have just taken a short position using BBOZ at 8.60.
what worries me the most about these economic data prints is that they are overstating the real state of the global economy at present. IMO the only reason why we are seeing better than expected print is due to a backlog of activity resuming. i don't really see future demand being stoked by natural forces, only central bank and government action. what worries me also is how people will be spending all of this stimulus. will they be saving it or splashing out? obviously the gov knows that they will just splash it out as the average person has zero clue about financial management. what happens when jobkeeper stops? surely to think that this will be a permanent thing is beyond ludicrous. with the RBA calling for an extension of JK, i think that underscores the fragility of australias economy right now. the even more grim picture could come out of china as they begin to experience the economic backlash of negative sentiment against chinese manufacturing. this capacity will be taken elsewhere and as those supply chains shift, the economy will realise exactly how dependent it is to chinas supply chains. what happens with reduced capacity and lower demand? underutilisation of global workforces and high unemployment, decreasing productivity, along side potential inflationary pressures with all of this printed money chasing what could be less goods to be produced as demand and supply rebalances.
we are in unprecedented times and something tells me that the market will have to wake up to this. i personally see an opportunity to continue accumulating some short positions here. pity that BBOZ is not necessarily the best instrument- note we are about ~15% lower than the asx200 high, where BBOZ low is round 8.03. the spread these people take and the way they get their commissions by manipulating this spread in their favor is ridiculous, but what does a retail pleb like my self do?
i personally think that this whole financial system collapse as a result of the virus IMO has been one, if not the biggest, corporate heists in history. the discounts at which a ton of companies raised capital are just an indication about how flawed the system really is and at how much of a disadvantage all of us retail plebs are in. the back drop of increased shares and lower EPS will kick in eventually, as these valuations will fail to justify their price.
i cant complain completely though as im up probably around 60% over the last 3 months, but i cant help to feel sorry for people buying and holding the bag while the banking and private gangsters use their dark pools and interconnected webs to make deals with each other and pat themselves on the back.
also its not to say that this market rally has not been justified, because it has. the amount of liquidity released and government action makes it so. and its been a good thing not only for markets but for controlling civil unrest.
not sure what predictions could be accurate to make at this stage but when one really looks at whats happened, its hard not to be very nervous the higher markets climb. but then, the market can remain irrational for longer than you can be solvent so who knows.
good luck to all and hope you are all making decent returns.
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