Category Archive: 5) Global Macro

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Fails Swarms Are Just One Part

2019-12-08

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2019-12-08

US Treasury, 2010-2019
There it was sticking out like a sore thumb right in the middle of what should have been the glory year. Everything seemed to be going just right for once, success so close you could almost feel it. Well, “they” could. The year was 2014 and the unemployment rate in the US was tumbling, the result of the “best jobs market in decades.” Real GDP in that year’s two middle quarters was pretty near 5% in both.

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All Signs Of More Slack

2019-12-07

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2019-12-07

PCE Chain-type Price Index, 2009-2019
The evidence continues to pile up for increasing slack in the US economy. While that doesn’t necessarily mean there is a recession looming, it sure doesn’t help in that regard. Besides, more slack after ten years of it is the real story. The Federal Reserve’s favorite inflation measure in October 2019 stood at 1.31%, matching February for the lowest in several years.

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More Signals Of The Downturn, Globally Synchronized

2019-12-07

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2019-12-07

US Imports of Goods, NSA 1989-2019
For US importers, October is their month. And it makes perfect sense how it would be. With the Christmas season about to kick into full swing each and every November, the time for retailers to stock up in hearty anticipation is in the weeks beforehand. The goods, a good many future Christmas presents, find themselves in transit from all over the world during the month of October.

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Costs Are Spiraling Out of Control

2019-12-06

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2019-12-06

Wages aren't keeping up
And how do we pay for these spiraling out of control costs? By borrowing more, of course. If we had to choose one "big picture" reason why the vast majority of households are losing ground, it would be: the costs of essentials are spiraling out of control. I've often covered the dynamics of stagnating income for the bottom 90%, and real-world inflation, i.e. a decline in purchasing power.

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Consistent Trade War Inconsistency Hides The Consistent Trend

2019-12-05

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2019-12-05

Private Non Residential Construction Spending, 2011-2019
You can see the pattern, a weathervane of sorts in its own right. Not for how the economy is actually going, mind you, more along the lines of how it is being perceived from the high-level perspective. The green light for “trade wars” in the first place was what Janet Yellen and Jay Powell had said about the economy.

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The Risen (euro)Dollar

2019-12-05

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2019-12-05

India Real GDP, 1997-2019
Back in April, while she was quietly jockeying to make sure her name was placed at the top of the list to succeed Mario Draghi at the ECB, Christine Lagarde detoured into the topic of central bank independence. At a joint press conference held with the Governor of the Reserve Bank of South Africa, Lesetja Kganyago, as the Managing Director of the IMF Lagarde was asked specifically about President Trump’s habit of tweeting disdain in the direction...

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How America politicised abortion | The Economist

2019-12-04

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More Americans than ever before say that their vote in the 2020 presidential election will hinge on abortion. Abortion has deepened the polarisation between Republicans and Democrats—and the widening divide is putting abortion rights in jeopardy. Read more here: https://econ.st/2ONtRfC Click here to subscribe to The Economist on YouTube: https://econ.st/2xvTKdy Political parties in America have …

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Crunchtime: When Events Outrun Plan B

2019-12-04

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2019-12-04

Not only will events outrun Plan B, they'll also outrun Plans C and D. We all know what Plan B is: our pre-planned response to the emergence of risk. Plan B is for risks that can be anticipated, regular but unpredictable events such tornadoes, earthquakes, hurricanes, etc. In the human sphere, risks that can be anticipated include temporary loss of a job, stock market down turns, recession, disruption of energy supplies, etc.

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Dollar Soft on Weak Data and the Return of Tariff Man

2019-12-03

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2019-12-03

The dollar has taken a hit from the weaker than expected data Monday. Tariff man is back. The US economy remains solid in Q4 but there are some worrying signs for the November jobs data Friday. The political pressure on Turkey from the US could increase soon; South Africa’s Q3 GDP came in well below expectations at -0.6% q/q and 0.1% y/y.

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EM Preview for the Week Ahead

2019-12-02

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2019-12-02

Over the weekend, China reported stronger than expected November PMI readings while Korea reported weaker than expected November trade data.  While the China data is welcome, we put more weight on Korea trade numbers, which typically serve as a good bellwether for the entire region.  Press reports suggest the Phase One trade deal has stalled due to Hong Kong legislation passed by the US Congress.

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Could America Survive a Truth Commission?

2019-12-02

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2019-12-02

A nation that's no longer capable of naming names and reporting what actually happened richly deserves an economic and political collapse to match its moral collapse. You've probably heard of the Truth Commissions held in disastrously corrupt and oppressive regimes after the sociopath/kleptocrat Oligarchs are deposed. 

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A China Trade Deal Just Finalizes the Divorce

2019-12-01

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2019-12-01

China Share of World Exports, 2000-2018
Each party will continue to extract whatever benefits they can from the other, but the leaving is already well underway. Beneath the euphoric hoopla of a trade deal with China is the cold reality that the divorce has already happened and any trade deal just signs the decree. The divorce of China and the U.S. was mutual; each had used up whatever benefits the tense marriage had offered, and each is looking forward to no longer being dependent on the...

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Nothing Good From A Chinese Industrial Recession

2019-11-30

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2019-11-30

China Industry, 2001-2019
October 2017 continues to show up as the most crucial month across a wide range of global economic data. In the mainstream telling, it should have been a very good thing, a hugely positive inflection. That was the time of true inflation hysteria around the globe, though it was always presented as a rationally-determined base case rather than the unsupported madness it really was.

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How migration could make the world richer | The Economist

2019-11-29

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Many of the recent political shifts in the West—the election of Donald Trump, the rise of populism in Europe and Brexit—can be partially attributed to the fear of mass migration. Yet increasing migration is one of the quickest ways to make the world richer. Click here to subscribe to The Economist on YouTube: https://econ.st/2xvTKdy For …

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The Big One, The Smoking Gun

2019-11-29

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2019-11-29

Potential Real GDP, 2005-2019
It wasn’t just the unemployment rate which was one of the key reasons why Economists and central bankers (redundant) felt confident enough to inspire 2017’s inflation hysteria. There was actually another piece to it, a bigger piece potentially complimentary and corroborative bit of conjecture. I write “conjecture” because despite how all this is presented in the media there’s very little precision to any of it.

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We Can Only Choose One: Our National Economy or Globalization

2019-11-28

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2019-11-28

The World Economy
The servitude of society to a globalized economy is generating extremes of insecurity, powerlessness and inequality. Does our economy serve our society, or does our society serve our economy, and by extension, those few who extract most of the economic benefits? It's a question worth asking, as beneath the political churn around the globe, the issues raised by this question are driving the frustration and anger that's manifesting in social and...

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How to get migration right | The Economist

2019-11-27

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Governments need to find better ways of managing migration. Greater freedom of movement could make the world richer, but voters need convincing. Here’s how to do it. Read more here: https://econ.st/35Cs1nw Read The Economist special report here: https://econ.st/2Dlih59 Click here to subscribe to The Economist on YouTube: https://econ.st/2xvTKdy For more from Economist Films visit: http://films.economist.com/ …

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Charles Hugh Smith on why Eastern Europe may be the Go To Place

2019-11-27

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Charles Hugh Smith on why Eastern Europe may be the Go To Place Click here for the full transcript: http://financialrepressionauthority.com/2019/11/27/the-roundtable-insight-charles-hugh-smith-on-why-eastern-europe-may-be-the-go-to-place/

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China’s Financial Stability: A Squeeze and a Strangle

2019-11-27

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2019-11-27

PBOC Balance Sheet, 2006-2019
I do get a big kick out of the way Communists over in China announce how they are dealing with their enormous problems especially as they may be getting worse. Each month, for example, the country’s National Bureau of Statistics (NBS) will publish figures on retail sales or industrial production at record lows but in the opening paragraphs the text will be full of praise for how the economy is being handled.

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Dollar Builds on Recent Gains

2019-11-26

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2019-11-26

The dollar remains resilient; optimism towards a Phase One deal continues to support risk appetite. There was also optimism from Fed Chairman Powell yesterday; the US economy is not out of the woods yet. Turkish President Erdogan started deploying Russia’s S-400 missile system, raising the specter of sanctions. Hong Kong reported weak October trade data; Philippine central bank Governor Diokno said a December cut was possible.

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