Category Archive: 5) Global Macro

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A dovish Fed could become even more so

2019-06-06

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2019-06-06

Economic momentum has weakened of late, while core inflation has underwhelmed
Trade, inflation expectations and economic data could well spark ‘insurance’ rate cuts by the Fed in the coming months.We now believe that the Federal Reserve (Fed) could deliver two ‘insurance’ rate cuts of 25bps in coming months (up to now, we expected rates to be on hold in 2019-2020). We see three drivers that could dictate the exact timing of these cuts:

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How the D-Day landings shaped the world | The Economist

2019-06-05

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The D-Day landings were the biggest seaborne invasion ever seen. They not only helped to liberate Europe from the Nazis but were instrumental in changing the world order Read more here: https://econ.st/2WfPSUP Click here to subscribe to The Economist on YouTube: https://econ.st/2xvTKdy On June 6th 1944 Allied troops staged the largest seaborne invasion the world …

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A Quiet Revolution Is Brewing

2019-06-05

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2019-06-05

Income Inequality and Political Polarization, 1947-2009
Politics as practiced in a bygone era of stability no longer offers any solutions to these profound disruptions. I recently read a fascinating history of the social, political and economic context of the American Revolution: The Radicalism of the American Revolution by Gordon Wood.

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Monthly Macro Monitor: Economic Reports

2019-06-04

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2019-06-04

Is recession coming? Well, yeah, of course, it is but whether it is now, six months from now or 2 years from now or even longer is impossible to say right now. Our Jeff Snider has been dutifully documenting all the negativity reflected in the bond and money markets and he is certainly right that things are not moving in the right direction.

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What Kind Of Risks/Mess Are We Looking At?

2019-06-04

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2019-06-04

Money Markets Equivalents, 2007-2008
The fact that the mainstream isn’t taking this all very seriously isn’t anything new. But how serious are things really? That’s pretty much the only question anyone should be asking. What are the curves telling us about what’s now just over the horizon?

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This could change the way cancer is treated | The Economist

2019-06-01

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A combination of drugs, including aspirin and statins, are being tested to treat cancer and other illnesses. There is mounting clinical evidence that the “repurposing” of existing drugs could offer effective new treatments. Read more here: https://econ.st/2WgHlpz Click here to subscribe to The Economist on YouTube: https://econ.st/2xvTKdy Right now we’d like to take a few …

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More What’s Behind Yield Curve: Now Two Straight Negative Quarters For Corporate Profit

2019-06-01

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2019-06-01

Profits Revisions, 2010-2019
The Bureau of Economic Analysis (BEA) piled on more bad news to the otherwise pleasing GDP headline for the first quarter. In its first revision to the preliminary estimate, the government agency said output advanced just a little less than first thought. This wasn’t actually the substance of their message.

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Why Being a Politician Is No Longer Fun

2019-05-31

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2019-05-31

Income Inequality and Political Polarization, 1947-2007
As a society, we are ill-prepared for the end of "politics is the solution." It's fun to be a politician when there's plenty of tax revenues and borrowed money to distribute, and when the goodies get bipartisan support. An economy that's expanding all household incomes more or less equally is fun, fun, fun for politicians because more household income generates more income tax revenues and more spending that generates other taxes.

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Europe Comes Apart, And That’s Before #4

2019-05-30

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2019-05-30

EU Pew Survey Overall
In May 2018, the European Parliament found that it was incredibly popular. Commissioning what it calls the Eurobarameter survey, the EU’s governing body said that two-thirds of Europeans inside the bloc believed that membership had benefited their own countries. It was the highest showing since 1983. Voters in May 2019 don’t appear to have agreed with last year’s survey.

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America v China: a new kind of cold war | The Economist

2019-05-29

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America and China are fighting over far more than trade. If this growing rivalry is managed badly, everybody will lose. Read more here: https://econ.st/2YTgtsH Click here to subscribe to The Economist on YouTube: https://econ.st/2xvTKdy The dispute between the United States and China is about much more than trade. For everything from blockbuster films to lunar …

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Lesson of the S-Curve: Doing More of What’s Failed Will Fail Spectacularly

2019-05-29

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2019-05-29

S-curve of Rapid Expansion, Stagnation and Decline
I often refer to the S-Curve because Nature so often tracks this curve of ignition, rapid expansion, stagnation and decline. One lesson of the S-Curve is that the human bias to keep doing more of what worked so well in the past leads to doing more of what failed even as results turn negative.

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Forget “Money”: What Will Matter Are Water, Energy, Soil and Food–and a Shared National Purpose

2019-05-27

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2019-05-27

World exports corn
If you want to identify tomorrow's superpowers, overlay maps of fresh water, energy, grain/cereal surpluses and arable land. The status quo measures wealth with "money," but "money" is not what's valuable. "Money" (in quotes because the global economy operates on intrinsically valueless fiat currencies being "money") is wealth only if it can purchase what's actually valuable.

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China’s Insurmountable Global Weakness: Its Currency

2019-05-25

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2019-05-25

US Dollar's Share of Global Payments, Loans and Reserves
If China wants superpower status, it will have to issue its currency in size and let the global FX market discover its price. Quick history quiz: in all of recorded history, how many superpowers pegged their currency to the currency of a rival superpower? Put another way: how many superpowers have made their own currency dependent on another superpower's currency?

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How sea cucumbers can help the ocean | The Economist

2019-05-24

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Sea cucumbers are a prized aphrodisiac in China. But like many coastal species they have been chronically overfished. One remote community in Madagascar has started a pioneering coastal-farming project with astonishing results. Click here to subscribe to The Economist on YouTube: https://econ.st/2xvTKdy The ocean is facing environmental catastrophe. Overfishing is a ticking time bomb for …

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Technology Is Not Just Disruptive, It’s Disastrously Deflationary

2019-05-24

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2019-05-24

Technologies by proportion of companies likely to adopt them by 2022
Deflation eats credit-dependent, mass-consumption economies alive from the inside. While AI (artificial intelligence) garners the headlines, the next wave of disruptive technologies extend far beyond AI: as the chart of technologies rapidly being adopted shows, this wave includes new materials and processes as well as the "usual suspects" of machine learning, natural language processing, data mining and so on.

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The Transitory Story, I Repeat, The Transitory Story

2019-05-24

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2019-05-24

Money Markets Equivalents, 2017-2019
Understand what the word “transitory” truly means in this context. It is no different than Ben Bernanke saying, essentially, subprime is contained. To the Fed Chairman in early 2007, this one little corner of the mortgage market in an otherwise booming economy was a transitory blip that booming economy would easily withstand. Just eight days before Bernanke would testify confidently before Congress, the FOMC had met to discuss their lying eyes....

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Charles Hugh Smith on the U.S.-China Trade War

2019-05-24

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Click here for the full transcript: http://financialrepressionauthority.com/2019/05/23/the-roundtable-insight-charles-hugh-smith-on-the-u-s-china-trade-war/

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Proposed Negative Rates Really Expose The Bond Market’s Appreciation For What Is Nothing More Than Magic Number Theory

2019-05-23

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2019-05-23

The Real GDP Problem 1988-2018
By far, the biggest problem in Economics is that it has no sense of itself. There are no self-correction mechanisms embedded within the discipline to make it disciplined. Without having any objective goals from which to measure, the goal is itself. Nobel Prize winning economist Ronald Coase talked about this deficiency in his Nobel Lecture:

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Weakening Japanese momentum behind strong GDP figures

2019-05-23

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2019-05-23

Growth in Japanese Real GDP, 2012-2019
Japan’s latest GDP report reveals some notable weakness in the economy despite the strong headline figures.The preliminary reading of Japanese GDP for Q1 shows that the economy grew by 2.1% q-o-q annualised, beating the consensus forecast of -0.2%.However, behind the strong headline figures, details of the GDP report reveal some broad-based weakening in momentum.Declining corporate capex and sluggish household consumption both drag on domestic...

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Why India’s election has stoked conflict | The Economist

2019-05-22

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India’s prime minister, Narendra Modi, has galvanised voters with an appeal to Hindu nationalism. But rising Hindu-Muslim violence is putting India’s historic secularism at risk. Read more here: https://econ.st/2M3ApHC Click here to subscribe to The Economist on YouTube: https://econ.st/2xvTKdy India, the world’s biggest democracy. 29 states, seven territories, 900m voters and one age-old fault line …

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