Category Archive: 5) Global Macro

What will people wear in the future? | The Economist

Innovation in fashion is sparking radical change. In the future clothes could be computers, made with materials designed and grown in a lab. Click here to subscribe to The Economist on YouTube: https://econ.st/2xvTKdy A new wave of innovation is fuelling a radical change in fashion. Wearable technology, data, automation and lab-grown materials will have a …

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You Know It’s Coming

After a horrible December and a rough start to the year, as if manna from Heaven the clouds parted and everything seemed good again. Not 2019 this was early February 2015. If there was a birth date for Janet Yellen’s “transitory” canard it surely came within this window. It didn’t matter that currencies had crashed and oil, too, or that central banks had been drawn into the fray in very unexpected ways.

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If You’ve Lost The ISM…

These transition periods are often just this sort of whirlwind. One day the economy looks awful, the next impervious to any downside. Today, it has been the latter with the BLS providing the warm comfort of headline payrolls. For now, it won’t matter how hollow.

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How democratic is your country? | The Economist

Democracy is in danger around the world. Perhaps for this reason, political engagement is at an all-time high. Robert Guest, our foreign editor, examines this year’s Democracy Index, compiled by the Economist Intelligence Unit. Find out where your country ranks on the Democracy Index: http://www.eiu.com/topic/democracy-index https://www.economist.com/graphic-detail/2019/01/08/the-retreat-of-global-democracy-stopped-in-2018 Click here to...

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Living In The Present

It’s that time of year again, time to cast the runes, consult the iChing, shake the Magic Eight Ball and read the tea leaves. What will happen in 2019? Will it be as bad as 2018 when positive returns were hard to come by, as rare as affordable health care or Miami Dolphin playoff games? Will China’s economy succumb to the pressure of US tariffs and make a deal?

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Could Stocks Rally Even as Parts of the Economy Are Recessionary?

It's not yet clear that the stock market swoon is predictive or merely a panic attack triggered by a loss of meds. We contrarians can't help it: when the herd is bullish, we start looking for a reversal. When the herd turns bearish, we also start looking for a reversal.

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More Unmixed Signals

China’s National Bureau of Statistics (NBS) reports that the country’s official manufacturing PMI in December 2018 dropped below 50 for the first time since the summer of 2016. Many if not most associate a number in the 40’s with contraction. While that may or not be the case, what’s more important is the quite well-established direction.

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Mispriced Delusion

Recency bias is one thing. Back in late 2006/early 2007 when the eurodollar futures curve inverted, for example, it was a textbook case of mass delusion. All the schoolbooks and Economics classes had said that it couldn’t happen; not that it wasn’t likely, it wasn’t even a possibility. A full-scale financial meltdown was at the time literally inconceivable in orthodox thinking.

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Hedge Funds, ETFs, Central Banks Suffer Billions In Losses On Apple

It wasn't that long ago that Apple was the most beloved stock by the hedge fund community, and although in recent months the company's popularity faded somewhat among the 2 and 20 crowd it is still one of the most popular names among the professional investing community. Which on a day that saw AAPL stock tumble as much as 10% is clearly bad news.

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Nothing To See Here, It’s Just Everything

The politics of oil are complicated, to say the least. There’s any number of important players, from OPEC to North American shale to sanctions. Relating to that last one, the US government has sought to impose serious restrictions upon the Iranian regime. Choking off a major piece of that country’s revenue, and source for dollars, has been a stated US goal.

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Insane Repo Reminds Us

It was only near the quarter end, that’s what made it so unnerving. We may have become used to these calendar bottlenecks over the years, but they still remind us what they are. Late October 2012 was a little different, though. On October 29, the GC repo rate for UST collateral (DTCC) surged to 52.6 bps. The money market floor, so to speak, was zero at the time and IOER (the joke) 25 bps. We also have to keep in mind the circumstances of that...

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Where to invest in 2019? | The Economist

Where should you look to invest in 2019? Our capital-markets editor John O’Sullivan suggests the best strategy for the year ahead. Click here to subscribe to The Economist on YouTube: https://econ.st/2xvTKdy For more from Economist Films visit: http://films.economist.com/ Check out The Economist’s full video catalogue: http://econ.st/20IehQk Like The Economist on Facebook: https://www.facebook.com/TheEconomist/ Follow The Economist …...

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The Crisis of 2025

This is the predictable path because it's the only one that's politically expedient and doesn't cause much financial pain until it's too late to stave off collapse. While many fear a war between the nuclear powers or the breakdown of civil order, I tend to think the Crisis of 2023-26 is more likely to be financial in nature.

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What will be the biggest stories of 2019? | Part Two | The Economist

Augmented-reality surgery, moon landings and a battle for the soul of Europe will be major talking points in the year ahead. But what else will make our countdown for the top ten stories for 2019? Click here to subscribe to The Economist on YouTube: https://econ.st/2xvTKdy What will be the biggest stories of the year ahead? …

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A Couple of Thoughts on 2019

The story of the 21st century is debt is soaring while earned income is stagnating for the bottom 95%. Best wishes to all my readers and correspondents for a safe, healthy and productive 2019. Thank you, longstanding supporters, for renewing your financial support at the new year without any pathetic begging on my part. (The pathetic begging will commence shortly.)

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Chart of the Week: The Dreaded Full Frown

I’m going to break my personal convention and use the bulk of the colors in the eurodollar futures spectrum, not just the single EDM’s (June) contained within each. The current front month is January 2019, and its quoted price as I write this is 97.2475. The EDH (March) 2019 contract trades at 97.29 currently and it will drop off the board on March 18.

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The Crisis of Capital

The undeniable reality of the 21st century economy is that capital has gained while labor has stagnated. While various critics quibbled about his methodology, Thomas Piketty's core finding--that capital expanded faster than GDP and wages/salaries (i.e. earned income from labor)--is visible in these charts.

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Wasting the Middle: Obsessing Over Exits

What was the difference between Bear Stearns and Lehman Brothers? Well, for one thing Lehman’s failure wasn’t a singular event. In the heady days of September 2008, authorities working for any number of initialism agencies were busy trying to put out fires seemingly everywhere. Lehman had to compete with an AIG as well as a Wachovia, already preceded by a Fannie and a Freddie.

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What will be the biggest stories of 2019? | Part One | The Economist

Power suits, robotaxis, Leonardo da Vinci mania—just a few of the things to look out for in 2019. But what else will make our top ten stories for the year ahead? Click here to subscribe to The Economist on YouTube: https://econ.st/2xvTKdy What will be the biggest stories of the year ahead? 00:35 – 10 – …

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The net result is capital is impaired in eras of uncertainty.

The net result is capital is impaired in eras of uncertainty. As we look ahead to 2019, what can we be certain of? Maybe your list is long, but mine has only one item: certainty is fraying. Confidence in financial policies intended to eliminate recessions is fraying, confidence in political processes that are supposed to actually solve problems rather than make them worse is fraying, confidence in the objectivity of the corporate media is fraying,...

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