Houses and Holes


Evergrande is symptom not cause

The problem with getting the diagnosis wrong is that you mistreat the symptoms. If you think you have a cold but really have a brain tumor then soldiering on with Codral is not a great idea. Evergrande yesterday released an unbelievably vague statement about reaching some deal with someone, somewhere. More importantly, the PBoC injected


Australian dollar pops and drops on Evergrande vs Fed

Forex tells a very interesting tale today. Following on from Evergrande’s extraordinarily dubious news and a PBoC liquidity injection yesterday, which dumped DXY, the Fed was hawkish which launched DXY: The Australian dollar popped on the crosses but was whacked back down vs DXY: Gold faded. Energy is driving the Fed into policy error crescendo:


Manchurian Dan’s dodgy deal with China exposed

Paul Monk via Sky: Former defence head of China analysis Paul Monk says Victorian Premier Daniel Andrews’ secret deal with China was part of the Chinese government’s strategy to operate in Australia “without federal oversight”. On Monday, the Victorian parliament forced the Andrews government to release the document detailing promises made with China, which had


Goldman: Debt limit “collision course?”

Goldman with the note: House Speaker Pelosi and Senate Majority Leader Schumer have announced that they plan to move forward with legislation that ties an extension of government spending authority (a “continuing resolution”) with a suspension of the debt limit.  A vote in the House looks likely this week. Republican leaders have reiterated their opposition to


ABC outraged by limits on the crypto scam

Ah yes, the crypto scam. The private money and shadow banking parasite leveraging off nothing. Now the ABC is a HODLer: Cryptocurrency is creeping into the mainstream but Australia’s laws have failed to keep up with the pace of growth, prompting calls from the industry for regulatory certainty. Michaela Juric, also know as Bitcoin Babe,


Leading index plunges

Note from Westpac: The Leading Index has held up surprisingly well during this downturn but it seems likely that there is more weakness on the way. For example, while all components have contributed to the slowdown in growth since March, commodity prices and equities have been reasonably resilient. Developments in those markets in September are


Paul Keating spits his AUKUS dummy

Silly old coot: Former prime minister Paul Keating has escalated his attack on the new AUKUS security partnership unveiled by the Morrison government, unleashing fury on his own side for supporting the deal and characterising it as the “surrender” of Australia’s control of its military. In a no-holds-barred statement, the former Labor leader said Prime


Evergrande contagion “contained so far”

TS Lombard has a crack: The path from last year’s growth slump back to economic normalization is becoming increasingly bumpy. On top of Xi Jinping’s “common prosperity” drive and crackdown on internet platform firms, Covid’s Delta variant and the impending fall of the property behemoth Evergrande are new upsets. Under China’s “zero-tolerance” policy on controlling


Morrison accelerates children vaccine approval

Finally, the Morrison Government gets it: Health Minister Greg Hunt has urged pharmaceutical giant Pfizer to seek approval for its COVID-19 vaccine to be given to children as young as five in Australia as soon as possible. Hours after the company announced plans to seek approval from US regulators for its vaccine to be given


Can the Fed save China?

Nothing is more amusing than reading the smartest guys in the room as their theses fall apart. JPM leads us off: The market sell-off that escalated overnight we believe is primarily driven by technical selling flows (CTAs and option hedgers) in an environment of poor liquidity, and overreaction of discretionary traders to perceived risks. However,


FriendlyJordies slaughters property development

Yep. Nice mention of MB in the video. He also gives a passing reference to mass immigration. As Leith noted last week in relation to Jordan Shanks’ other video, the underlying driver of Sydney’s over-development in the federal government’s ‘Big Australia’ mass immigration policy: The fact remains that the only reason why Sydney (and Melbourne)


China provoked AUKUS, not the other way around

Via The Economist today: Just occasionally, you can see the tectonic plates of geopolitics shifting in front of your eyes. Suez in 1956, Nixon going to China in 1972 and the fall of the Berlin wall in 1989 are among the examples in living memory. The unveiling last week of a trilateral defence pact between Australia, the


Evergrande shock turns China shock

Bill Bishop at Sinocism sums it well: Thanks for your patience last week. The PRC is on holiday today and tomorrow for the Mid-Autumn Festival. The newsletter will be off tomorrow unless there is something interesting going on. Evergrande executives and its regulators are unlikely to be enjoying this holiday. Evergrande the grande grey rhino


China IS commodities and it’s going to break ’em ALL

When will China relent on its economic reform program around property developers? When will it stimulate? My answers are not yet and don’t hold your breath. Why? Let me show you two charts. The first nicely captures the extreme bullshit being peddled by Wall Street about a new commodities supercycle. Note that the trigger is


What is this “war with China” of which you speak, Mr White?

Endless China fanboi, High White, penned a great piece at The Saturday Paper that summarised the nuclear debates over the weekend: If Australia’s submarines were intended primarily to defend Australia and our closer neighbours, then there is no way we’d consider nuclear propulsion. But the navy decided many years ago that the primary role for


Australia will be absolutely fine without China

We were fine before it. And we will be fine after it. So disregard the panic coming from the likes of Terry MCrann: …all of those Chinese benefactors outside iron ore are currently on Covid-hold, along with other more “minor” exports which China, unrelated to Covid – apart from perhaps, a certain ­irritation over a


The full Evergrande maelstrom

Full note from Zero Hedge. I agree with the premises but not the conclsuion for another broad stimulus. At least, not yet. Xi appears committed to giving this reform round a genuine crack.   Something historic will happen this week: as Beijing warned last week, China’s largest and most indebted property developer, Evergrande, will default on some (or all)


Evergrande more Greece than Lehman

The Evergrande saga is intensifying daily. The firm’s equity is all but gone. Its debt barely trades. Its sales and assets are crashing in value. Its brand damage is ruinous: Moreover, we have now reached a point of open crisis for the entire Chinese property development sector. Funding spread blowouts are indistinguishable from being frozen.