Clifford

AUS200 8425.    11 December 2024
We did very well to go immediately short again yesterday. And it continues to look very heavy indeed. You could probably even sell more today.

 

Good morning,

The RBA is behind the curve by a big margin, as is standard practice. I suspect the margin is in the order of 12 months. 

Yesterday, as we have been saying had to happen, the RBA finally moved to a more neutral stance. In order to support the economy however, it should probably have already cut rates for the fourth time yesterday. Their high school economics approach of being data driven is a function of the Peter Principle at work. This institutionalises always being late to do anything. Up or down.

It means the normal ebbs and flows of the economy become an exaggerated roller-coaster affair. This is why I am such an avid critic of this defunct organisation and advocate for fundamental change of the institution itself. 

This is important from a market perspective, because we have to understand the RBA will be too late to save the economy or the market. Too late, means rate cuts make no difference to the psyche of businesses and the population at that point, and therefore recessions can become entrenched and elongated as a result.

Leaving us with no choice, but to yell warnings from the rooftops to protect your well built portfolios.
Everyone is vulnerable in a significant down-turn period.

Clifford Bennett