David Llewellyn-Smith


Moody’s: Fed powerless against COVID-19

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 Chinese economy is barely moving still

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


Welcome to the COVID-19 Financial Crisis (CFC)

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


Morrison steps back from suicidal border opening…for a week

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


Helicopters drop money on virus zombie economies

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


ABC TV: MB Fund vs Macquarie on coronavirus fallout

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


ACCC: Gas cartel lied to Australia and must pay

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


Bernie Sanders is the saviour of capitalism

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


It begins. Global credit market freezes on virus

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


Chinese activity lifts a little

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


80% of Australians agree Chinese travel ban must remain

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


CS: Australian GDP already recessionary

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.


China coronavirus body count down to “5”

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


Wall St fundie: Aussie property, banks in path of virus

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


Five reasons the RBA must cut next week

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


IOC: Olympics may be cancelled

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