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sydneyguy

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03/12/19

15:57

Post #: 41772580
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Originally posted by sydneyguy ↑

who knows

yesterday there was a truckload of analysts saying China data better than expected and rates were rising to reflect that. JOM put out a chart of global PMI's which was matched with 10 year USD rates saying stabilisation and its the bottom.

I found that chart absurd as the left side showed global PMIs all falling and rates rising.

Anyhooooo, 25BLN again last night lent for 6 weeks in the overnight repo market along with demand for 75BLN fed cash overnight. I posted the monster rise of weekly failures to settle in the all important banking repo market yesterday, with such huge defaults amongst banks in the overnight repo market, fed action to provide cash its little wonder rates are rising to reflect the risk.

As for equities, average PE of S and P 500 or here in oz are through the roof - at some stage they have to revert to the mean (you know which historically is considerably lower.

PMI's in some places have improved but remain in contraction, China data much better but NOV there is always a move up for xmas and main figure was for state owned enterprises, so Id expect China to have them back over producing.

Technology Food company Woolies is no long pushing 40 bucks and paying 2.2% at 13.5 times book , opps I digress.

No idea mate really, I just think everything just gets to a point with free money pumped in that they take it.

Obviously if rates keep cranking, equities theme of low rates allowing for absurd PB and PE ratios / multiple expansion will come down hard.

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Ps rates my also be rising because of rumours of fiscal spending. Yesterday there was reports of ABE and the gang looking to do a 90BLN US package

he is no inflation (but Bloomberg may be misreporting) today they are talking 299BLN

On each occasion that Europe talked about fiscal cash splashes on projects, rates jumped bigtime.

Of course if they do start splashing and lining up projects left right and centre, well, there will be no inflation
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