Nobody can take away from the astonishing success of Hamish Douglass. But we all make mistakes and this was a doozy last weekend, at the AFR: Magellan’s house view is that there is an 80 per cent probability rates stay low for the rest of this cycle, and central banks will be prepared to let
Via Moody’s: Fed Rate Cuts May Fall Short of Stabilizing Markets Markets are trying to “price-in” an event for which there is no readily known precedent. Volatility will rule until COVID-19-related risks reverse course. Since COVID-19 first pressured U.S. equities following January 17’s close, the market value of U.S. common stock as measured by the
The hilarious mispricing of everything continues. According to rates markets there is now a full 11% chance of an RBA cut next tuesday: Are markets, the RBA or both really that stupid? Despite this, the 10 year yield has sunk to all-time lows today: Even so, the curve has been steepening recently which must go
Traffic congestion shows some life: But broader activity is still very subdued: AFR has an ugly anecdote: The struggle Beijing faces in getting China back to work is obvious as soon as you drive out of central Shanghai. The eight-lane motorways are empty. The shopping outlets abandoned, and our taxi glides through rows of unmanned
Economic forecasters are amusingly trying to pay catch-up, via Domain: Mr Morrison said the government was preparing to help the areas of the economy most at risk from the breakdown of supply chains and the absence of tourists and university students. “It’s a health crisis, not a financial crisis. But it’s a health crisis with very
Iron ore prices for February 27, 2020: Breaking down but no panic yet. A few days ago I printed a chart showing huge rebar inventories. Alas the data was lifted from a mis-reporting article in The Australian. Here is the real chart: The pile is still huge when we add mills and traders, assuming Goldman
Markets are starting to come apart and some real weirdness is appearing. DXY got hammered last night as the EUR soared: The Australian dollar took off versus USD but cratered vs EUR: EMs were belted: Despite DXY weakness, gold can’t run on: Oil was drilled again. I think the 2016 is the target: Base metals
Via the AFR: Prime Minister Scott Morrison has moved to get ahead of the coronavirus outbreak being declared a global pandemic and has activated the government’s emergency response plan. The declaration triggered goverment preparations for a more severe virus outbreak and planning to shore up medical stockpiles, supply chains and health resources. The health crisis
The Australian dollar has crawled out of the mire for a bit: But bond yields are right at record low yields and with the RBA getting the shove the AUD may be headed into another scorching: XJO hasn’t yet completed ts double top but it awfully ominous: Iron ore is beginning to break down as
Via FTAlphaville: Amid the border closures and flight cancellations, comes one trip that — were it not for the coronavirus — might never have happened. The money helicopter has arrived. Via the South China Morning Post: Hong Kong permanent residents aged 18 and above will each receive a cash handout of HK$10,000 (US$1,200) in a HK$120 billion
MB Fund Head of Investment, Damien Klassen, pwning Macquarie Private Wealth on ABC The Business last night: According to the silver donut, central banks can cure viruses… Damien Klassen is Head of Investments at the Macrobusiness Fund, which is powered by Nucleus Wealth. The information on this blog contains general information and does not take into
Via the ABC comes Stephen Long with the scoop: The head of Australia’s consumer watchdog has slammed the gas industry, accusing it of misleading governments into approving massive gas export projects that have led to soaring power prices, killing off companies and jobs. “A lot of the things that Australian governments, politicians, were told when
The old enemy is back and thank god for it, via Domain: They left it until the very last minute, and they may not have gone in nearly hard enough. But the Democratic Party’s presidential contenders finally got around to targeting frontrunner Bernie Sanders for his big-spending policies, patchy record on gun control and praise
Via Bloomie: The global credit machine is grinding to a halt. The $2.6 trillion international bond market, where the world’s biggest companies raise money to fund everything from acquisitions to factory upgrades, came to a virtual standstill as the coronavirus spreads fear through company boardrooms. In the U.S., Wall Street banks recorded their third straight
First the Tom Tom stats for the big five: It must remembered that traffic congestion is not a linear indicator. You can take out 20% of cars and cure 100% of traffic. So this rebound is probably a little better than it looks. That said, car numbers are likely to be up given who would
The softening up for the rollback of virus-related border protections rolls on, via AFR: The Morrison government will consider Thursday whether to start easing the travel ban on Chinese students amid warnings by health authorities that the crisis will run for several months more, prompting fears of a recession. …Ahead of Thursday’s meeting of the
Iron ore prices for February 26, 2020: I have no idea if the bid is over. I can only say that sometime soon it very likely will be.
DXY firmed last night: The Australian dollar was universally smashed: Gold was all over: Oil sank: Metals were mixed: Miners fell: EM stocks held on: As junk was bid: Bonds were all bid: Stocks were up and down all session to this point: Westpac has the data wrap: Event Wrap Coronavirus update: markets are now
First, it is the timing of the outbreak. We think it fair to assume that cold has at least some impact on the virus spread: But because it has begun in the north hemisphere winter, it will largely be over there by April/May. That puts the global growth shock in Q2 amd Q3, just when
For 18 months now we have warned that L-plate Treasurer Josh Recessionberg is much more at home on the tennis court than he is at the controls of an economy. Now the consequences of his misshapen economic backhand are clear. The key blunder of Treasurer Recessionberg has been to choke public investment hard during a
Via the excellent Damain Boey at Credit Suisse: We have just received construction work done data for 4Q. Construction investment was well below expectations, falling by 3% over the quarter, but with upward revisions to prior quarter’s data. Year-ended growth fell to -7.4% from -7%. Compositionally, declines were broadly-based across residential, non-residential and engineering categories.
Forshame: That must go down as one of the greatest train robberies of all time.
Here’s the problem. Iran has a reported 95 coronavirus cases with 16 deaths. Countries all around Iran have alos come down with the virus, enough to suggest that of those 95, half have gone elsewhere. Then there is this: Iran’s deputy health minister and an MP have both tested positive for the new coronavirus, as
Presented without comment, a must watch video of our great and powerful friend in action.
Fresh from Beijing: At 04:00 on February 25, 31 provinces (autonomous regions, municipalities) and the Xinjiang Production and Construction Corps reported 406 new confirmed cases, 52 new deaths (52 in Hubei), and 439 new suspected cases. On the same day, 2,422 cases were discharged and cured, 14 573 were close contacts of medical observation, and
Every time there there’s an economic hiccup, the Ross Gittins spruikbot flicks the demand-pumping confidence switch: The human capacity for adaptation – our ability to soon get used to our changed circumstances – is one of our great strengths. It means we can suffer a major misfortune – the death of a spouse, divorce, loss
Via Domain: More than 1.8 million hospital beds could be needed to treat people in an Australian coronavirus outbreak, with the country’s ageing population meaning the virus could hit harder here than it has overseas. In a worst-case scenario, at least 650,000 beds would need to be in the intensive care units of hospitals, according
Via the AFR: The coronavirus could trigger the next financial crisis but the underlying cause will be subprime corporate loans, contrarian investor and chief stock picker for the $19 billion Ariel Investments Rupal Bhansali warns. …”We did not know if the economic shock would come from coronavirus or something else [but] in the worst-case scenario
Capital Economics still looking at April: …we don’t think that the RBA’s concerns about financial stability are an insurmountable hurdle …housing finance commitments have rebounded…consistent with housing credit growth remaining very subdued …we think it may fall to US$0.65 by the end of the year The RBA must cut next week. First, COVID-19 is no
Via AP: A senior member of the International Olympic Committee said Tuesday that if it proves too dangerous to hold the Olympics in Tokyo this summer because of the coronavirus outbreak, organizers are more likely to cancel it altogether than to postpone or move it. Dick Pound, a former Canadian swimming champion who has been
