David Llewellyn-Smith


US property boomlet to pop

BofA with the note: The economy is facing an imbalance: a burst in demand has been met with constrained supply. Economics 101 tells us that when the demand curve shifts more than the supply curve, prices will rise, which continues until the balance is restored from a combination of slowing demand and greater supply. This


Chinese local governments set to storm debt markets?

Readers will recall that there has been something a mystery in some components of the very steep slowdown in Chinese debt issuance over the last four months. Most pointedly, local government borrowing, which accounts for a lot of infrastructure and property investment, cratered 80% year on year in the four months to April despite having


Canada to open to vaccinated tourists

As Morrison’s Prison Island falls ever further behind in the vaccine race, the northern hemisphere is beginning to open up to tourism. Europe is preparing to launch vaccine passports. Domestic US tourism is exploding higher. Now Canada is leading the reopening of borders to the vaccinated: Wokester Justin Trudeau is considering easier border controls. The


What’s the best asset hedge in the world?

Economically speaking, Australians are very fortunate people. We are also some of the most ignorant. These truisms are played out superbly in the least understood yet most important feature of Australian markets. What’s the best asset hedge in the world? This, via BNP Our analysis has two stages: a historical assessment of the most reliable


Morgan Stanley: Stocks to tank 15%

Morgan Stabley bearing it up: Over the past few weeks, we’ve been spending a lot of time with investors discussing and debating our mid-year outlook. Here are the highlights: First,investors are definitely more receptive to the mid-cycle transition narrative that we introduced a few months ago. There’s an acknowledgement that something has changed in the


Why you should never invest in China

I have been warning of this for nearly a decade as I watched various Australian investment legends blow themselves up in China, including Kerr Neilsen and Hamish Douglass. Investing into China is foolish for one simple reason: the sovereign risk is off the chart. This is not an academic measure of risk. Nor is it


US travel roars back to normal

Some interesting sector-level trends in US credit card spending. Services spending is normalising swiftly as reopening gathers pace. There are early signs that goods spending is falling away as well: Eating out is now up on pre-pandemic levels. Travel is roaring back to almost unchanged from 2019. I expect a big overshoot ahead. Interestingly, goods


No more ghost cities for China

TS Lombard with the note After leading the recovery last year, real estate investment is set to decelerate under macro and sector-specific deleveraging campaigns as well as higher input costs. We expect property investment to reach 5% yoy in H2/21 from13% you in April. The slowdown will hit local government financing and investment. The combined


US inflation how high for how long?

Nordea with the note. I see US inflation tumbling next year: We see clear risks of a big positive surprise to the May inflation report as well with core inflation around or just above 4%. The market is still buying the transitory inflation narrative but for how long? Lately, increasing (US) inflation has been the


Can a wolf warrior change his spots?

Not according to  Bill Bishop at Sinocism: Comment: David Bandurski of the China Media Project has written an excellent article on the Politburo’s collective study session on global discourse power and the wishful thinking in some quick takes about a change in tone/halt of “wolf-warriorism”. He provides good background on the discussant, Fudan University professor


Elderly, disabled shot up with Morrison vaccine lies

Bernard Keane at Crikey: The “Commonwealth remit” for the vaccination rollout, to use the term employed by the Department of Health, consists of four groups: aged care residents, aged care workers, disability care residents and disability care workers. Those groups formed the bulk of what the government in its vaccination rollout strategy called “Phase 1a”. The remainder


It’s not easy being the anti-China “tip of the spear”

Back in 2018 when MB readers understood clearly where the Australia/China relationship was heading even as the rest of the nation did not, Donald Trump confidante Steve Bannon summarised the US view succinctly: Donald Trump’s former chief strategist Steve Bannon has criticised Australia’s approach to an aggressive China, labelling it weak and saving his most


China’s stupid trade war delivers itself another shock

The China trade war on Australia is not going at all well. Iron ore is trading on a vast geopolitical premium. Damaged commodity trade flows have been redirected to other nations with a minimum of fuss. Australia’s current account surplus has skyrocketed to records. Based on outcomes so far, it’s the best thing to ever


Deutsche: US stimulus most extreme of all time

Deutsche with the note: Since the last CoTD, Bloomberg’s US financial conditions index has eased to fresh14-plus year highs. This index looks at money markets, various credit spreads and equity markets. However Bloomberg also compiles a financial conditions “plus” index where they include indicators of asset-price bubbles incorporating tech shares, housing markets and additional yield