Category Archive: 5) Global Macro

2018-06-18

US-China trade tensions are rising. Pakistan devalued the rupee for a third time since December. Bulgaria will seek to join the eurozone banking union and ERM-2 simultaneously. The National Bank of Hungary appears to have tilted more hawkish. Newly elected Egyptian President El-Sisi shuffled his cabinet. Argentina has a new central bank chief after Federico Sturzenegger resigned.

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Here We Go Again: Our Double-Bubble Economy

2018-06-17

2018-06-17

The bubbles in assets are supported by the invisible bubble in greed, euphoria and credulity. Well, folks, here we go again: we have a double-bubble economy in housing and stocks, and a third difficult-to-chart bubble in greed, euphoria and credulity.

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Recent Concerning Consumer Credit Trends Carry On Into April

2018-06-16

2018-06-16

Consumer-Credit Revolving Monthly Change 2012-2018

US consumers continue to recover from their debt splurge at the end of last year. Combined with still weaker income growth, the Federal Reserve estimates that aggregate revolving credit balances grew only marginally for the fourth straight month in April 2018. To put it in perspective, the total for revolving credit (seasonally adjusted) is up a mere $2.2 billion for all four months of this year combined, compared to +$5.2 billion in December 2017...

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Chinese Inflation And Money Contributions To EM’s

2018-06-15

2018-06-15

China CPI PBOC Bank Reserves, May 2007 - 2018

The People’s Bank of China won’t update its balance sheet numbers for May until later this month. Last month, as expected, the Chinese central bank allowed bank reserves to contract for the first time in nearly two years. It is, I believe, all part of the reprioritization of monetary policy goals toward CNY. How well it works in practice remains to be seen. Authorities are not simply contracting one important form of base money in China (bank...

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Bi-Weekly Economic Review – VIDEO

2018-06-14

by Joseph Y. Calhoun

2018-06-14

Interview with Joe Calhoun about BiWeekly Economic Review 15/06/2018.

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A Slight Hint Of A 2011 Feel

2018-06-13

2018-06-13

Whenever a big bank is rumored to be in unexpected merger talks, that’s always a good sign, right? The name Deutsche Bank keeps popping up as it has for several years now, this is merely representative of what’s wrong inside of a global system that can’t ever get fixed. In this one case, we have a couple of perpetuated conventional myths colliding into what is still potentially grave misfortune.

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Emerging Markets: Preview of the Week Ahead

2018-06-12

2018-06-12

EM FX ended Friday on a mixed note, capping off a roller coaster week for some of the more vulnerable currencies. We expect continued efforts by EM policymakers to inject some stability into the markets. However, we believe the underlying dollar rally remains intact. Central bank meetings in the US, eurozone, and Japan this week are likely to drive home that point.

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Brent’s Back In A Big Way, Still ‘Something’ Missing

2018-06-12

2018-06-12

The concept of bank reserves grew from the desire to avoid the periodic bank runs that plagued Western financial systems. As noted in detail starting here, the question had always been how much cash in a vault was enough? Governments around the world decided to impose a minimum requirement, both as a matter of sanctioned safety and also to reassure the public about a particular bank’s status.

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Emerging Markets: What Changed

2018-06-11

2018-06-11

The Reserve Bank of India hiked rates for the first time since 2014. Malaysia’s central bank governor resigned. Czech central bank tilted more hawkish. Russia central bank tilted more dovish. Argentina got a $50 bln standby program from the IMF.

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The Three Crises That Will Synchronize a Global Meltdown by 2025

2018-06-09

2018-06-09

We're going to get a synchronized global dynamic, but it won't be "growth" and stability, it will be DeGrowth and instability. To understand the synchronized global meltdown that is on tap for the 2021-2025 period, we must first stipulate the relationship of "money" to energy:"money" is nothing more than a claim on future energy. If there's no energy available to fuel the global economy, "money" will have little value.

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US Trade Settles Down Again

2018-06-08

2018-06-08

U.S. Trade Trade Balance, Import, Export, Jan 2014 - May 2018

US trade is further leveling off after several months of artificial intrusions. On the import side, in particular, first was a very large and obvious boost following last year’s big hurricanes along the Gulf Coast. Starting in September 2017, for four months the value of imported goods jumped by an enormous 8.3% (revised, seasonally-adjusted). Most of the bump related to consumer and capital goods.

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Does Anyone Else See a Giant Bear Flag in the S&P 500?

2018-06-07

2018-06-07

We all know the game is rigged, but strange things occasionally upset the "easy money bet." "Reality" is in the eye of the beholder, especially when it comes to technical analysis and economic tea leaves.

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Bi-Weekly Economic Review: As Good As It Gets?

2018-06-06

by Joseph Y. Calhoun

2018-06-06

In the last update I wondered if growth expectations – and growth – were breaking out to the upside. 10 year Treasury yields were well over the 3% threshold that seemed so ominous and TIPS yields were nearing 1%, a level not seen since early 2011. It looked like we might finally move to a new higher level of growth. Or maybe not.

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Emerging Markets: Preview of the Week Ahead

2018-06-05

2018-06-05

EM FX put in a mixed performance Friday, and capped off an overall mixed week. Over that week, the best performers were IDR, TRY, and INR while the worst were BRL, MXN, and ARS. US yields are recovering and likely to put renewed pressure on EM FX.

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Bi-Weekly Economic Review – VIDEO

2018-06-04

by Marcelo Perez

2018-06-04

Interview with Joe Calhoun about BiWeekly Economic Review 01/06/2018.

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Burrito Index Update: Burrito Cost Triples, Official Inflation Up 43 percent from 2001

2018-06-02

2018-06-02

Welcome to debt-serfdom, the only possible output of the soaring cost of living. Long-time readers may recall the Burrito Index, my real-world measure of inflation. The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016). The Burrito Index tracks the cost of a regular burrito since 2001. Since we keep detailed records of expenses (a necessity if you’re a self-employed free-lance writer), I can track the cost of a regular...

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Emerging Market Preview: Week Ahead

2018-06-01

2018-06-01

EM FX has started the week mixed. Some relief was seen as US rates stalled out last week, but this Friday’s jobs number could be key for the next leg of this dollar rally. On Wednesday, the Fed releases its Beige book for the upcoming June 13 FOMC meeting, where a 25 bp hike is widely expected. We believe EM FX remains vulnerable to further losses.

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America 2018: Dicier by the Day

2018-05-31

2018-05-31

Venezuela is Annual Inflation Rate 2015-2018

Scrape all this putrid excrescence off and we're left with a non-fantasy reality: everything is getting dicier by the day. If we look beneath the cheery chatter of the financial media and the tiresomely repetitive Russian collusion narrative (that's unraveling as the Ministry of Propaganda's machinations are exposed), we find that America in 2018 is dicier by the day.

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How Systems Collapse

2018-05-30