Houses and Holes


Why Anthony Albanese must never see power

The propertocracy has won another round in the policy fight. Not courtesy of the blood-sucking interests. Rather via the hand of those that set out to end it and instead succumbed to its corrupt siren song. As Labor gives up on property tax reform, any and all reform actually, the thirty-year Australian property bubble once


China mulls more steel curbs

China has been progressively tightening the noose around iron ore for months now. With some success given recent falls in iron ore prices. Measures so far have included: Releasing strategic reserves. Punishing speculators and limiting futures bidding. Constraining steel output which will lower iron ore imports so long as the curbs are wide enough to


Another Morrison vaccine hits the skids

From the beginning of the pandemic, Morrison Government vaccine procurement policy has been written by either carpet-baggers or idiots. First, it sent Pfizer packing mid-last year. God only knows why. Perhaps because its shots were the most expensive. Second, it over-committed to Astra Zeneca, a firm that has never made vaccines before. Perhaps Morrison did


China goes all-in on Fort Derrick COVID origins

When post-truth becomes the fog of war, via Sinocism today: Global Times: ‘Political virus also needs origin tracing’ as US politicizes, stigmatizes epidemic: FM Wang Yi The coronavirus needs origins-tracing, and so does the political virus, said Chinese State Councilor and Foreign Minister Wang Yi, noting that the US has been trying to politicize the


Fed taper and the AUD

MUFG on the Fed this week: Fed in focus with USD set to remain supported as shorts are lightened USD: Fed tapering discussions “progressing”. The primary macro event this week will be the FOMC meeting on Tuesday and Wednesday and these meetings are increasingly important given we are gradually approaching the time of commencing the


What next for yields?

Goldman with the note: In 1H rising inflation expectations and inflation surprises have been a driver of higher rates volatility, resulting in a more negative equity/bond yield correlation. But more recently investors’ worries of a growth slowdown in 2H have increased. In particular last Monday risk appetite fell sharply and risky assets sold off, only


When will China panic about growth?

BofA with the note: Credit easing holds the key in 2H •Despite the recent reserve requirement ratio(RRR)cut, mixed data in 2Q open adata-dependent phase of policy making. •In our view, export uncertainty and investment weakness in 2H will lead to credit easing and help stabilize total social financing (TSF) growth at around 10.7%. An unexpected


Big Iron blowoff drives another ASX all-time high

XJO is at another new record high this morning as the economy hurtles into recession! Which bonds yields are clearly signaling as the curve is obliterated: The Australian dollar rally stalled out on Sydney’s still rising infections: Big Banks are struggling other than the CBA bubble: But today’s star is Big Iron. BHP has roared


Evergrande pulls special dividend

This was always one serious Hail Mary: As China Evergrande Group mulls a special dividend to revive confidence in its tumbling stock, analysts are gaming out several scenarios that could have markedly different implications for equity and bond investors. Chairman Hui Ka Yan, who directly or indirectly controls three-quarters of outstanding Evergrande shares, will meet


Stock market quietly deflates

Morgan Stanley with the note: NBER confirms the shortest recession in history at just 2 months. From the day the recession began last year, we’ve been ahead of the consensus with the progression of this new cycle staring with the v-shaped recovery. It’s all happening faster than normal and that means rotations and changing leadership


Consumer confidence locked down

ANZ weekly consumer confidence locked down: ANZ-Roy Morgan Aus Consumer Confidence: Last week confidence fell 3.5% to its lowest since Nov 2020, but it is still well above the early pandemic lows, suggesting the economic hit from these lockdowns will be less than in Q2 2020. #ausecon #ausretail @arindam_chky @DavidPlank12 — ANZ_Research (@ANZ_Research) July


I will say it again, never invest in China

There are few investment ideas that show the power of groupthink better investing in Chinese stocks. For years, we have seen investing legends crippled by such investments as one after another they fell prey to the inherent sovereign risk of the CCP. Sure, there are fortunes to be made. But there are fortunes to be


The financial (in)stability risk of stablecoins

From JPM comes the understatement of the century: The financial stability risks of stablecoins The financial stability risks of stablecoinsAmong the more interesting and potentially impactful developments of explosive growth in cryptocurrency markets has been the advent and broadening acceptance of stablecoins. As we have noted in prior work, these tokens form the backbone of


China’s leading indicators still fading

Bloomie runs a series of leading indicators for China. They are not comprehensive but aren’t bad, either as a general leading indicator: Bloomberg Economics generates the overall activity reading by aggregating a three-month weighted average of the monthly changes of eight indicators, which are based on business surveys or market prices. Note the weakness especially


Lombard: Chinese greening to hammer iron ore, coals

TSLombard with the note. Last September, Xi Jinping surprised the world by announcing two ambitious climate goals: that China would reach peak carbon emissions by 2030 and achieve carbon neutrality by 2060. Beyond the headline carbon objectives, the green initiative is an important domestic tool to bolster government efforts to centralize political power and allocate


Investing legends tortured by bond “pain trade”

Mwahahaha! The FT has a great story today on the bond market pain trade: Heavyweight bond investors are sticking with bets against US government debt, saying an unflagging rally paints a false impression of deep concern about the economic outlook. BlackRock and JPMorgan Asset Management are among the fund managers continuing to wager that US


Chinese property developer Minsky moment intensifies

China’s Three Red Lines policy for deleveraging property developers has pushed the largest and most highly geared to the edge of extinction. Everngrande is fighting on, pulling every string that it can: At least two of Hong Kong’s biggest lenders are reconsidering halts on mortgages for China Evergrande Group’s unfinished properties, after the decisions were


Australian dollar bears gather

Forex was stable Friday night as the week’s fireworks subsided and risk rallied hard. DXY was up and EUR down: The Australian dollar dead cat faded: Gold fell, oil firmed: Metals were firm: Miners lifted: EM stocks not so happy: Junk fine: Curve squashed again: Which drive FAAMGS mad: Not much data to report from


Lombard: Don’t worry about Delta

TS Lombard with the note: Don’t let your heart rule your head. There are times when one cannot help being emotional, and the last 18months have pushed many of us to emotional breaking points. But when it comes to managing money, introducing emotion into the equation often leads to bad decision-making. (This author was guilty


Why are bond yields plunging?

This is a bit like asking Dracula why there’s a blood shortage but here’s Goldman with its best effort on why bond yields are plunging: Q: The reflation theme in markets seems to be unwinding, led by bonds. What is recent price action signaling about the recovery? A: Since the recent Mid-may highs, both 10y