Category Archive: 5) Global Macro

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U.S. Consumer Price Index, Oil Prices: Why It Will Continue, Again Continued

2017-07-26

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2017-07-26

Quarterly Report on Bank Derivatives, Jan 1998 - 2017
Part of “reflation” was always going to be banks making more money in money. These days that is called FICC – Fixed Income, Currency, Commodities. There’s a bunch of activities included in that mix, but it’s mostly derivative trading books forming the backbone of math-as-money money. The better the revenue conditions in FICC, the more likely banks are going to want to do more of it, perhaps to the point of reversing what is just one quarter shy of...

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Commercial Property Market Is Inflated and May Burst Again – McWilliams

2017-07-25

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2017-07-25

Dublin Office Rent, 2009 - 2017
Dublin property investors had better hope that Brexit happens soon. They should also hope that it’s not just a ‘hard’ Brexit, but a granite Brexit — a Brexit that’s as hard as possible. They should be betting on the buffoonery of Boris Johnson, down on both knees praying for a massive barney between Davis and Barnier.

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There Is Only One Empire: Finance

2017-07-25

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2017-07-25

China Debt - Breakdown, 2002 - 2016
There's an entire sub-industry in journalism devoted to the idea that China is poised to replace the U.S. as the "global empire" / hegemon. This notion of global empire being something like a baton that gets passed from nation-state to nation-state is seriously misleading, in my view, for this reason:

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Osaka: An Insiders Guide | The Economist

2017-07-24

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Osaka is the fastest-growing destination city in the world. Three locals give us their top tips for experiencing Japan’s second largest city. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Daily Watch: mind-stretching short films throughout the working week. For more from Economist Films visit: http://films.economist.com/ Check out The Economist’s full video catalogue: …

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Emerging Markets: Week Ahead Preview

2017-07-24

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2017-07-24

EM FX was mixed on Friday, but largely firmer over the entire week. Top performers were BRL, KRW, and ZAR, while the worst were ARS, MXN, and RUB. FOMC meeting this week poses some potential risks to the global liquidity story that’s supporting EM. Within EM, the low inflation/easy monetary policy narrative should continue with data and events this week.

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Reports on a Quarterly Survey Conducted: Qualifying Shortage (Labor)

2017-07-23

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2017-07-23

US Nonfarm Payrolls Missing
There isn’t a day that goes by in 2017 where some study is released or anecdote is published purporting a sinister labor market development. There is a shortage of workers, we are told, often a very big one. The idea is simple enough; the media has been writing for years that the US economy was recovering, and they would very much like to either see one and be proven right (and that recent revived populism is illegitimate), or find an excuse why...

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Emerging Markets: What has Changed

2017-07-22

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2017-07-22

South Korea proposed resuming military and humanitarian exchanges with North Korea. The European Union may sanction Poland over its controversial judicial overhaul. Turkish Prime Minister Yildirim announced a cabinet shuffle after meeting with President Erdogan. Turkey’s worsening relations with Germany will come with economic costs. South African Reserve Bank surprised markets by starting the easing cycle with a 25 bp cut to 7.0%.

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China’s Economy Shorthand the Largest Asset Bubble in Human History

2017-07-22

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2017-07-22

China Industrial Production, June 1997 - Jun 2017
The term “ghost city” is a loaded one, often deployed to skew toward a particular viewpoint. In the context of China’s economy, it has become shorthand for perhaps the largest asset bubble in human history. While that may ultimately be the case, in truth China’s ghost cities aren’t about the past but its future.

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Trump and Putin’s chess match, by KAL | The Economist

2017-07-21

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At the most recent G20 summit, Donald Trump and Vladimir Putin met for a private chat. Our cartoonist KAL imagines their dialogue. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Daily Watch: mind-stretching short films throughout the working week. For more from Economist Films visit: http://films.economist.com/ Check out The Economist’s full video catalogue: …

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ALERT! The Road to Financialization W/Charles Hugh Smith

2017-07-21

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U.S. Industrial Production: Industrial Drag

2017-07-21

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2017-07-21

U.S. Industrial Production, YoY 2015 - 2017
Completing a busy day of US economic data, Industrial Production was, like retail sales and inflation data, highly disappointing. Prior months were revised slightly lower, leaving IP year-over-year up just 2% in June 2017 (estimates for May were initially 2.2%). Revisions included, the annual growth rate has been stuck around 2% now for three months in a row, suggesting like those other accounts a pause or even possible end to the mini-improvement...

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Retail Sales Conundrum

2017-07-20

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2017-07-20

U.S. Retail Sales All Weakness, Jun 2011 - 2017
Retail sales were thoroughly disappointing in June. Whereas other accounts such as imports or durable goods had at least delivered a split decision between adjusted and unadjusted versions, for retail sales both views of them were ugly. Seasonally-adjusted first, spending last month was down for the second straight time. Worse than that, estimated sales were just barely more than in January.

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Why is sand in short supply? | The Economist

2017-07-19

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The world uses 40 billion tonnes of sand each year to build cities and towns, but global reserves are running low. We find out why. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Sand is crucial for construction. Much of the global economy relies on it. We use 40 billion tonnes of it … Continue...

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US S&P 500 Index, Federal Funds Target, Manufacturing Payrolls, US Imports and US Banking Data: All Conundrums Matter

2017-07-19

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2017-07-19

Case Study: S&P 500 Index and Federal Funds Target
Since we are this week hypocritically obsessing over monetary policy, particularly the federal funds rate end of it, it’s as good a time as any to review the full history of 21st century “conundrum.” Janet Yellen’s Fed has run itself afoul of the bond market, just as Alan Greenspan’s Fed did in the middle 2000’s.

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Global Asset Allocation Update: Not Yet

2017-07-18

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2017-07-18

Moderate Allocation
There is no change to the risk budget this month. For the moderate risk investor, the allocation between risk assets and bonds is unchanged at 50/50. There are no changes to the portfolio this month. Growth and inflation expectations rose somewhat since last month’s update. The change is minor though and within the range of what we’ve seen in recent months.

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RMR: Exclusive Interview with Charles Hugh Smith (07/17/2017)

2017-07-17

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Charles shares his great insights regarding how the financial elites have destroyed the real economy, asks if the political parties are outdated and explains what the petrodollar really is. We are political scientists, editorial engineers, and radio show developers drawn together by a shared vision of bringing Alternative news through digital mediums that evangelize our …

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Bi-Weekly Economic Review: Attention Shoppers

2017-07-17

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2017-07-17

The majority of the economic reports over the last two weeks have been disappointing, less than the consensus expectations. The minor rebound in activity we’ve been tracking since last summer appears to have stalled. Retail sales continue to disappoint and inventory/sales ratios are once again rising – from already elevated levels.

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Emerging Markets: Preview of the Week Ahead

2017-07-17

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2017-07-17

Emerging Markets FX ended the week on a firm note, helped by softer than expected US data. Indeed, EM FX was up across the board for the entire week and was led by BRL, MXN, and ZAR. The ECB meeting this week will draw some interest, especially after the BOC last week became the second major central bank to hike rates.

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Wholesale: No Acceleration, No Liquidation

2017-07-16

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2017-07-16

Wholesale Sales and Inventory, NSA
In the same way as durable goods orders and US imports, wholesale sales in May 2017 were up somewhat unadjusted but down for the third straight month according the seasonally-adjusted series. As with those other two, the difference is one of timing. In other words, combining the two sets, seasonal and not, we are left to interpret a possible recent slowing in activity.

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China Imports and Exports: The Ghost Recovery

2017-07-16

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2017-07-16

China Trade Ghost Cities
To the naked eye, it represents progress. China has still an enormous rural population doing subsistence level farming. As the nation grows economically, such a way of life is an inherent drag, an anchor on aggregate efficiency Chinese officials would rather not put up with.

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