Houses and Holes


Goldman won’t mention the ore

Clearly, Goldman Sachs is still too long commodities: Growing scarcity across physical markets. Since last October, policymaker and investor focus has remained on the vaccine-driven demand recovery from the deepest recession on record. Yet today, physical goods demand has reached such high levels — above pre-pandemic trends in all but oil — that the system


Evergrande hard landing turns fireball crash

There is nothing that incenses the Chinese population more than money lost on realty. Evergrande is on the receiving end of that anger: China Evergrande Group is facing mounting protests by homebuyers, retail investors and even its own employees, raising the stakes for authorities in Beijing as they try to prevent the property giant’s debt


Joye: QE3 is big, CLF erased

Chris Joye at Coolabah with the note: In the AFR this weekend I write that after months of debate about whether the Reserve Bank of Australia would increase or decrease its stimulus in recognition of the COVID-induced recession, Martin Place delivered on its promise to maintain a “flexible” and open-ended approach to its government bond purchases (aka


Chinese property developers dive towards hard landing

Chinese credit is slowing and the property development segment is diving into a hard landing. The signals are everywhere. Goldman has more: Evergrande developments the main driver for near term risks. With Evergrande bonds pricing in elevated risks of default, investors are questioning how “fat” the tail risk is for China property bonds. More specifically,


Chinese credit goes down down

Chinese credit for August was out Friday night the news is poor. TSF came in at 2.9tr yuan: This is 17.3% lower than last August and the 3MMA is still down 15.9% to boot: Year to date new credit is still hovering around -16% and has been for six months: The rolling annual mountain is


Wall Street turns bearish

In lieu of my own assessment of the smartest guys in the room this week, here is an alternative from ZeroHedge. In my view, a commodity crash and equity correction are dead ahead as China slows much more than the market is pricing for. Inflation is not the risk, deflation is. Morgan Stanley We start


And now for an American debt limit shock?

Goldman with the note: Treasury Secretary Yellen sent a letter to congressional leaders this morning (Sep. 8) indicating that the the Treasury will exhaust its cash and extraordinary measures “during the month of October”. This is in line with our expectations, though slightly sooner than the “October or November” timing that the Congressional Budget Office


Iron ore hits new low as Evergrande gets extend and pretend

The soft bailout of Evergrande has begun: Regulators in Beijing have signed off on a China Evergrande Group proposal to renegotiate payment deadlines with banks and other creditors, paving the way for a temporary reprieve as the cash-strapped developer struggles to come to grips with more than $300 billion of liabilities. China’s Financial Stability and


Westpac: Growth crushed. RBA to print

Westpac with the note: Following the stubbornly high Victorian case count and the associated decision by the Victorian government to abandon the zero case objective we have reviewed our growth forecasts for the Australian economy. The Growth Numbers Our forecasting process is based around using our estimates for growth in hours worked in the states


Evergrande’s death march

I could write this one up but ZeroHedge has done a good job of it. The takeout is materially lower Chinese property starts ahead… With algos busy chasing upward momentum in futures and global stocks, the biggest – if largely ignored story – remain the ongoing collapse of “China’s Lehman“, the $300+ billion China Evergrande,


Goldman: Biden stimulus on track

Goldman with the note: Sen. Joe Manchin (D-W. Va.) has attracted substantial attention with an op-edin the Wall Street Journal regarding his views on upcoming fiscal legislation. In it, he calls for a “strategic pause” on consideration of the $3.5 trillion/10 years budget reconciliation legislation, which Democratic leaders hope to assemble in committees over the


What is Common Prosperity?

TS Lombard has a crack at it: The mantra of “Common prosperity for all”, proclaimed by Xi Jinping in more than 60speeches this year, is an ideologically appropriate slogan for a Communist Party after decades of lop-sided growth and rising inequality. The promise of greater fairness, re-balancing between labour and capital, increased social provision is


Chinese hard landing proceeds apace

A seriously behind the curve Goldman Sachs is still trying to defend its capital-devouring long commodity call. Having completely missed the severity of the China slowdown, and associated commodity crash, it now says a rebound is imminent: We have to add to the mix a combination of weather related disruptions, rising regulatory risk andthe material


Daily iron ore price update (China dirt)

The ferrous complex was mixed on Friday 3rd of September 2021: In news, China wants more ore: China’s iron ore producers aim to increase domestic iron ore concentrate output by more than 100 million tonnes between 2021 and 2025, an official with the country’s steel industry association said on Saturday. Luo Tiejun, the vice-chairman of


Sydney is much sicker than Berejiklian’s making out

Thankfully we still have some independent press. The Saturday Paper: The rate of Covid-19 hospitalisations in New South Wales is being reported at one-third of the real figure, with the actual numbers being masked by a decision to only report those who end up in medical facilities, and not the thousands receiving care under the


Australian dollar short squeezes higher

Forex markets sustained their counter-trend actions Friday night, and how. DXY fell like a stone while EUR and AUD are roaring: It’s a pretty wild rally suggesting a short squeeze yet CFTC data got even longer: Commodities all rose: Miners less: EMs stocks too: EM junk was soft: The US curve steepened: And Growth led


US dollar smiles until Fed punched in the face

TS Lombard with the note: Powell reiterates AIT policy.In the end, the Jackson Hole policy retreat did not herald the announcement of a major policy shift (we never thought it would, but some investors were betting on a hawkish surprise.) Markets interpreted Fed Chair Powell’s speech as dovish, buying equities and selling USD. Indeed, Powell