David Llewellyn-Smith

63

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

42

Morrison leads Aussie politics into the filth

Wholesale degeneration is now unleashed in Aussie politics. Prime Minster Scott Morrison’s rape protection racket is leading it. The Guardian: A former candidate for the Greens party has alleged Frank Zumbo, an office manager for the former Liberal MP Craig Kelly, behaved inappropriately towards her when she was a teenager, saying she felt compelled to speak

17

The tech bust is here

Two investing legends – Ray Dalio and Jeremy Grantham – have recently put different cases for why parts of the technology component of stock markets are in a bubble vulnerable to steep correction. Grantham argued that the extreme valuations in growth stocks and the pervasiveness of crazy behaviour were dead giveaways that a bust was

4

Ray Dalio: Are stocks in a bubble?

Bridgewater doyen, Ray Dalio, takes on the quadrillion dollar question today. Are stocks in a bubble? He breaks it down via series of measures that breaks out a cohort of “bubble stocks” while the broader market is only expensive. This looks to me like Mr Dalio is arguing that we have K-shaped bubble, if you

15

Why the RBA will NOT hike rates before 2024

Markets are today busily repricing the prospects for interest rate rises around the world. This is being driven by the vaccine-led post-COVID recovery, ongoing monetary and fiscal stimulus and rising supply-side inflation associated with bottlenecks and runaway demand for goods while services are suppressed by lack of mobility. Yesterday TD Securities argued that the RBA

1

Fitch retains negative outlook on Australian AAA

Via Fitch: Fitch Ratings has affirmed Australia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘AAA’ with a Negative Outlook. KEY RATING DRIVERS Australia’s rating reflects its strong institutions and effective policy framework, which supported nearly three decades of economic growth prior to the coronavirus pandemic and helped limit the severity of the current shock. The

16

China’s mass human migration…cancelled

Mizuho: ◼ Usually, it takes two to three weeks for China’s industrial production to recover to full capacity post a lunar new year (LNY) holiday as rural migrant workers return to the city. However, such a recovery is expected to arrive earlier this year as many workers spent the holiday in the city due to

122

Morrison buries rape allegations under mountain of bull

Crikey wraps it nicely: Former Liberal staffer Chelsey Potter has written an op-ed at InDailyaccusing federal Finance Minister Simon Birmingham of not meeting with her either before or after she went public with allegations of sexual assault by a colleague. InDailyfurther explains that Birmingham, who was not told of the allegations while Potter worked in his office, has confirmed he declined to

15

Australian dollar tears roof off with global yields

Readers will know that we have been expecting a scary steepening of the bond curve. The reasons are clear. The global vaccine recovery has begun. Central banks have nailed short-end yields to the floor. Fiscal stimulus is booming. There are short-term inflation pressures in the global inventory rebuild and production bottlenecks. Energy prices are surging. 

161

Westpac: House prices to boom for years

Bill Evans at Westpac: The housing market upturn that emerged in the third quarter last year has strengthened and broadened materially through year-end with all aspects now showing strong gains. Turnover is up 25% over the year, prices nationally are pushing above their pre-COVID levels, dwelling approvals surged 22% in the final quarter of 2020,

9

Ruined Aussie politics arrives at the OECD

I have noted many times over the past year why the OECD would be bonkers to promote former Australian Finance Minister, Matthias Corman, to secretary-general. The two reasons are straightforward. Cormann’s record of voting on climate change is abysmal and he played a key role in destroying Australia’s world-leading carbon price. Second, economically, Cormann is

2

Chinese yuan rising (again)!

For those who are sceptical that China is on the verge of delivering a threat to the USD with the world’s new reserve currency, today marks another cynical day. There is new excitement at Bloomberg for CNY as its daily turnover rises: The article notes that the driver is the carry trade into higher Chinese

1

Evil Anna: Banks to remain easy on distressed loans

Via Banking Day: Australian Banking Association chief Anna Bligh has given a commitment that her organisation’s members will continue to provide support to customers affected by the pandemic when the current loan deferral arrangements end next month. The ABA said banks were working directly with customers in hardship to work out an appropriate outcome. Bligh

41

Life is grim in Antiameristan

There is a country without official recognition to whom it is time we gave diplomatic credentials. Antiameristan has a small population in Ultimo, Sydney. But its views and identity are strongly formed enough to merit full sovereignty. The nation of Antiameristan takes its name from its lifetime dictator, Stan Grant, who appeared at the ABC

13

US economy boom builds

Readers will know that we have a very bullish outlook for the economic recovery this year. Indeed, we see the US at Chinese-style growth rates for the next year before coming off. The reasons for this are: An ongoing global inventory cycle in goods production that has American wholesalers and retailers short of stock. A

9

JPM on why Bitcoin will go to $146k, halve, or both

JPM: The virus crisis, by boosting money supply as well as demand for an “alternative” currency, has supported both gold and bitcoin over the past year. The older cohort preferred gold, while the younger cohorts preferred Bitcoin as an “alternative” currency. Both gold and bitcoin investment vehicles have experienced strong inflows over the past year,

5

Newspoll: Labor firms

A new Newspoll is out taken from last Monday through Wednesday. It shows that Labor is trending higher in its primary vote: Two-party preferred remains a dead heat: Extraordinarily, voters appear to blame Albo for the rape controversy as ScoMo jumped to a record-high approval rating and Albo dumped: Labor is clearly strengthening in trend

98

Bitcoin has killed gold (for now)

In a crazy world, the rational is irrational and the irrational rational. That is how I would describe the state of play in the gold versus Bitcoin debate with the latest installment coming from Doubleline doyen Jeffrey Gundlach: I am a long term dollar bear and gold bull but have been neutral on both for

3

Stocks to buy as yields rise

The bond back-up continued in the US overnight and caused some dyspepsia for stocks. JPM has more on where this leads: As bond yields have moved up, there has been a general focus on whether this will 1) become a problem for the broader market, due to elevated multiples and 2) whether it will continue

7

The Australian dollar is already topping out

As noted yesterday, the Australian dollar is suddenly caught between the thermal of reflation and commodity prices versus the wind shear of rising US bond yields and inflation. Last night saw more of the same as risk markets were hit but key commodity prices, especially iron ore, rose. MUFG has more on inflation and yields: