Category Archive: 5) Global Macro

2017-07-03

EM FX ended the week on a mixed note, as investors await fresh drivers. US jobs data on Friday could provide more clarity on Fed policy and the US economy. Within EM, many countries are expected to report lower inflation readings for June that support the view that most EM central banks will remain in dovish mode for now. We remain cautious on the EM asset class near-term.

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If We Don’t Change the Way Money Is Created, Rising Inequality and Social Disorder Are Inevitable

2017-07-02

2017-07-02

Centrally issued money optimizes inequality, monopoly, cronyism, stagnation and systemic instability. Everyone who wants to reduce wealth and income inequality with more regulations and taxes is missing the key dynamic: central banks' monopoly on creating and issuing money widens wealth inequality, as those with access to newly issued money can always outbid the rest of us to buy the engines of wealth creation.

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Brazil’s Reasons

2017-07-02

2017-07-02

Brazil is another one of those topics which doesn’t seem to merit much scrutiny apart from morbid curiosity. Like swap spreads or Japanese bank currency redistribution tendencies, it is sometimes hard to see the connection for US-based or just generically DM investors. Unless you set out to buy an emerging market ETF heavily weighted in the direction of South America, Brazil’s problems can seem a world away.

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Emerging Markets: What has Changed

2017-07-01

2017-07-01

Chinese President Xi visited Hong Kong for the first time. The US has proposed $1.3 bln of arms sales to Taiwan. The Egyptian government raised fuel and cooking gas prices. significantly as part of the IMF program. South Africa’s parliament has scheduled the no confidence vote on President Zuma. Brazil’s central bank lowered its inflation target. Brazil after President Temer was charged with corruption.

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Basic China Money Math Still Doesn’t Add Up To A Solution

2017-07-01

2017-07-01

$China Basic Money Math$

There are four basic categories to the PBOC’s balance sheet, two each on the asset and liability sides of the ledger. The latter is the money side, composed mainly of actual, physical currency and the ledger balances of bank reserves. Opposing them is forex assets in possession of the central bank and everything else denominated in RMB.

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Automation’s Destruction of Jobs: You Ain’t Seen Nothing Yet

2017-06-30

2017-06-30

Automation--networked robotics, software and processes--has already had a major impact on jobs. As this chart from my colleague Gordon T. Long illustrates, the rise of Internet technologies is reflected in the steady, long-term decline of the labor force participation rate-- the percentage of the populace that is actively in the labor market.

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Fading Further and Further Back Toward 2016

2017-06-29

2017-06-29

Earlier this month, the BEA estimated that Disposable Personal Income in the US was $14.4 trillion (SAAR) for April 2017. If the unemployment rate were truly 4.3% as the BLS says, there is no way DPI would be anywhere near to that low level. It would instead total closer to the pre-crisis baseline which in April would have been $19.0 trillion. Even if we factor retiring Baby Boomers in a realistic manner, say $18 trillion instead, what does the...

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Now China’s Curve

2017-06-28

2017-06-28

Suddenly central banks are mesmerized by yield curves. One of the jokes around this place is that economists just don’t get the bond market. If it was only a joke. Alan Greenspan’s “conundrum” more than a decade ago wasn’t the end of the matter but merely the beginning. After spending almost the entire time in between then and now on monetary “stimulus” of the traditional variety, only now are authorities paying close attention.

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RMR: Exclusive Interview with Charles Hugh Smith (06/27/2017)

2017-06-27

Charles Hugh Smith author of the blog “Of Two Minds” joins “V” for a great discussion regarding the cryptocurrency market, a stock market crash scenario, what the markets are telling us and “The Over-Criminalization of American Life.” You can learn about Charles’s work at: http://charleshughsmith.blogspot.com/ We are political scientists, editorial engineers, and radio show developers …

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A secret information war with North Korea | The Economist

2017-06-27

by The Economist

A group of North Korean exiles are waging a secret war with North Korea—smuggling in information and content to the imprisoned population via USBs. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Kang Chol-hwan is a North Korean defector from North Korea. He is founder and president of the North Korea Strategy Centre. …

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More Pieces of Impossible

2017-06-27

2017-06-27

On his company’s earnings conference call back on Valentine’s Day, T-Mobile CEO John Legere was unusually feisty. Never known for shyness, Legere had reason behind his bluster. T-Mobile had practically built itself up on price, being left the bottom tier of the wireless space practically to itself. That all changed, however, as both Verizon and Sprint were set to escalate the wireless price war.

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Chinese Basis For Anti-Reflation?

2017-06-26

2017-06-26

Yesterday was something of a data deluge. In the US, we had the predictable CPI dropping again, lackluster US Retail Sales, and then the FOMC’s embarrassing performance. Across the Pacific, the Chinese also reported Retail Sales as well as Industrial Production and growth of investments in Fixed Assets (FAI). When deciding which topics to cover yesterday, it was easy to leave off the Chinese portion simply because much of it didn’t change.

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How I survived torture | The Economist

2017-06-26

by The Economist

The United Nations Convention against Torture is 30 years old. Kolbassia Haoussou, a torture survivor, shares his story. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Over 160 states have signed the UN Convention against Torture sinces its adoption in 1984. Half of these countries still practice torture. In 2004, a failed coup …

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Emerging Markets: Week Ahead Preview

2017-06-26

2017-06-26

EM FX ended last week on a firm note, though most were still down for the week as a whole. Commodity prices stabilized, but the balance remains fragile, in our view. We remain cautious, especially with regards to the high beta currencies such as BRL, MXN, TRY, and ZAR.

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Charles Hugh Smith On Central Bank Buying Of Equities

2017-06-26

Click here for the full summary with slides: http://financialrepressionauthority.com/2017/06/25/the-roundtable-insight-charles-hugh-smith-on-central-bank-buying-of-equities/

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Can We See a Bubble If We’re Inside the Bubble?

2017-06-25

2017-06-25

If you visit San Francisco, you will find it difficult to walk more than a few blocks in central S.F. without encountering a major construction project. It seems that every decrepit low-rise building in the city has been razed and is being replaced with a gleaming new residential tower.

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Defying Labels

2017-06-25

2017-06-25

US Industrial Production, January 2010 - June 2017

Last month US Industrial Production rose rather quickly. Gaining more than 1.1% month-over-month, it might have appeared that the US economy once dragged into downturn by manufacturing and industry was finally about to experience its belated upturn. But frustration is how it has always gone, not just in this latest phase but for all phases since around 2011. Each good month is followed immediately by a disappointing one. What should be...

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Global Asset Allocation Update:

2017-06-24

by Joseph Y. Calhoun

2017-06-24

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.

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Emerging Markets: What’s Changed

2017-06-24