Global Macro


Australian dollar whacked as Fed hawk rises

DXY lifted last night and is nicely placed for an inverse head and shoulders bottom (which is meaningless unless it happens): AUD was thumped against DMs: And mixed against EMs: Gold was hit: Brent jumped on Kurdish and Iran tensions: Base metals were mixed but copper went stupid: Big miners were strong: EM stocks stalled:


Downtrodden youth must mobilise against intergenerational unfairness

By Leith van Onselen Earlier this month, The Grattan Institute published a report outlining in all its hideous glory how older Australians have gotten wealthy while the young have been left behind: Data from the Australian Bureau of Statistics (ABS) shows that older Australians are capturing an increasing share of the nation’s wealth, and the


Why is Macquarie long the “perpetual leveraging doomsday machine”

Great stuff today from the always entertaining and cross-disciplinary Viktor Shvets at Macquarie: Investors seem to be residing in a world without any notable perceived risks. It is an extraordinary and unprecedented situation, particularly given unresolved issues of over leveraging and associated over capacity as well as profound disruption of business and economic models, which


Does finance benefit society?

Cross-posted from LF Economics: The title of the article comes from a very interesting and hard-hitting paper authored by a leading mainstream economist, Luigi Zingales. He is a professor of entrepreneurship and finance at Chicago University’s School of Business, with impeccable mainstream credentials. The paper in question appeared in The Journal of Finance and can


Would you like a car with those fries?

Bloomberg ran a report last week on electric cars that turned into a longer read than I expected as I chased through some of their numbers that seemed wrong: It’s been 10 years since Apple Inc. unleashed a surge of innovation that upended the mobile phone industry. Electric cars, with a little help from ride-hailing and self-driving technology,


More record highs for stocks

DXY pulled back last night: AUD stabilised versus EMs: But fell against EMs: Gold held: Brent was whacked: Base metals rallied: But not big miners: EM stocks held: High yield is stable: US yields pulled back: European spreads contracted: And US stocks hit more record highs: It’s a pretty normal pullback following Trump tax excitement. There’s


A Bitcoin bet

I have yet to hear reasoned arguments about why Bitcoin should be considered a currency. Nor have the perceived advantages over existing currencies and their settlement systems ever really been properly elucidated. Somehow that does not stop people believing that Bitcoin is a currency. In many cases, people argue that it is even better than


Tax Bitcoin investors like everyone else

Cross-posted from The Conversation: Despite its name, cryptocurrency isn’t just money. It could also be debt or equity and so it should be regulated and taxed in the same way as other finance. The tokens investors get when they buy a cryptocurrency, like Bitcoin, can be used to buy into blockchain startups (businesses that use


China’s cryptocurrency crackdown: a sign of things to come

Cross-posted from The Conversation: The Chinese government’s decision to order several Bitcoin and other cryptocurrencies exchanges to close shows how much of a threat they are perceived to be to financial stability and social order in China. The decision to also ban initial coin offerings altogether (the unregulated means by which funds are raised for


The causes, triggers and timing of the next GFC

Via Deutsche:  This year’s long-term study looks at the frequency of financial crises and shocks through history and speculates as to where the next crises may originate from.  We think that the post Bretton Woods (1971-) global financial system remains vulnerable to financial crises. A simple internet search of financial crises through history


Steve Keen: Soaring global debt risks another GFC

Cross-posted from The Conversation: This phrase may have religious roots, but there is no better way to describe the dominant sect in economics today than as wilfully blind. A decade after the 2007-08 crisis, most still repeat the mantra that it could not have been predicted. Nonsense. The data that showed what would cause the


Australia retains silver medal in global household debt

By Leith van Onselen Australia has again taken the silver medal for having the world’s second most indebted households according to the latest data from the Bank for International Settlements (BIS). The next table shows the ratios of household debt to GDP as at the March quarter of 2017. As you can see, Switzerland (129%)