In the week just ended, Henry had the benefit of a fine talk on implications of very, very low volatility in equity markets. Usually this leads to high volatility but always some folk say 'This time it's different'. I am sorry to report that it never is. Like Tolstoy's unhappy families, the sorrow is often different but the result is not.
From the USA, John Maudlin warns: 'Fed tightening has almost always ended in recession: 17 of the 18 recessions since 1915 were preceded by monetary tightening.
'And history tells us when recessions occur, bad things happen to stock markets. Since 1980, the average market drawdown in recession has been 37%.
'With the Fed now appearing to be on a rate-hiking path—plus the reduction of its $4.4 trillion balance sheet—this bull market’s days may be numbered. I believe this unprecedented “great unwind” may be the trigger point for the next bear market'.
Please see the image of the week below this Blog.
There was joy in the House of Reps last week, at an act to make legal same sex marriage was voted into law, with only 4 'No' votes and a relatively small bunch of abstentions. Weeping, cheering, much hugging and kissing. A wonderful show of Multiple Capital Letter joy.
Sadly the citizenship saga is just warming up. Barnacle Bill Shorten who confidently asserted his team were all clean now has the problem of several members referred to the High Court. Seems BB was not so on top of his party's watertight selection process. Groan!
Despite these significant wins for Malcolm Turnbull, who was 'pumped' at week's end, in the opinion of Des Moore, he is still 'hanging by a thread'. Read Des's update here. Note John Stone's strong recommendation about Turnbull's replacement: the man who Smashed the Labor opposition and won an historic victory in 2013.
Read on here.
While awaiting for relief, perhaps in the form of a General Election or a super Saturday of by-elections, polish up your economic analysis.
'Fixing Overborrowed Economies' would be a good starting point.
Fiona Prior reviews the Belvoir Theatre world premiere of 'Barbara and the Camp Dogs'. More here.
The Sporting Life
No test match, no Rugby, of either variety, and not much AFLM or AFLW news.
The big surprise for the cricket season is Nathan Lyon's bowling, and that catch in the second test. When bowling to left handed batters, Lyon now looks like Shane Warne except no wrong 'un. Get that Nathan and you will join the greatest bowlers in Australian cricket history.
Looks like All Rounder Mitch Marsh will be back to fill the number 6 and Peter Hanscombe will take a backward step.
Nothing much else worth commenting on. Correction, the BBLW set new standards of strength and aggression as the women cricketors take another massive step up. Reminds one of the ladies demanding places on boards, not realising what a boring occupation it mostly is.
Image of the week