Category Archive: 5) Global Macro

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Our Frustrations Run Far Deeper Than Covid Lockdowns

2020-11-25

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2020-11-25

The reality is the roulette wheel is rigged and only chumps believe it's a fair game. It's easy to lay America's visible frustrations at the feet of Covid lockdowns or political polarization, but this conveniently ignores the real driver: systemic unfairness.

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Why I’m Hopeful About 2021

2020-11-24

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2020-11-24

What we need is not a return to the corrupt, tottering kleptocracy of 2019, but a re-democratization of capital, agency and money. I'm hopeful about 2021, and no, it's not because of the vaccines or the end of lockdowns or anything related to Covid. The status quo is cheering the fantasy that we'll soon return to the debt-soaked glory days of 2019 when everything was peachy.

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A Lesson In PMIs: Relative vs. Absolute

2020-11-24

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2020-11-24

IHS Markit Eurozone Composit, 2012-2020
The bid for “decoupling” has never been stronger, and, unfortunately, this time actually represents the weakest case yet for it. According to the mainstream interpretations of the most recent sentiment indicators, the US and European economies appear to be going in the complete opposite directions.

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Deflation Returns To Japan, Part 2

2020-11-23

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2020-11-23

Japan PMIs, 2018-2020
Japan Finance Minister Taro Aso, who is also Deputy Prime Minister, caused a global stir of sorts back in early June when he appeared to express something like Japanese racial superiority at least with respect to how that country was handling the COVID pandemic.

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EM Preview for the Week Ahead

2020-11-23

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2020-11-23

Most EM currencies were up last week, once again taking advantage of broad dollar weakness. In addition, EM equities also performed well, with MSCI EM up for the third week in a row and for seven of the past eight. We expect EM assets to continue benefiting from the global liquidity story as well as the weak dollar trend.

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Vaccines–Too Little, Too Late?

2020-11-22

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2020-11-22

Covid hospitalized
Trust in institutions, authorities and Big Pharma is scraping the bottom of the barrel, and rushing these vaccines into mass use with extremely high expectations of efficacy is setting up the potential for a devastating loss of trust in the vaccines should they fail to live up to the claims of 100% safety and 95% effectiveness.

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Dollar Bounce Likely to Fade

2020-11-21

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2020-11-21

Turkey CB Rate and Cost of Funding, 2015-2020
The negative virus news stream is taking a toll on market sentiment; the dollar is benefiting from the risk-off price action but is likely to fade. Weekly jobless claims data will be of interest; Fed manufacturing surveys for November will continue to roll out; Judy Shelton’s Fed confirmation is looking less and less likely.

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Turkey Central Bank Preview

2020-11-20

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2020-11-20

Turkey CB Rate and Cost of Funding, 2015-2020
We expect the Turkish central bank (CBRT) to deliver a substantial rate hike at Thursday’s meeting but not as aggressive as consensus. Bloomberg’s median expectation is for a 475 bp hike. Our call is for a somewhat less aggressive move (perhaps around 400 bp) because the recent price action is likely to afford the new CBRT administration the confidence not to have to surprise on the upside.

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Extending the Summer Slowdown

2020-11-20

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2020-11-20

US Retail Sales, 2016-2020
A big splurge in September, and then not much more in October. While it would be consistent for many to focus on the former, instead there is much about the latter which, for once, is feeding growing concerns. Retail sales, American consumer spending on goods, has been the one (outside of economically insignificant housing) bright spot since summer

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U.S. Healthcare Is Unraveling

2020-11-19

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2020-11-19

Covid hospitalized
The confidence that there will always be facilities and professionals to care for us is no longer realistic. I've covered the systemic problems of U.S. healthcare for over a decade, and as a result I've attracted numerous healthcare professionals as correspondents.

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Dollar Weakness Continues Ahead of US Retail Sales Data

2020-11-19

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2020-11-19

Crude Futures, 2020
The dollar continues to soften. October retail sales will be the US data highlight; Fed manufacturing surveys for November have started to roll out; Republican Senator Alexander opposes Judy Shelton’s nomination to the Fed.

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Dollar Soft as Markets Start the Week in Risk-On Mode

2020-11-18

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2020-11-18

EM CDS, 2020
The odds of national-level action in the US against the second wave virus outbreak remains small, even after Biden takes over; the dollar continues to soften. There is growing speculation about former Fed Chair Yellen becoming Biden’s Treasury Secretary; Fed manufacturing surveys for November will start to roll out; Peru’s interim President Merino resigned under pressure from more demonstrations.

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Roadblocks and Opportunities for International Trade in 2021

2020-11-18

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2020-11-18

We see significant upside risk for global trade coming from “top down” forces (such as politics), but at the same time we expect the undercurrent reconfiguring many of the existing relationships to intensify. The “Peak Globalization” narrative (at least regarding trade) is being challenged by hopes of a revival of multilateral cooperation under Biden and the latest Asian trade agreement.

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Six Point Nine Times Two Equals What It Had In Twenty Fourteen

2020-11-17

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2020-11-17

China Industrial Production, 1999-2020
It was a shock, total disbelief given how everyone, and I mean everyone, had penciled China in as the world’s go-to growth engine. If the global economy was ever going to get off the ground again following GFC1 more than a half a decade before, the Chinese had to get back to their precrisis “normal.”

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Don’t Blame Covid: The Economy is Imploding from Over-Capacity and Corrupt Cartels

2020-11-17

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2020-11-17

Now that the bubble has burst, the hope is that removing the pin will magically restore the burst bubble. Sorry, it doesn't work that way. Here's the fantasy: if we stop the shutdowns, the economy will naturally bounce back to its oh-so wunnerful perfection of Q3 2019. This is a double-dose of magical thinking and denial.

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Drivers for the Week Ahead

2020-11-16

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2020-11-16

The virus numbers in the US show no signs of slowing; the dollar should continue to soften. October retail sales Tuesday will be the US data highlight for the week; Fed manufacturing surveys for November will start to roll out; the Senate will hold a procedural vote this week to advance Judy Shelton’s nomination to the Fed Board of Governors.

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Prepare for Winter

2020-11-16

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2020-11-16

Realism must precede optimism or the optimism will collapse as the tsunami of reality comes ashore. It's time to prepare materially and psychologically for a winter unlike any other in our lifetimes.

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Where Is It, Chairman Powell?

2020-11-15

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2020-11-15

CPI less Food & Energy, 1983-2020
Where is it, Chairman Powell? After spending months deliberately hyping a “flood” of digital money printing, and then unleashing average inflation targeting making Americans believe the central bank will be wickedly irresponsible when it comes to consumer prices, the evidence portrays a very different set of circumstance.

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“The Great Reset” Already Happened

2020-11-14

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2020-11-14

Shares of gross domestic Income,1960-2020
Put another way: the elites have cannibalized the system so thoroughly that there's nothing left to steal, exploit or cannibalize. The global elites' techno-fantasy of a completely centralized future, The Great Reset, is addressed as a future project. Too bad it already happened in 2008-09. The lackeys and toadies tasked with spewing the PR are 12 years too late, and so are the critics listening to the PR with foreboding.

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Dollar Softens Ahead of CPI Data

2020-11-13

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2020-11-13

US HY Yield, 2020
Pressure on the dollar has resumed; October CPI data will be the US highlight; US bond market was closed yesterday but yields have eased a bit today. Weekly jobless claims data will be reported; monthly budget statement for October will hold some interest; Mexico is expected to cut rates 25 bp to 4.0%; Peru is expected to keep rates steady at 0.25%.

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