David Llewellyn-Smith


Europe gets it together…temporarily

Via the excellent Damien Boey at Credit Suisse: Temporary fiscal union forming. The European Commission (EC) is launching an unprecedented fiscal package of €750 billion (5.6% of GDP) to deal with the fallout of COVID-19. Under the plan, €500 billion will be distributed to member states in the form of grants, while the remaining €250 billion will be available as loans, with the grants not


Labor tears itself apart over China

Via The Australian: Former special forces captain Andrew Hastie and Labor Senator Kimberley Kitching will co-chair a new global parliamentary alliance urging governments to adopt a tougher stance against China. The Inter-Parliamentary Alliance on China has been established across seven national legislatures and the European parliament. It is expected to expand further amid growing international


Grantham: Market “lost”

Superb as always from the GMO crew: UNCERTAINTY HAS SELDOM BEEN HIGHER Oddly, Neither Has the Stock Market By Ben Inker As we have worked over the last couple of months to understand the likely impact of the pandemic on economies and asset classes around the world, the most striking feature is the extraordinary uncertainty


Anti-lockdown proponents dills

Could not agree more. At FTAlphaville: When considering which measures are appropriate for tackling coronavirus, and which should be eased first, it’s crucial that we think seriously about the various trade-offs that we are making, and the potential collateral damage wreaked by various strategies. Clearly, there will be massive effects from the lockdowns imposed to


UQ “manufactured” Pavlou evidence

Via the ABC comes the CCP’s leading university in Australia learning from its masters: An alleged victim of suspended university student Drew Pavlou has rejected suggestions he felt threatened by the anti-Chinese Government activist, and says a complaint involving him was “manufactured”, in an email produced by Mr Pavlou’s lawyers. The revelation came as the University


Santos to poison NSW for thousands of years as it steals from it

And the outrage goes on, at the AFR: Santos’ $2 billion-plus Narrabri gas project is set to proceed for assessment under NSW’s independent planning process after the lower house of the state government voted down a bill on a moratorium on coal seam gas that controversially secured Labor’s support in the Upper House. Chief executive


Nev Power’s great gas fakening

It didn’t take long for Nev Power’s boondoggle to descend into farce, at the AFR: Former Fortescue Metals boss Nev Power has distanced himself from plans to dramatically increase public spending on gas infrastructure, saying a leaked document does not represent the view of the government’s COVID-19 commission. A manufacturing taskforce established as part of


ME Bank dills face the music

Via Banking Day: A showdown looms this morning between ME Bank’s board and irate shareholders seeking accountability for the ruinous decision to slash redraw entitlements of thousands of its mortgage borrowers. ME’s board is due to meet for the first time since the bank’s reputation was savaged in the first week of May by customers


How Nev Power rolls

Nev Power has taken to central planning like a miner to iron ore: The National COVID-19 Coordination Commission has detailed priority manufacturing sectors it would like to see developed and expanded without government assistance to the Senate’s COVID-19 Committee. NCCC chair Nev Power said the commission’s manufacturing task force wants to enhance energy intensive manufacturing,


UBS: Iron ore all about Brazil

Yep. Via UBS: Iron ore appears well-supported by current tightness The iron ore price (62% CFR China) has averaged US$89/t YTD with spot now over US$100/t and above our CY 20e forecast of US$86/t. We are comfortable with our forecast based on 1) a strong recovery in Vale iron ore production which will require a


Credit Suisse: Housing stimulus “small”

Via Damien Boey at Credit Suisse: Small housing stimulus package. The Federal government is launching a new $688 million housing stimulus package. Selected owner-occupiers looking to build or renovate in 2H 2020 will be able to get a $25K grant from the government. To be eligible, home buyers need to be owner-occupiers rather than investors. They


ASX fakeflates through 6000

The massively overheated Australian dollar is pulling back a bit this morning: Bonds are bid after last night’s shellacking: XJO has recaptured 6000: On a cool 20x NTM PE, the highest since 1999 and the greatest bubble of all time, until today: Big Iron ore still running and looks positively cheap with Materials on a


Trump has jumped the shark this time

Republicans are joining the backlash, via FT: The US defence secretary opened a rift with Donald Trump, saying he did not agree with the president about sending the army on to the streets to clamp down on protests that have erupted across the country since the death of George Floyd. Mark Esper’s remarks came amid


And now for some Chinese QE

Via Damien Boey at Credit Suisse: Executive summary. In this article, we explore some key concepts for understanding the unique plumbing of the Chinese monetary system, as well as some of our preferred tools for asset allocation. Our “deep dive” is motivated in part by recent policy announcements by the People’s Bank of China (PBoC) against the backdrop of the


Philippines re-embraces US troops

Via Reuters: Philippine President Rodrigo Duterte has suspended his decision to scrap a two-decade-old troop deployment agreement with the United States due to political and other developments in the region, his foreign minister said on Tuesday, The termination of the Visiting Forces Agreement (VFA), which is central to one of Washington’s most important alliances in


RBA drops deflationary AUD-bomb on economy

As the Australian dollar’s unruly melt-up continues let’s revisit what the RBA said yesterday: At its meeting today, the Board decided to maintain the current policy settings, including the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points. The global economy is experiencing a severe downturn as countries


China services PMI jumps but…

Via Markit: Better but it’s still shite. Remember that these are directional indexes so things getting better is pretty meaningless if the base is disastrous, which it is. I’d like see these indexes well north of 60 if we were going to see any kind of v-shaped recovery worthy of the name.


What would a Biden Administration do to markets?

Time to take the possibility of a dementia president seriously: Here are the key policies affecting markets, material via Politico. Double the minimum wage: There’s broad support among Democratic presidential candidates for doubling the hourly minimum from $7.25 to $15, and then allowing it to rise automatically with inflation, as proposed by House Democrats in


Labor wowsers lecture households on stimulus spending

Labor is a genuine dill. Via Domain: The Australian Prudential Regulation Authority on Monday said 1.8 million people had so far used the scheme, withdrawing more than $12 billion. Less than one per cent of applications have been rejected. Analysis by credit bureau illion and consultancy AlphaBeta, part of Accenture, shows those using their super


ASX fakeflation melts up

It’s something else now. The AUD is in an unruly melt-up: As the suicidal RBA snores, bonds are selling too: XJO looks positively sober next to the currency. Not long now before it is crushed by it: Big Iron is one of the few in a real-life boom: Big Gas is lagging oil which has