• Clifford Bennett, Chief Economist at ACY


• 30.11.2021 05:00 pm
#stocks

WHO declares Omi "Very High Risk".

Rally on new information. Now sell.

Quick question, why are our politicians constantly saying Australia is best in the world at everything?

Something is going off the rails in this country.

Oh, you already noticed!

WSJ story. Link: https://www.wsj.com/articles/workers-quit-jobs-in-droves-to-become-their-own-bosses-11638199199?mod=hp_lead_pos5

Good morning,

The above trend is huge in the USA, and encompasses the on-going relocation from cities to regional centres as well as low job claims despite there being 3 million less employed.

Do these people know how hard their shift to their own business will be? Did they all sign up for a Facebook or Amazon sales course get rich quick scheme and base their livelihoods on this? Do they understand nearly all of them will fail?

When you get everyone trying to sell to everyone without anyone doing the actual building and work, then you can get into trouble as an economy.

This is what has been happening for sometime now in the Old First World of the USA, Europe, Canada and Australia. Though the later two have the benefit of also being a part of the New First World in that they provide raw materials/agriculture to the New First World of Asia.

The Old First World is characterised by low profit margins, high taxation and compliance costs. Very difficult to compete with the New First World situation of high profit margins, lower taxation and compliance issues.

This is why Donald Trump's dramatic corporate tax changes were so important and played a major role in the strength of the US economy in the pre-Covid years. Those tax changes went a long way to levelling the playing field for US companies vis a vis Asia and South America. Removal of that levelling force would prove extremely problematic for the competitiveness and health of the US economy long term.

That very talented people are leaving employment is in many ways admirable, but they most likely do so a little wishfully. Good luck to each and every one of them. This is what laissez-faire economics is all about. The individual opportunity. Further down the track though, the new wave of USA entrepreneurs is likely to face some difficulty.

All you need to know today;

The World Health Organisation says the Omicron Covid variant poses a “very high” global risk.

It will be 10-14 days for research to conclude either way, but Omni shows signs of being vaccine resistant capable.

The stock market is about right now, after Friday’s panic, and is a fresh sell again. The bargain hunters should be exhausted within the next few hours or so.

The Federal Reserve and RBA will be further delayed tortoises, using Omni as a cover story for their damaging delay in acting on inflation.

Meanwhile, inflation will get even worse.

Global travel will not be normal for another year. Sorry.

Stocks fundamentally belong in a bear market. Which is what it looks like what we are getting.

The caveat on my sell-the-rally view, we were bearish before Omni, is that ridiculous rally in OmniCrypto? This is either a sign that the world is still willing to buy any thing at any price, or is yet another signal that these markets are simply crazy?

Watch Video: https://youtu.be/lwUbTo2Bg1k

Dallas Fed Texas Manufacturing softened.

US Pending Home Sales jumped again, this is likely a part of the on-going migration out of cities.