elite would buy things from across land borders and presumably fuel corruption (again going around in circles) in Ukraine or Belarus or Poland etc, and of course there will be elites in Europe which want access to commodities that Russia produces (the Davos set is heavily into Russian resources). During all this (again assuming VVP departs) there would be for sure the rise of some other leadership type and for sure that leadership type would point to the threat to Russia from NATO and the peoples to the West, and the exploitation of Russia and Russians for the economic interests of people elsewhere. And the circa $350 Billion dollars impounded by the global capital system, which for sure will be spent in Ukraine) will become a talking point too.

        But all this is getting away from some identifiable facts.

        The simple fact of the matter is that the developed world had the chance to engage Russia and bring it into the Wests orbit back in the 1990s. They baulked then on the idea that Russia was simply too big and that it would be far too costly an exercise. Putin asked about Russia joining NATO and the EU, and was rebuffed.

        Then there is the simple fact that Putin himself came to power in Russia as a reaction to the chaos in Russia in the early to mid 1990s. That chaos was fuelled by the developed world to ensure the Soviet Union never came back (when probably a majority of Russians would have voted for that) – that involved the use of the ‘free press’ in the 1996 elections, widespread vote rigging, and looking the other way on epic levels of corruption which created the oligarchs as a class of people. Sure I get that Putin is a kleptocrat and as corrupt as all getout and as dismissive of the concerns and interests of his people as any dictator. But he is observably more alert to those interests and more overtly does something about them than the Oligarch infested polity he replaced, and this is still what Russians tend to think. If you were to refer the thoughts of Hodges to many Russians the first thing they would note is that his whole career was basically Afghanistan and Iraq, and that if they had the choice between something as bad as either of the polities in those which evolved under the aegis of the US, or VVPs Russia, the latter doesnt look so bad.

        For sure I think he has lost the plot, but VVP does actually have traction with his own people. They do actually think – for quite plausible reasons – that NATO is a threat to them, and that the developed world is all about exploiting Russia. And that will lend considerable motivation to resort to arms and do so doggedly – in Ukraine currently, but far far more so if military action were to arrive in Russia.

        And it is for this very reason – there is no easy way out from here – that a small group of nutters like me were arguing that a deal could have been done and should have been done a long long time ago. What is now underway is going to be far more expensive for the world – and particularly for Russians – and is unlikely to lead to any outcome better than that which the developed world had in the palm of its hands a generation ago, but coughed up to fuel a bit of corruption and to pocket the proceeds while embedding the funds into the western worlds politics.

        My thoughts for the moment

        • “Hugh was touting Hodges last weekend on the weekend links. I dont think Hodges is wrong, and completely agree with him on most issues. But he isnt getting anywhere……….Neither is VVP though, or anyone else……all because nobody can acknowledge what has happened”

          Hugh has an easy to identify ideological bias, so lets just all acknowledge that fact and how it predetermines his offerings. Don’t know what your military bona fides are so I can’t determine the veracity of your statements one way or another on the matter e.g. rusted on or just ill informed. Specifically the claim that VVP has no idea or others can’t perceive what is going on considering considering the intel abilities today e.g. coms and satellite.

          “VVP has been suckered into fighting in Ukraine – and he thought he would win, and his troops have performed poorly and his reasoning has been palsied and he shouldnt have gone anywhere near Kiev. Now he is going to be kept there simply to maintain face.”

          Suckered in you say … like since Clinton and the endless breach of treaties contrary to peaceful trade with other nations thingy. Fknhell you park Nazis on their door step after WWII and after 2014 shell civilians randomly, even the president has no control over the mob, ordered them to stop and remove artillery and ignored. Not to mention if Russian military was doing so badly why is the west pumping the Ukraine so full of crap weaponry after more than a decade of intervention and Noonans 9B large- where did that go – Hunters lap top lol.

          NATO is a very small room in the basement of the Pentagon overseen by MIC.

          All the rest of it is just dissociated gibberish and neither you or Hugh has any battlefield knowledge or experience so your both just winging it to supply hope for the uninformed flock of your camps beliefs … seriously these General MSM pundits remind me of Major Darling from Black Adder Goes Forth …

          • Grand Funk RailroadMEMBER

            Suckered in you say … like since Clinton and the endless breach of treaties contrary to peaceful trade with other nations thingy. Fknhell you park Nazis on their door step after WWII and after 2014 shell civilians randomly, even the president has no control over the mob, ordered them to stop and remove artillery and ignored. Not to mention if Russian military was doing so badly why is the west pumping the Ukraine so full of crap weaponry after more than a decade of intervention and Noonans 9B large- where did that go – Hunters lap top lol.

            I think I’ve addressed all that at length to be honest, and my opinions on the subject probably arent that different to yours. Neither Hugh or I were touting any particular battlefield awareness – though I have noted I am in daily contact with people in Russia and Ukraine – which would leave you the punter posting here pointing at your nads and flexing. Well done

          • Don’t care about your anecdotal personal group thoughts as they are more than likely skewed by some ideological bias. The history is all there for those that don’t have some goofy belief system like ***Libertarian*** Marxism [groan] making intellect a paper toilet roll experience on reality.

            All battlefields are dynamic, hence the need to dial in past objectives with on the ground experiences by a command and control that seeks an outcome and not some silly MSM parade. To this point at this time I give the Russians the attaboy badge and the Western ISIS funded Fascists a big fail …

          • Grand Funk RailroadMEMBER

            …..spot the disconnect

            Don’t care about your anecdotal personal group thoughts as they are more than likely skewed by some ideological bias.

            then

            To this point at this time I give the Russians the attaboy badge and the Western ISIS funded Fascists a big fail …

            What if someone here were to observe vis your gradings of anything that ‘Don’t care about your anecdotal personal group thoughts as they are more than likely skewed by some ideological bias.’ ?

            Keep flexing, and pointing…..

          • Because the battlefield is the determinate and I don’t see the Russians going the Merc thingy or needing to have past post date small arms off loaded like a happy meal smile for your fat kids market enhancer marketing Bernays sauce and call it a presumptuous win. Holyfknshite they are talking about 1 our of 4 works with all this dreck, wannabe that guy on a battlefield.

    • Problem is if the goal is to cripple Russia further then it just raises the prospect of the use of a Nuclear Weapon. It’s far better to beat Russia back and have open dialogue about how to create a ceasefire. Stability and peace should be the aim, not creating another set of problems for the future. That will likely result in another blow up a decade or 2 from now.

      • Ronin8317MEMBER

        Fall of Empires are messy affairs. The problem with Islamic terrorism stems from the fall of the Ottoman Empire. The European power of the time went on to crush the remnant of it until it is no longer Islamic, thus modern Turkey was born. NATO expansion is merely another chapter in history, and the US will not stop until Russia is no longer ‘Russian’.

  2. So many property & finance folks at work are gearing up for a pretty harsh recession. Colleagues in commercial property, investment & PE folk in the US, etc. I always thought things got ugly when “no one could have seen it coming” and “whocouldanode”.
    So – given every second person is calling it and some of the smarter folks are preparing for it (liquidating assets, etc) then by definition doesn’t that mean it won’t happen?

    • ErmingtonPlumbingMEMBER

      I got a random unsolicited call from a local real-estate sheila today wanting to know if I want to sell my house as a place down the street recently sold for blah blah blah.
      I’ve been getting a lot of these calls of late.
      I gave her my standardised response of I’m not going anywhere for another 15 to 20 years so maybe give me a call then.
      That usually gets rid of them but this one was a bit chatty so I asked her why they need to telephone canvas for vendors when everyone is rushing to sell before raising interest rates crash property prices.
      You guys should have heaps of work I went on.
      We always want more was her reply.

      • I’ve been copping loads of telemarketing calls. If the number isn’t in my phone I pick up, but don’t say hello, I just wait. Often the call drops after 1 or 2 seconds.

        You see these calls centres use a dialler that automatically calls prospects from a list. When you say hello the system then patches you through to a human in their centre waiting to pitch.

        But if you don’t answer, it won’t hear the hello and will drop the call. I do this now because I often argue with them to stop calling me and remove me from their call lists but they don’t give a flying you know what and still call me.

        I even tell them it’s the wrong number and they say, they know it’s me, and not the wrong number. So I say, I told you not to call didn’t I? And then used to hang up. But it’s far easier to let the call drop than argue with some boof head in an Indian call centre.

        My hot tip of the day.

        • Grand Funk RailroadMEMBER

          I do a version of what you do….

          If the number isnt someone I know (in my phone) I answer in either Russian, or a heavily slavic sounding accent, often followed up by yelling ‘allo!’ incoherently in the line for a bit. Sometimes they will ask ‘Is this Mr Grand Funk’ to which I usually reply ‘shto?’ a number of times and then hang up…..

          On one occasion recently they called me and I opened up with ‘Geelong anal plugs, how can I help you?’

          • boomengineeringMEMBER

            Been getting a lot of voicemails reading that my boss is wanting me to call back, or my Doctor. I have no boss nor Doctor so don’t respond to any at all.

          • I say my name is skippy and start talking about neo library terrorism and my ideological bias … and they hang up

        • I get out the plastic duckwhistle, a souvenir of the Royal Melbourne Show.
          And I put it up to the phone, and blow really, really hard.
          It is so loud and so piercing!
          And we are relatively untroubled by unsolicited calls – they can take your number out of the random spin.

        • ErmingtonPlumbingMEMBER

          I have to answer all of them so as to not miss out on new customer calls.
          I’m always polite (don’t want them putting me on a punishment list that might = extra call centre calls)
          But I explain that I never respond to any kind of unsolicited telephone communication or give out any information over the phone.
          They often continue with their spiel about Discounted solar panels or cheaper energy bill or yadda yadda yadda but I just politely explain again “I never respond to any kind of unsolicited telephone communication or give out any information over the phone,…ever,…I don’t even do surveys mate” I’ll sometimes add.
          That usually ends it but with more persistent ones that push harder I just repeat my “I never respond to unsolicited telephone communication or hand out information over the phone,…Ever” with mirth in my voice and a Sorry mate. (I’m usually enjoying their frustration by this stage)
          But I never hang up first ,…that would be impolite.
          They always hang up by the 5th or 6th “I never respond to any kind of unsolicited telephone communication or give out any information over the phone,…ever”

          This Kitboga fella is a true hero in his dealings with Indian call centre scammers.
          I’ve spent dozens of hours laughing my arse off at these clips.
          He wastes their (and my) time beautifully
          https://youtu.be/Vx4RzlopDpw

        • You need to change your tactics, if you want them to leave you alone. Make them take the call. Waste as much of their time as you can. That costs them money. The more time you waste, the more it costs them. I’m down to a couple of calls a month now, from more than a couple a day six months ago…

        • bubbah buddhaMEMBER

          Heres what I do….”hello yes”…let them talk for 20 seconds then say ‘sorry just one minute someone is at the door’ …..leave em there for 2 mins…come back and say sorry what were you saying, let em launch into their speil…then interupt with excuse me for one moment (go and do whatever you were doing before answering)…..leave em waiting for 3 mins…and repeat until they get angry or hang up….tables reversed, their time wasted…works a treat n pisses em off so much!

    • Never fear C3P0 good corporate citizens like Blackstone are prepared to buy up at fire sale prices huge amounts of RE just like they did after the GFC in the U.S. – that way absentee investors never are diminished. Best bit is becoming price setters and all the kick back garnered from maintenance subbies …

  3. They are not going to let 4000 on the S & P 500 go without a fight…..it slipped under their guard last night but they will try to regain it tonight………………………. never mind the prices , you have to get supplies first in this new world……Tesla

    https://twitter.com/Sino_Market/status/1523838874484559874

    Nigerian Airlines

    https://guardian.ng/news/local-airlines-to-shut-operations-monday-as-jet-a1-hits-n700-litre/

    Resource constrained wherever you look

  4. Hugh PavletichMEMBER

    New Zealand …

    Westpac: Don’t expect an oversupply of houses … Miriam Bell … Stuff NZ

    https://www.stuff.co.nz/life-style/homed/housing-affordability/128594669/westpac-dont-expect-an-oversupply-of-houses

    New Zealand’s massive shortage of housing has started to turn, but the country is not headed towards an oversupply, Westpac says.

    Many years of under-building, particularly following the global financial crisis in 2008, meant supply did not keep pace with a rapidly growing population.

    Between 2015 and 2020 the population grew by around 11%, but over that same period housing stock only increased by 7%, according to Westpac’s economists. … read more via hyperlink above …
    .
    .
    New Zealand May Eliminate Housing Shortage Within Years: Westpac … Tracy Withers … Bloomberg

    https://www.bloomberg.com/news/articles/2022-05-09/new-zealand-may-eliminate-housing-shortage-within-years-westpac

    New Zealand … getting on top of supply … consented / approved a whopping 78% more than Australia in March 2022 !

    https://www.macrobusiness.com.au/2022/05/baby-boomers-have-no-clue-about-housing-affordability/#comment-4272131

  5. Get ready guys for the commodities super price boom to really get going

    Party on me when we hit $300 iron ore & we might even get to have a parity party on the AUD again

    • The Travelling PhantomMEMBER

      Interesting approach bcnich, who do you reckon will be buying so much to jack the prices up? The yanks want to build new military equipments?
      China economy doesn’t look great and I doubt they’ll save the Aussie economy another time

      • Yeah, I’m struggling to see it happening. But it could if world splits into two, there will need to be a lot of reshoring or realigning supply/production. But even this wouldn’t match China’s demand. But if China finally manages genuine “common prosperity” ie Chinese consume most of what they produce, this would still require some commodities to produce cars etc. But for iron ore it would have to be India urbanising, so unlikely, especially when the days of easy money are fading.

    • Narapoia451MEMBER

      Where’s the demand coming to drive a boom in your opinion? I know I’ve asked on a few threads but I’m curious as to where you see it?

      Unless china starts building empty cities again the consensus seems to be that even if there is concerted infrastructure spending around the world it won’t exceed the demand generated by China’s apartment frenzy through the last decade.

      Or do you foresee a reduction in supply to drive up the prices?

    • Bcnich has gathered a following on MB but wasn’t there like three main predictions 6 months ago – higher interest rates faster than most predicted (got it), ASX to like 9000 or something and iron ore to $300?
      1 out of 3 aint bad or something?
      I love a wild contrarian prediction as much as the next guy but I don’t believe I’ve seen the thesis on why iron ore or the ASX is going to blow off into the stratosphere in the context of rising rates. The ASX has been in nothing but churn for the past 12 months and has cracked down again, iron ore had a nice rally after the initial crash but also cracking lower. Also, if iron ore doesn’t go to the moon Doge-coin style what’s pushing the AUD up to parity, we’re at what, like nearly decade lows (ex COVID shock months) against the USD at the moment? Happy to be corrected.

  6. https://www.rferl.org/a/china-learning-west-reaction-russia/31842541.html

    “And fretting about this could indeed lead China to make decisions that could be quite something for the world, like starting to divest from U.S. Treasury [bonds]. So, it is indirectly related to what we’ve seen happen from the war in Ukraine, but it’s not a direct [effect]. I think that it’s important to take into account that the whole world is learning right now from the [Western reaction] to [Russia’s invasion] and, in the case of China, it is even preemptively reacting based on what it is learning from this war.”

  7. Hugh PavletichMEMBER

    Own Shares in the Future of AI Food Service With Miso Robotics … Miso Robotics / Zerohedge

    https://www.zerohedge.com/sponsored-post/own-shares-future-ai-food-service-miso-robotics

    The quick service restaurant (QSR) industry was born in disruption — out-competing old incumbents with innovations like drive-through windows, online ordering and at-home delivery. Now Miso Robotics is leading the next wave of transformation, with cloud-connected workstations where a proprietary AI-powered robot named Flippy cooks chicken wings and works the fryer, every bit as seamlessly as a human cook. … read more via hyperlink above …

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