Links 4 March 2020

Global Macro / Markets / Investing: Coronavirus shook the foundations of a global stock market powered by debt – ABC The Gig Economy Has Never Been Tested by a Pandemic – The Atlantic U.S. stock short-sellers notch $105 billion week in coronavirus sell-off – Reuters Four Reasons Why the Coronavirus Is Such a Terrifying Economic

Latest posts


Macro Afternoon

The bounce continues although its only a half inflated ball, with Japanese shares lagging and US futures slipping going into tonight’s session. This has all the hallmarks of a dead cat bounce and it must remembered that previous serious market corrections had big swings that were mistaken for recoveries. Gold is still struggling under $1600USD


The dumbening deepens with AAP shutter

The media duopoly will now be able to distort every single story towards happy clappy real estate: The Australian Associated Press will shut down its news wire service on June 26 in an historic development for Australia’s media landscape after its two biggest clients and shareholders decided to pull out. Major shareholders Nine Entertainment Co


McKibbin modelling suggests virus wipeout for Australian economy

Via The Conversation: The COVID-19 coronavirus is spreading across the world. Initially the epicenter was China, with reported cases either in China or in travellers from China. There are now at least four further epicenters: Iran, Italy, Japan and South Korea. Although the World Health Organisation believes the number of cases in China has peaked


Apartment approvals collapse

The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of January. At the national level, the number of dwelling approvals collapsed by a seasonally adjusted 15.3% to 13,016. The overall slump in approvals was driven by units & apartments , which collapsed 35.5%. Over the year, dwelling approvals fell 11.3%,


It’s now the ultimate stock spruik vs the ultimate stock wrecker

With the US plunge protection team in full swing supporting stocks, via Richard Coppelson at Livewire: We saw something extraordinary late Friday in the US- Someone (and I know exactly who it was) came in as a massive buyer of S&P 500 Eminis contracts -worth a huge US$25b was bought right into the close – hence the gigantic +3% rally on


Another $16b needed to fix NBN debacle

The hits keep on coming for Australia’s beleaguered $51 billion National Broadband Network (NBN), with a parliamentary inquiry told that the NBN has put an “artificial handbrake” on fast download speeds, raised the price of accessing the internet, and repeatedly failed to meet its own revenue targets: The latest NBN complaints came at the first


Blackrock: Aussie QE will send interest rates negative

Via Bloomie, bring it on: Prolonged equity losses and monetary easing by the Reserve Bank of Australia can send the nation’s 10-year bond yield into negative terrain for the first time, according to Craig Vardy, head of fixed income for Australia at the world’s biggest money manager. …Quantitative easing may be implemented in the fourth


Australia’s terms-of-trade collapses

Within today’s dump of balance of payments data that feeds into tomorrow’s December quarter national accounts release was the important news that Australia’s terms-of-trade slumped 5.3% in seasonally adjusted terms and by 1.9% in trends terms: Over the year, the terms-of-trade fell by 0.6% in seasonally adjusted terms but rose by 1.6% in trend terms.


Hooocoodanode? Chinese student ban dodger has virus

Via Domain: An international student living in Brisbane has become the seventh person to test positive for coronavirus in Queensland. The 20-year-old man from China is in a stable condition in isolation in the Royal Brisbane and Women’s Hospital. Brisbane Times understands the student has not attended any university classes and his room-mate is undergoing


Don’t expect banks to pass on RBA rate cuts

The Reserve Bank of Australia and the federal government have made it clear that they expect banks to pass on official interest rate cuts in full to borrowers. However, data from RateCity regarding the response of the banks to recent rate cuts suggests that borrowers should be prepared to be disappointed, with the banks likely


CS: Australian GDP to be weak

Via the excellent Damien Boey at Credit Suisse: We now have all the partial indicators we can get our hands on to now-cast 4Q real GDP, covering between 52-90% of GDP. The most recent data points included: Net exports: the contribution to growth was weaker-than-expected, at only 0.1% compared with the Consensus forecast of 0.2%


Australia’s poor productivity is no puzzle

Alan Kohler is the latest commentator that has attempted to solve the puzzle as to why Australia’s productivity has slumped: The Productivity Commission’s annual “Insights” publication, which stated that both labour and multifactor productivity fell for the first time since the mining boom, by 0.2 per cent and 0.4 per cent respectively. It means the


Melbourne property prices soar to record high

It’s official. After rebounding by 12.7% over eight months, Melbourne’s dwelling values have hit record heights, surpassing their former November 2017 peak: The below chart shows the month-by-month changes more closely: Sydney, too, has experienced a strong rebound, with dwelling values up 13.2% over nine months. Indeed, according to CoreLogic, the median house price in


Compulsory superannuation is failing low income Australians

The Grattan Institute has released its submission to the federal government’s Retirement Incomes Review, which explicitly argues that Australia’s system of compulsory superannuation is failing lower-income workers. Grattan also argues that instead of lifting the superannuation guarantee, which would cost the Budget an additional $2 billion a year, the government should instead bolster the Age


Unions: Throw open borders to cheap, sick Chinese workers

With the coronavirus spreading like wildfire, and Australian wages hovering near record lows, the union movement has demanded the federal government open Australia’s borders to temporary Chinese migrant workers: Unions are calling on the federal government to lift the “discriminatory” Chinese travel ban, with some businesses struggling to cope without temporary workers who remain trapped


Consumer confidence crashes anew

Via ANZ: ANZ’s survey of consumer confidence dived 3.2 per cent last week, to a five-and-a-half year low as coronavirus concerns spread across the world. The current economic conditions subindex declined by 16.6pc, the largest since January 2009, as the stock market fell into correction territory. “The fall seen in ‘current economic conditions’ shows that


Why is New Zealand sick of Jacinda Ardern?

In the lead-up to the September 2017 New Zealand general election, Labour promised to reduce immigration by around a third by cutting the numbers of work and student visas: …in recent years our population has been growing rapidly as record numbers of migrants arrive here. This has happened without the Government planning for the impact immigration is


Green shoots in Chinese traffic!

More than green shoots. Normalcy: The rest of the big cities are the same. But public transport remains very subdued: Meanwhile, the number of Metro passengers was also on the rise, with 1.1 million people transported by 9am, 334,000 more than Monday last week, although still 63 percent less than on working Mondays before the


As Morrison unleashes virus, Australia prepares for shut down

Never waste a good crisis. The great Australian virus scab grab has begun with business. At the AFR: Peak business groups have demanded the government use the economic downturn being caused by the coronavirus outbreak to unveil a “significant ” investment incentive in the May budget. The groups elevated their demands for a business investment


Macro Morning

By Chris Becker  Bouncy bounce bounce! Wall Street surges over 5% higher overnight as Asian stocks took the lead yesterday to push risk markets higher after a week or so of carnage. This is partly in response to a coordinated effort by central banks to start easing aggressively to counter the economic slowdown from the