CBA joins ACY on recession forecasts
We are the first to say it.
While AMP and Citi have talked about the risk of a recession, they have yet to catch up.
For some time now, this was, to use an economic term, an “easy task.” Why there were headlines that Australia was out of recession on the basis of positive Q2 data we will never know. it always had to be positive, and in the same way, the way out of isolation will always be much longer than the politicians or any of us would like. The reason we continually highlight the problem of hospitalizations is because of its absolute impact on restrictions and how quickly they can be lifted. Unfortunately, at present, our domestic economic performance depends on political decision-making on these issues. It won’t be as easy as vaccinations, fix everything.
Even the major American media have begun to point out to Israel what the entire world may well expect. That is, the diminishing effectiveness of vaccinations. It may still be the case that the third booster shots last longer than the first two shots for 2-4 months. It would be fantastic. However, we just don’t know yet, because the third launch vehicles are only occurring in Israel, and sometimes elsewhere, just now. The Delta variant continues to show itself as a fairly staunch opponent. Time will show.
What we know for sure is that two doses of the vaccine are not working the way we would like.
For New South Wales, and then possibly for Victoria, breaking out of isolation is urgently needed at all levels. In particular, to reduce psychological pressure. We must rebuild our economies and schools, but doing so with a heightened false belief in the effectiveness of vaccines is setting ourselves up to return to where we were recently. Locking again. I cannot imagine anything more devastating to people and the economy than the resumption of quarantine in 6-9 months. That’s where Israel and the United States are. There probably won’t be any Lockdowns, but they’ve been talked about again.
The key point in today’s comments is to emphasize that coming out of isolation by relying on vaccination levels before we even reach peak hospitalization rates is an extremely dangerous approach.
AU $ 200 is in danger of dropping to 7,000, even 6,900.
The American markets are indeed showing signs of tension and this will not help the Aussie. See Commentary US500. As we become aware of a very real and potentially prolonged recession, it is growing.
S&P 500 that creaks before the branch bursts
This is only a modest move down, but the way it follows the struggling rally after Jackson Hole is worrying. Significant concern.
It is worth noting that the current bout of weakness is based on concerns about the impact of the Delta Option. While in Australia the market wanted to rally, were local funds buying despite the influence of Delta and even most of the economy, which is in strict isolation?
As highlighted yesterday, when will the penny fall? Perhaps starting today.
Bitcoin, which has become El Salvador’s legal tender, says more about the country than cryptocurrency.
What is a very common aspect of markets throughout history is that they can sometimes peak on the latest good news. El Salvador is Bitcoin. This is not exactly a badge of honor, and also highlights the value of cryptocurrency transactions. Be 5% in El Salvador. Imagine going to a car dealership, it will be X bitcoins, the large spread is already included, and on top of that, there is a 5% commission. By the way, this afternoon the price may change by 10 or 20%. Welcome to the world of cryptocurrency. Maybe a car accident.
Hopefully the market can recover from the immediate sell-off, but it’s worth keeping an eye on.
ZEW economic sentiment index in Germany continues to fall
The Delta Impact is a growing global phenomenon.
It is not a transient state of affairs.
As governments around the world begin to flood markets with bond sales and raise taxes to pay for the recent massive stimulus and spending, inflation is quietly fading into the background. Negative. Not at all.
I just “look out the window” at what is really going on. Highlighting the benefits of well-planned hedging strategies if the situation continues to deteriorate.
Identifying the stronger side of any economic downturn or asset downturn is the ideal platform for genuine wealth creation.