17 Dec 2021

It has certainly been the year of the SPAC, but not from a performance point of view. A SPAC is a special purpose acquisition company and is often used as vehicle to prepare a company for an IPO. In the bubble era we are in there is no shortage of capital available for crazy deals. The valuation of which struggles to maintain under the scrutiny of a broader public glare.

I think these two polar opposite views sum things up at the moment. I should add Josh Frydenberg is a politician who is currently addicted to spending so it’s quite easy to understand where he is coming from.

The BOE raised rates unexpectedly yesterday causing markets to spike in all directions.

Before the Bank of England raised rates, the RBA governor Dr Lowe still expected the overnight cash rate to remain at the record low 0.1%until at least 2023. He had this to say and I quote, “The condition for an increase in the cash rate will not be met next year. It is likely to take time for that condition to be met and the board is prepared to be patient.”

“The economy is so much stronger. I was here at the Fed when we lifted [rates] last time and the economy is so much stronger now. So much closer to full employment, inflation is running well above target and growth is well above potential,” Mr Powell the Fed governor said yesterday.

One of the RBA’s 3 main criteria for decision making is observing what other Central Banks are doing. I wonder if Lowe is wishing he gave his speech a few days later.

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