Houses and Holes

9

Australian dollar forecast 2022

The US dollar was weak on Friday night as EUR bounced: But Australian dollar was weak anyway: Oil is firming as OMICRON hints at the end of COVID19: Base metals were firm over Xmas but not copper: Big miners are getting very excited for no reason: As EM stocks go the other way: Trailing EM

1

Wall Street gets more bullish and more bearish

Volatility in the Wall Street houses is rising as it is on markets. Most are still bullish on good growth and margins. Goldman is typical: The recent ‘risk-off’ in markets has come alongside sharp unwinds of bullish investor positioning: our aggregate sentiment measure has fallen below the 50thpercentile for the first time since the Coronacrisis

2

China’s new pattern of stimulus excludes iron ore

Welcome to the new post-iron ore Chinese stimulus pattern. There’ll be some stimulus for infrastructure but it is smaller than property and less steel-intensive plus the property adjustment will keep a lid on it via weak land sales. TSLombard with the note: Beijing is shifting gears, moving from marginal easing to broader stimulus measures. As

0

Stay long King Dollar

Nordea with the note: The Fed is about to signal that it needs to accelerate its tapering process, but market pricing could still become more aggressive. The ECB will move more slowly. The Chinese authorities have also become more worried about the growth outlook. Christmas is a mere two weeks away, but the holiday mood

3

Chinese property bust deteriorates

As markets celebrate the bankruptcy of Evergrande as a reason to buy all the things, under the bonnet the Chinese property bust is getting worse, not better. Sales by floor area are as bad as at any time this year in the past week and the forthcoming holiday sales super-season is shaping as a writeoff:

47

Liberal faithful fight Morrison’s cult of sectarian sleaze

The ongoing grassroots Coalition mutiny over the collapse of party standards is reaching fatal proportions. Leading us off is Malcolm Turnbull who’s critique of his former party is clear-eyed: Former PM Malcolm Turnbull has voiced his concerns that the rule of law is “under threat” in Australia, claiming parliamentarians have enabled an “normalisation of lies”

9

Beware the bullwhip effect

FtAlphaville with the note: We all know how panic buying works. Terrified that your local Tesco is about to shut its doors before you can secure enough toilet paper to get through lockdown, you and others buy reams of the stuff, leaving shelves empty. But what about the impact this has on the toilet roll

0

Stay long King Dollar

Credit Suisse in the club: Global markets have traded on a more stable footing this week so far, recovering from the sharp weakness of the past fortnight, when fresh uncertainty around the newly emergedOmicron variant drove a rapid pullback in market sentiment, triggering particularly steep losses in US technology stocks, crude oil and crypto assets.

1

Nordea: US CPI to boom

Nordea has done a great job on this so it worth listening to: Despite November’s slowdown in hiring, with only 210K new non-farm payrolls, less than half of consensus, the November unemployment rate dropped to 4.2%, down from 4.6% in October. Federal Reserve Bank of St. Louis estimates the 2021Q4 NAIRU to be 4.45%. NAIRU stands

8

Evergrande goes bust. What next?

ZeroHedge has a great summary of where we are at as Evergrande goes bust: This is the way Evergrande ends: not with a bang but a whimper. Three months after an initial shockwave of fear that China’s largest and most indebted property developer was set to default, roiled global markets only to see the company

40

Gladys rejects “evil bully” Liar

It’s the least that Gladys could do: “I’m grateful to have served the public in the way that I did. I tried hard every day. And I hope people feel I made a difference.” “I won’t be contesting the seat of Warringah or any other federal seat for that matter. I’m looking forward to much

3

Chinese credit rebound fizzles

China’s new yuan loans for November were out last night and were weaker than expected by the market but spot on for me. Total social financing was 2.6tr yuan: That was up 12% year on year and the 3MMA flopped into the positive: M2 pulled back to 8.5% The flow of new loans was down

1

China’s great deflation begins

Chinese producer inflation was zero in November and fell to 12.9% over the year: The components are beginning to reverse with a little recent inflation in value-added segments as basic material inputs begin to deflate: There’s not too much to worry about there so long as China keeps the heat on coal and iron ore

5

Which countries will OMICRON hit hardest?

Goldman with the note: 1. The early medical news on Omicron looks broadly consistent with the “downside” scenario we laid outa week ago, but better than the “severe downside” scenario. On the negative side, the effective rate of spread in South Africa is much higher forOmicron than for Delta, which suggests greater inherent transmissibility and/or

24

China’s soft reply to Olympic ban a clear danger

Where have all the wolf warriors gone? Here’s the Chinese embassy’s weak-kneed response to the Australian Olympic boycott: The Chinese Embassy in Australia noticed that today the Australian side announced that its officials wouldn’t attend the Beijing Winter Olympics, and also noticed that Australian Olympic Committee President shared information on Australian athletes’ participation in the Beijing Winter Olympics not long

7

Hawkish Fed swoops upon young, unskilled, poor sheilas

I was reading through some fascinating US wage data yesterday when it became apparent the current frenzied market attack on an imminent wage-push inflation breakout is a kangaroo short in the top paddock. Check out these charts. The only US demographic enjoying anything above modest pay rises is youth: They are unskilled: Uneducated: Poor: Sheilas:

0

Goldman on China stimmies

Lot’s more deterioration for Chinese developers yesterday but nothing game-changing so let’s stick with the analysis. Goldman has been too bullish throughout the adjustment and still is, in my view. There has never been an RRR loosening cycle without prime rate cuts as well. So I agree that CNY is at risk and commodity prices

118

Liar has brought low a great politcal party

The Liberal Party of Australia was once a great institution. It protected solid centrist values, individualism and markets. It has long been a bastion of small business and middle classes. But today it is brought low in a manner that is causing despair among its party faithful. Everywhere is a growing mutiny. We see business,

2

Australian dollar flies as market sniffs a delaying Fed

DXY was down and EUR up overnight: To infinity and beyond! Everything anti-DXY up: Except EM junk: Treasury curve steepened: Stocks led by GAMMA: Westpac: Event Wrap Bank of Canada kept its policy rate at 0.25%, matching widespread expectations. Officials reiterated that the “economy continues to require considerable monetary policy support.” As such, they remain committed

30

Crypto as intergenerational war

There’s debate around the Barefoot Investor that makes for interesting reading: Money expert Scott Pape, who is better known as the Barefoot Investor, has hit back at claims that he is “costing his followers” a fortune by not backing cryptocurrency. He has been accused of “embarrassing” himself and sticking his “head in the sand” when