US PMIs surprise markets; US Treasury yields leap; Taiwan's data stays impressive; India data improves; Indonesia holds; Australian PMIs retreat; UST 10yr at 5.13%; gold falls but oil firms; NZ$1 = 56.7 USc; TWI-5 = 60.4

That makes complete sense too. The coalition cancelled the Ferries and Light Rail, so if the left get in they would have every right to cancel this project, and it would just waste taxpayer money. 

It's the right call, but they're still not getting my vote

He said signing a contract before the election would be "irresponsible."

Not often i agree with the twerker.

As ever the question is if everyone wants to sell who is going to buy?

How do people reckon the Western world would react to Iran making the same threats to Israel. Would the media just let it wash over like they do with Trump.

Great post Colin, spot on.  It's just spectacular how simple minded Trump is.

Prof. Sachs weighs in withnJudgeNap at ~7:00 - he is visibly in a state of shock after seeing Trump's performance at UNGA.

https://www.youtube.com/watch?v=fMpS-sbebdY

"Trump yesterday hev is going to have the difficult choice of whether to annihilate, BTW, one of the most ancient civilisations in the world, 5000 years old,twenty times older than the US. And what did our Speaker of the House say, well he said nothing, of course - what did our Senate Majority Leader say, of course nothing - what did all of the party of the POTUS say, the members of congress, they said of course nothing.

This is worse than the Roman Empire, there was a Senate that still said something - our Senate says nothing.

Judge, we are so broken, that not only do we have a madman in power, but there is no respect for our constitutional order, and the President can make a statement, as he madev yesterday, unprecedented in the chamber of the General Assembly, in front of the world leaders, speaking like the worst tyrant, or gangster imaginable, and not a murmur from the Republican party, which dominates The House, and The Senate...." 

Yes,  Yvil, I raised my eyebrows too.

Five Percent Growth — Seriously?

I have to say that S&P Global's claim, that its latest PMI reading points to US economic growth of “around 5%” annualised, strikes me as completely detached from the economy underneath the headline statistics.

Let's be clear about what is actually being measured here. A PMI is a survey-based diffusion index asking businesses whether various conditions are improving, unchanged or deteriorating. It doesn't measure the quantity of additional productive output being created, and it certainly doesn't measure whether the average American is becoming 5% better off.

The 5% figure is therefore not measured GDP growth at all. It is an inference derived from the historical relationship between S&P's survey readings and headline GDP, and that distinction matters enormously in today's increasingly peculiar US economy.

The latest official Q2 estimate showed real GDP growing at only 1.5% annualised, while the gross-domestic-purchases price index rose at 5.8% and PCE prices at 5.3%. In other words, there is an enormous difference between expanding nominal dollar activity and increasing the quantity of real goods and services those dollars can actually purchase.

Then there is employment. Headline payroll numbers tell us very little by themselves about labour-force participation, hours worked, multiple job-holding, the quality and productivity of newly created jobs, or whether employment is migrating towards genuinely productive activity rather than another layer of government, healthcare, financial or administrative services.

And then we arrive at my favourite elephant wandering around the American statistical living room - PGDP.

Headline happy-clappy GDP incorporates vast quantities of government expenditure, financial intermediation, healthcare rents, property-related activity and other services. Whatever their usefulness, adding another dollar of such activity isn't economically equivalent to producing another dollar of machinery, energy, food, infrastructure, technology or exportable manufactured goods with which a country can ultimately service its enormous accumulated liabilities.

That distinction becomes critical when discussing an economy carrying tens of trillions of dollars of sovereign debt, persistent external deficits and a deeply negative international investment position - so I wouldn't claim that the PMI itself is somehow fraudulent. It may be perfectly accurately reporting what the surveyed businesses told S&P.

What I would question rather more vigorously is the enormous conceptual leap from...

“More purchasing managers report improving business conditions”

to:

“The US economy is growing at around 5% annualised.”

Those are not remotely the same proposition.

Perhaps the American economy really is suddenly roaring ahead at something approaching 5%, but before celebrating another miraculous US economic boom, I'd like to see that reflected in real purchasing power, productive output, household prosperity, external accounts and the national balance sheet - rather than inferred from a diffusion index whose historical relationship with headline GDP may tell us increasingly little about the underlying productive economy.

Is the economy booming at 5% - or is this just this very unreliable indicator?