Amusing bonds price in rate hikes

Because that’s how good the global and Australian recovery will be in 2020. Bonds have just about completed pricing the first rate hike: This is largely being driven by global steepening as stocks run wild: But is has also been the result of local bonds selling faster than US, narrowing the spread: A few checks

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God condemns SmoCo

God is condemning SmoCo this morning, via Domain: Church leaders are using their annual Christmas messages and sermons to intensify pressure on Prime Minister Scott Morrison to take greater action on climate change, backing striking school students and fire-affected citizens in calling for increased efforts to tackle global warming. In a video message to be


What did Clive Palmer buy for $80m election spend

Via The Australian: Billionaire Clive Palmer spent more than $80m on his fruitless bid for political power while fighting numerous legal battles, establishing a shipbuilding business in Singapore and exploring for rare earth metals in New Zealand. The revelations of Mr Palmer’s spending spree and business ­activities is contained in the latest financial accounts for


Another big developer bites the dust

Via AFR: Melbourne builder Verve Construction has joined apartment developers Ralan and Steller and and national building supplier SWC as a big property development casualty of 2019. The Abbotsford-based company, owned by Robert Magdziarz, kept a relatively low profile but was undertaking several big apartment projects across Melbourne this year. Adam Nikitins and Stewart McCallum


Macro Morning

By Chris Becker  Stocks advanced on both sides of the Atlantic, as thinner volumes and macro concerns are waved away as the Santa Claus rally continued apace. The latest US durable goods orders slumped unexpectedly, which sent the USD down slightly, while gold finally found some life as commodities were flat. Looking at the action


MB Fund Podcast: China’s stealth war, with General Robert Spalding

If there’s one of our episodes you watch this year, make it this one. Senior Whitehouse & Pentagon advisor and Air Force General Robert Spalding joined us to discuss his publication “Stealth War” This episode features huge China revelations with implications for not only Investments, but moral opposition to China. Revelations include malicious influence in


Links 24 December 2019

  Global Macro / Markets / Investing: Harvard’s Larry Summers : We are facing backlash against globalism. We pushed hard on trade deals but we barely cared about labor protection deals or environment protection deals. The willingness of people to be intimidated into supporting cosmopolitan outcomes appears to have been exhausted. – FT The economics


Macro Afternoon

With most markets here in Asia in light volume mode, there’s been a bit of downside volatility that’s not unexpected going into the Christmas period. The PBOC increased the Yuan fix well above the 7.01 handle and offshore trading has followed in kind, while Bitcoin has jumped higher from the weekend gap – now up


The bubble in stocks

Via Alliance Bernstein: The Politics of “Tariffs” & The Fed The Trump administration used the hammer of tariffs to negotiate a bi-lateral trade agreement with China, but in doing so also influenced a change in domestic monetary policy.  The tariff-led negotiations were part of Trump’s team trade strategy, but were the tariffs also a tool to


Urban wrecking ball, Lucy Turnbull, swings again

She is the human wrecking ball for the former Eden turned smoking crater called Sydney: Greater Sydney Commission boss Lucy Turnbull has warned governments must avoid the mistakes of Green Square and Leppington in a massive redevelopment of Parramatta and Olympic Park over the coming decade. The commission has developed a draft “Place-based Infrastructure Compact”


Fellow Hawaiian tourist slams SmoCo

Via News: A tourist who took a picture of the Prime Minister relaxing on his Christmas break — after he told media he’d rush back to Australia as quickly as he could — said he approached Mr Morrison. The tourist told 10 News he asked Mr Morrison whether was going home to “resolve the bushfire


“Worst” Santa for retail since whenever

So say Domain: Australian retailers look set to be battered by one of their worst Christmas seasons since the global financial crisis, as consumers shift away from traditional gifts to experiences and donations. Plunging consumer confidence and $25 billion worth of tax cuts have done little to send people back to the shops, but bricks


Dismal economists for a depressed economy

Via the ABC: This year was one many would like to forget when it comes to Australia’s economy. Economic growth slowed as households used extra income from tax and interest rate cuts to bolster savings and pay down debt, rather than spend. The unemployment rate was stubbornly above the Reserve Bank’s updated target of 4.5 per cent


China’s daisy chain default disaster

Via Zero Hedge: Just days after China’s “moment of reckoning” in the dollar bond market arrived, when China was rocked by not only the biggest dollar bond default in two decades but also the first default by a massive state-owned commodities trader and Global 500 company, when Tianjin’s Tewoo Group announced the results of its “unprecedented” debt


Macro Morning

By Chris Becker  Wall Street continued the Santa rally with the fourth straight record high week with confidence surrounding the US/China trade deal builds. European stocks also rose as the BOE kept rates on hold in its first post election meeting, while oil prices finally fell back after a stellar run. Looking at the action


SmoCo sneaks home amid the ashes of his government

There are moments in politics when everything that has come before is crystalised in a moment. Malcolm Turnbull branded himself a phony when he leapt into bed with the Coalition’s right wing. Tony Abbott captured himself when he recommended Prince Phillip be offered an Australian knighthood. Before him, John Howard made himself a political legend


Australian dollar to rise further

DXY was up strongly Friday night as EUR sank: The Australian dollar jumped anyway versus DMs: And EMs: Surprisingly, net positioning on the CFTC moved more short last week to -46k contracts, though the trend is clearly towards more neutral: Gold held on: Brent fell as the US rig count jumped. The market does not


MacroBusiness Links – 23 December, 2019

Bushrangers, 1957-1963, Albert Tucker, Art Gallery of NSW   Markets & Macro Pensions and intra-generational equity: A proposed solution – VoxEU Economic causes of populism: Important, marginally important, or important on the margin – VoxEU Lessons from the China-US trade truce – Bruegel The WTO is dead: long live the WTO? – Bruegel Dollar Is


Weekend Links: December 21-22, 2019

Drought Skeleton, 1953, Sidney Nolan, Art Gallery of NSW   Asia & China Mysterious Bags of Cash Trigger Major Hong Kong Protest Arrests – Bloomberg Did Xi surrender to Trump? China struggles to silence chatter – Nikkei Asian Review China’s hidden debt risks economic ‘chain reaction’ – Nikkei Asian Review China’s tech companies have had


MB Fund November Performance: International boom!

November was a stark reminder of the power of narrative in driving returns. World stock markets rose almost 5%, but earnings broadly were downgraded. Our portfolios handily beat all benchmarks over the quarter as our exposure to international stocks offset our large cash holdings. We have been trying to keep enough exposure to international stocks


Macro Afternoon

Asian markets had a mixed end to the trading week with no real advances across the region despite the usual record highs on Wall Street. The Shanghai Composite was falling going into the close, barely above the long held 3000 point resistance level, while the Hang Seng Index is putting in a scratch session to


Sydney smoke chokes tourism

Reuters reports that Chinese tourism was always set to slide this year: China’s aviation regulator said on Thursday it expected a decline in airline capacity and bookings to the United States and Australia over the Lunar New Year period for the first time in nearly four years due to a shift in tourist destinations. Japan,


Demise of the MDA accelerates

Another blow for institutional use of Managed Discretionary Accounts (MDA) this week as AMP forfeits its ability to offer MDA’s through their adviser network, as they were unable to meet ASIC’s increasing requirements. ASIC has been on a warpath for MDA providers for a couple of years now (here and here) as it continues to