Lucky? Australia is pre-Thatcher Britain: Economist... The Australian economy visited

Morning,

 

Always a risk letting a journalist express your views, but I think AFR's Philip Baker did a good job for me. Australia is back in total denial. Rates is going up, there seems to have been a magic moment where Australia must have done some reforms, reduced their horrible terms of trade, their trade unions and found the magic? It seems to be a rising housing market supported by the relatively dangerous systemic risk of letting SUPER FUNDS buy investment properties.

 

Let me stress: I love Australia! It's one of my favorite trips of the year. The Australians are open, engaging and extremely hospitable.

 

The new government seems willing to reign in some of the excess, even getting into fight with unions, but right now, the Australian capital market is dead certain RBA will hike once or twice, the AUDUSD going to parity, and that world is in recovery…… well like in Europe(and EURO @ 1.4000) if the AUDUSD does go to 1.000 then both the recovery and rate hike will be off and Australia close to the first recession in decades.

 

I found Australia so 2007/08 – no one wants to invest in anything but equities………I love equities but not the present risk reward of 5-10% upside vs. 25/30% downside, but……..hope is what dreams are made of.

 

My take:

 

RBA will not hike – cutting cycle will end in 1.75/2.00 .

AUD will see 0.95/.96 but then head down to 0.8000

AUS growth will be 2.25% max for the year.

 

Safe travels,

 

Steen

 

This email may contain confidential and/or privileged information.
If you are not the intended recipient (or have received this email
by mistake), please notify the sender immediately and destroy this
email. Any unauthorised copying, disclosure or distribution of the
material in this email is strictly prohibited.

Email transmission security and error-free status cannot be guaranteed
as information could be intercepted, corrupted, destroyed, delayed,
incomplete, or contain viruses. The sender therefore does not accept
liability for any errors or omissions in the contents of this message
which may arise as a result of email transmission.