Category Archive: 5) Global Macro

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GDP Is Bogus: Here’s Why

2017-10-22

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2017-10-22

US Real GDP, 1940 - 2017
The rot eating away at our society and economy is typically papered over with bogus statistics that "prove" everything's getting better every day in every way. The prime "proof" of rising prosperity is the Gross Domestic Product (GDP), which never fails to loft higher, with the rare excepts being Spots of Bother (recessions) that never last more than a quarter or two.

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Fraud, Exploitation and Collusion: America’s Pharmaceutical Industry

2017-10-22

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2017-10-22

The rot within manifested by the pharmaceutical industry almost defies description.The theme this week is The Rot Within. America's Pharmaceutical industry takes pride of place in this week's theme of The Rot Within, as the industry has raised fraud, exploitation and collusion to systemic perfection. What other industry can routinely kill hundreds of thousands of Americans and suffer no blowback? Only recently has the toll of needless deaths from...

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Distinct Lack of Good Faith, Part ??

2017-10-21

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2017-10-21

European Growth Baseline, Jan 1995 - 2017
It was a busy weekend in retrospect, starting with Janet Yellen and other central bankers uncomfortably facing a global media that has become (for once) increasingly unconvinced. Reporters, really, don’t have much choice. The Federal Reserve Chairman might not be aware of just how much she has used the “transitory” qualifier since 2015, but others can’t be helped from noticing.

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Donald Trump asks for advice from Xi Jinping | The Economist

2017-10-20

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Donald Trump asks for help from China’s leader, Xi Jinping, in this week’s Economist cartoon from Kal. Peer inside the mind of our political cartoonist as he conjures up a dragon for the 19th China national congress. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 One of Kal’s favourite things to draw is …

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Broader Slowing in Industrial Production

2017-10-20

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2017-10-20

US Industrial Production, Jan 1995 - Jul 2017
Industrial Production rose 1.6% year-over-year in September 2017. That’s up from 1.2% growth in August, both months perhaps affected to some degree by hurricanes. The lack of growth and momentum, however, clearly predated the storms. The seasonally-adjusted index for IP peaked in April 2017, and has been lower ever since. This pattern, the disappointment this year is one we see replicated nearly everywhere on both sides (supply as well as demand)...

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Global Inflation Continues To Underwhelm

2017-10-19

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2017-10-19

Another Side of China, Aug 2016 - Oct 2017
Chinese producer prices accelerated in September 2017, while consumer price increases slowed. The National Bureau of Statistics reported this weekend that China’s PPI was up 6.9% year-over-year, a quicker pace than the 6.3% estimated for August and a 5.5% rate in July. Earlier in the year producer prices were driven mostly by 2016’s oil rebound, along with those in the rest of the global economy, but in recent months there has been more influence...

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Electric cars will come of age in 2018 | The Economist

2017-10-18

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Electric cars will come of age in 2018. For the first time they will compete in price and performance with petrol and diesel cars. But in the year ahead we will also be confronted with some uncomfortable truths about going electric. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 2018 is set to …

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China Exports/Imports: Enforcing A Global Speed Limit

2017-10-18

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2017-10-18

China Imports, Jan 2008 - Jul 2017
Chinese imports rose 18.7% in September 2017 year-over-year. That’s up from 13.5% growth in August. While near-20% expansion sounds good if not exhilarating, it isn’t materially different from 13.5% or 8% for that matter. In addition, Chinese trade statistics tend to vary month to month.

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The Fading Scent of the American Dream

2017-10-18

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2017-10-18

US Household Income, 1980 - 2014
The theme this week is The Rot Within. It's been 10 years since I devoted a week to the theme of The Rot Within (September 17, 2007). Back in 2007, I listed 16 systemic sources of rot in our society, politics and economy; none have been fixed. Instead, the gaping holes have been filled with Play-Do and hastily painted to create the illusion of shiny solidity.

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Xi Jinping, China’s president, is the world’s most powerful man | The Economist

2017-10-17

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Is Xi Jinping the world’s most powerful man? The world’s balance of power is shifting. For the past five years president Xi Jinping, China’s leader, has ruled with an iron fist and has been pursing a new model of great power relations. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Xi Jinping rules …

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About Those “Hedonic Adjustments” to Inflation: Ignoring the Systemic Decline in Quality, Utility, Durability and Service

2017-10-17

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2017-10-17

Airplane seats
The quality, durability, utility and enjoyment-of-use of our products and services has been plummeting for years. One of the more mysterious aspects of the official inflation rate is the hedonic quality adjustments that the Bureau of Labor Statistics makes to the components of the Consumer Price Index (CPI). The basic idea is that when innovations improve the utility (and pleasure derived from) a product, the price is adjusted to reflect this...

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US Retail Sales: Retail Storms

2017-10-17

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2017-10-17

US Retail Sales, Jun 2011 - Aug 2017
Retail sales were added in September 2017 due to the hurricanes in Texas and Florida (and the other states less directly impacted). On a monthly, seasonally-adjusted basis, retail sales were up a sharp 1.7% from August. The vast majority of the gain, however, was in the shock jump in gasoline prices. Retail sales at gasoline stations rose nearly 6% month-over-month, so excluding those sales retail sales elsewhere gained a far more modest 0.6%.

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Emerging Markets: Preview of the Week Ahead

2017-10-16

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2017-10-16

EM FX closed the week on a firm note, as softer than expected US CPI data weighed on the dollar. We continue to believe that investors are underestimating the Fed’s tightening potential. Meanwhile, idiosyncratic political risk remains high for MXN, TRY, and ZAR.

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Migration of the Tax Donkeys

2017-10-16

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2017-10-16

Donkey
Dear local leadership: here's the formula for long-term success. A Great Migration of the Tax Donkeys is underway, still very much under the radar of the mainstream media and conventional economists. If you are confident no such migration of those who pay the bulk of the taxes could ever occur, please consider the long-term ramifications of these two articles.

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“Clinch Mountain Backstep” // Caleb Lawhorn and Jeffrey Snider

2017-10-15

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A little Sunday afternoon pickin.’ Thanks for watching!

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US CPI: Inflation Still Isn’t About Inflation

2017-10-15

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2017-10-15

US Consumer Price Index, Jan 2016 - Sep 2017
The US Consumer Price Index (CPI) rose back above 2% in September 2017 for the first time since April. Boosted yet again by energy prices, consumer prices overall still aren’t where the Fed needs them to be (by its own policies, not consumer reality). In fact, despite a 10.2% gain in the energy price index last month, the overall CPI just barely crossed the 2% mark (though for the Fed it really needs to be closer to 3% to match a 2% PCE Deflator).

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Are You Better Off Than You Were 17 Years Ago?

2017-10-15

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2017-10-15

US Gross Domestic Product, 1960 - 2017
We tend to measure what's easily measured (and supports the status quo) and ignore what isn't easily measured (and calls the status quo into question). If we use gross domestic product (GDP) as a broad measure of prosperity, we are 160% better off than we were in 1980 and 35% better off than we were in 2000. Other common metrics such as per capita (per person) income and total household wealth reflect similarly hefty gains.

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Emerging Markets: What has Changed

2017-10-14

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2017-10-14

Thailand announced general elections will be held in November 2018. Czech police filed criminal charges against ANO leader Andrej Babis. South Africa President Zuma may face corruption charges that were previously dropped. The US suspended visa services for travelers from Turkey. Kenyan opposition candidate Odinga withdrew from a redo of the annulled presidential election. Saudi Arabia will take a more gradual approach to removing fuel subsidies....

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Noisy PMI’s In China

2017-10-14

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2017-10-14

China Manufacturing PMI, March 2007 - Sep 2017
In the US our economic data for a few months at least will be on shaky ground due to the lingering economic impacts of severe hurricanes. In China, the potential for irregularity is perhaps as great, though it has nothing to do with the weather. In a little over a week, Communist Party officials will gather for their 19th Party Congress.

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Chinese art at the Guggenheim: a window on the country’s modern history | The Economist

2017-10-13

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Chinese contemporary art is being showcased at the Guggenheim museum in New York. Many of the artists have been banned from exhibiting in China, but their work gives a unique perspective on a country that censors cultural expression. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 A generation of Chinese artists are exhibiting …

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