![]() ![]() So tell me how you forecast GDP then, when everything is political? “ We don’t do politics,” an economist once explained to me. What will the reaction be? That’s political too. Within each economy, where will stimulus flow? That’s very political. Who is willing to stimulate? That’s political. Who is able to stimulate? That’s political. So what’s the point in tracking data? Central banks don’t seem to care.Īrguably, the better guide is now structural – which one needs to ‘be political’ to understand. Local gossip is that rather than tightening monetary policy, the RBA is likely to extend its QE bond buying even further, maybe doubling it from AUD50bn to AUD100bn. ![]() I don’t pay attention to those jobs data because they are silly but it seems the RBA don’t either. Unemployment data are back around where they were pre-Covid – the end of the government’s JobKeeper scheme yesterday aside. Large parts of that economy are red hot: there are no yachts, or property with views of yachts, or fancy cars to drive you to your property with a view of yachts to be had house prices are up around 20-30% y/y, anecdotally tradies are minting it like US day-traders when stonks are up that much. ![]() One can forget about following cyclical data too. It’s no guide to who is the fairest of them all. Today is likely to be whippy due to the forced sale of some stocks by Archegos Capital Management fund – but that’s a one-off. ![]()
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