David Llewellyn-Smith


Chinese PMIs weaken

Via China’s NBS comes the February PMIs. These were weak but even more so when one considers that the great Chinese New Year people migration was effectively cancelled this year meaning more people remained at work. It may simply be that that distortion has not been picked up by the survey’s seasonal adjustments: In February ,


Morrison Government rape protection racket goes nuclear

Don’t say I didn’t warn you. Allegations of rape and cover-ups thereof within the Morrison Government and the Liberal Party continue to worsen. Now there are media indictments against a cabinet minister, at Domain: Accusations against a federal cabinet minister have been referred to police after two senators received an anonymous letter on Friday with


The Strayan: Australian Open booing a “positive” for Dan Andrews

Sir Fomo McSpruikerson is an expatriate billionaire and proud proprietor of The Strayan, a vanity media project designed to boost his assets. Jacinda Ardern launches “Hugs for Houses” program amidst unaffordability crisis New Zealand Prime Minister Jacinda Ardern has launched a controversial new “Hugs for Housing” program, aimed at tackling the countries worsening house price


Liberty warns APRA property prices overheating

We noted this week that mortgage applications are now so hot that banks are unable to keep up and approval times are blowing out spectacularly. House prices are on the march too. FOMO is loosed and there is no prospect of higher interest rates for years. So freshly listed Liberty Financial is enjoying an unexpected


Goldman: “Urban flight” to continue

Via Goldman: Home prices are rising at their fastest pace since 2013 but shelter inflation is low and falling (see Exhibit 1). Should we expect higher home prices, significant fiscal support, and a quick economic recovery to also produce above-trend rent growth? Or has the coronacrisis led to a more persistent divergence as households abandon


Will the RBA target house prices like RBNZ?

Will the RBA target house prices? Sure it will. To push them higher. There is literally zero prospect of it doing anything else at this stage. And a negative probability of the Morrison Government following recent moves by New Zealand’s Ardern Government to force responsibility for house prices onto the RBNZ. The AFR is asking


Taper tantrum 2.0 begins as markets catch hysteria virus

What a business cycle this is. Juiced by virus amphetamines it is moving extraordinarily fast. Last year we had the crash down, the crash up, a depression, thumping stimulus and K-shaped recovery, a gold boom and bust on debasement, growth stock bubble and now bust plus value rotation, an alleged commodity super-cycle, and now, one


Goldman’s bullish oil case

Goldman is pumping this one like there is no tomorrow: The rally in oil prices has paused after Brent prices briefly reached the $65/bbl summer forecast we first set-out last August, on the realization that frigid US weather will only marginally tighten the global market and over concerns for a return of Iranian barrels. Despite


Frydenberg Unstimulus sinks into capex funk

Capex intentions are out from the ABS. These figures are estimates for the next eighteen months of business investment, direct input into GDP. They are better than some feared but still not well. Via ABS: Total capital expenditure Estimate 5 for 2020-21 is $121,428m. This is 4.8% higher than Estimate 4 for 2020-21. Estimate 1


Is the post-COVID boom going to bust?

BofA: In a normal business cycle recovery, the economy gradually returns to full employment, causing a lagged return of inflation pressure. This gives monetary and fiscal authorities’ time to recalibrate policy before there is serious overheating. This cycle looks far from normal: Super easy monetary and fiscal policy suggests the fastest business cycle recovery since


Why did Chinese stocks tank?

While global stock markets are still on the march, Chinese bourses have been bashed over the past week in Hong Kong and Shanghai. Given China is the leading indicator for this business cycle, first into and out of the virus, with accompanying stimulus, is this the harbinger for global markets? First up, the correction so


The Chinese economic slowing has resumed

Mizuho: Despite January’s negative inflation rate, we still look for mildly positive inflation for 2021. In this note, we examine a few factors that are likely to impact China’s inflation throughout the year, including CPI’s base effect and revised weights, the pork cycle, consumer confidence, credit growth and the external environment. In detail, the base


Chief spy knew nothing of security breaches, rape under his nose

The filth deepens. Now our chief intelligence officer, Peter Dutton, knew nothing. Via Domain: A special investigations board at the Australian Federal Police discussed the alleged rape of Brittany Higgins on February 11 this year, triggering formal advice to Home Affairs Minister Peter Dutton about her case. The board, chaired by deputy commissioner Ian McCartney,


RBA won’t get angry at Australian dollar 80 cents, it will get even

The RBA has been very explicit about why it has renovated its entire monetary policy framework. Its inflation goals have fallen short for a decade. One major reason why was monetary policy was too tight leading to an overly high Australian dollar. Yesterday at Bloomberg, Westpac’s Sean Callow declared: “The conversation around the Aussie changes


Commodities “super-cycle” turns Wall St ponzi scheme

The post-pandemic environment is deeply irrational. We’ve seen markets crash down and crash up. Autocracies charge into self-defeating abuse of all and sundry. Democracies give up entirely upon accountability. Riots at the Capitol. The “great reset” conspiracy theory. The normalisation of rape in the Australian Parliament House. Entire countries swept by death while others bunker


US flogs the virus

BofA with the lastest charts: The latest update to University of Washington’s IHME Covid-19 model shows dramatic improvement in the trajectory for the US Covid-19 situation between now and the summer. They no longer predict another spike in daily infections due to the more infectious mutated variants, all that remains is a bump–i.e. a March


Credit Suisse upgrade profits boom

Via Credit Suisse, now aligned with Goldman uber-bulls: Raising S&P 500 Target to 4300 on Earnings Upside and Reopening Prospects We are raising our 2021 S&P 500 price target to 4300 from 4200, representing10.9% upside from current levels, and 14.5% for the year. This follows an increase from 4050 on January 7 (seeS&P 500 to


Janet Yellen smashes Bitcoin

US Treasury Secretary, Janet Yellen, weighed in on Bitcoin last night, clearly on the negative side. This is important: It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer. I don’t think that Bitcoin