Tag Archive: global trade

GDP + GFC = Fragile

March 15 was when it all began to come down. Not the stock market; that had been in freefall already, beset by the rolling destruction of fire sale liquidations emanating out of the repo market (collateral side first). No matter what the Federal Reserve did or announced, there was no stopping the runaway devastation.

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The Real Diseased Body

Another day, another new Federal Reserve “bailout.” As these things go by, quickly, the details become less important. What is the central bank doing today? Does it really matter?For me, twice was enough. All the way back in 2010 I had expected other people to react as I did to QE2. If you have to do it twice, it doesn’t work.

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Two Years And Now It’s Getting Serious

We knew German Industrial Production for December 2019 was going to be ugly given what deStatis had reported for factory orders yesterday. In all likelihood, Germany’s industrial economy ended last year sinking and maybe too quickly. What was actually reported, however, exceeded every pessimistic guess and expectation – by a lot.

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The Big And Small of Leading Japan

In the middle of 2018, Japan, they said, was riding so high. Gliding along on the tidal wave of globally synchronized growth, Haruhiko’s courage and more so patience had finally delivered the long-promised recovery. The Japanese economy had healed to a point that its central bank officials believed it time to wean the thing off decades of monetary “stimulus.”

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Clarida Picks Up Some Data

I should know better than to make declarative all-or-none statements like this. I said there isn’t any data which comports with the idea of a global turnaround, this shakeup in sentiment which since early September has gone right from one extreme to the other. Recession fears predominated in summer only to be (rather easily) replaced by near euphoria (again).

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The Real Trade Dilemma

When I write that there are no winners around the world, what I mean is more comprehensive than just the trade wars. On that one narrow account, of course there are winners and losers. The Chinese are big losers, as the Census Bureau numbers plainly show (as well as China’s own). But even the winners of the trade wars find themselves wondering where all the spoils are.

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More Trends That Ended 2019 The Wrong Way

Auto sales in 2019 ended on a skid. Still, the year as a whole wasn’t nearly as bad as many had feared. Last year got off on the wrong foot in the aftermath of 2018’s landmine, with auto sales like consumer spending down pretty sharply to begin it. Spending did rebound in mid-year if only somewhat, enough, though, to add a little more to the worst-is-behind-us narrative which finished off 2019.

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Everything Comes Down To Which Way The Dollar Is Leaning

Is the global economy on the mend as everyone at least here in America is now assuming? For anyone else to attempt to answer that question, they might first have to figure out what went wrong in the first place. Most have simply assumed, and continue to assume, it has been fallout from the “trade wars.”

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If Trade Wars Couldn’t, Might Pig Wars Change Xi’s Mind?

Forget about trade wars, or even the eurodollar’s ever-present squeeze on China’s monetary system. For the Communist Chinese government, its first priority has been changed by unforeseen circumstances. At the worst possible time, food prices are skyrocketing. A country’s population will sit still for a great many injustices. From economic decay to corruption and rising authoritarianism, the line between back alley grumbling and open rebellion is...

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More Signals Of The Downturn, Globally Synchronized

For US importers, October is their month. And it makes perfect sense how it would be. With the Christmas season about to kick into full swing each and every November, the time for retailers to stock up in hearty anticipation is in the weeks beforehand. The goods, a good many future Christmas presents, find themselves in transit from all over the world during the month of October.

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The Real Boom Potential

For the last five years Larry Summers has called it secular stagnation. It’s the right general idea as far as the result, if totally wrong as to its cause. Alvin Hansen, who first coined the term and thought up the thesis in the thirties, was thoroughly disproved by the fifties. Some, perhaps many Economists today believe it was WWII which actually did the disproving.

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China’s Dollar Problem Puts the Sync In Globally Synchronized Downturn

Because the prevailing theory behind the global slowdown is “trade wars”, most if not all attention is focused on China. While the correct target, everyone is coming it at from the wrong direction. The world awaits a crash in Chinese exports engineered by US tariffs. It’s not happening, at least according to China’s official statistics.

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The Big Picture Doesn’t Include ‘Trade Wars’

The WTO today downgraded its estimates for global trade growth. In April, the international organization had figured the total volume of world merchandise trade would expand by about 2.6% in all of 2019 once the year closed out on the anticipated second half rebound. Everyone took their lumps in H1 and the WTO like central bankers everywhere were thinking “transitory” factors.

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Waiting on the Calvary

Engaged in one of those protectionist trade spats people have been talking about, the flow of goods between South Korea and Japan has been choked off. The specific national reasons for the dispute are immaterial. As trade falls off everywhere, countries are increasingly looking to protect their own. Nothing new, this is a feature of when prolonged stagnation turns to outright contraction.

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Where The Global Squeeze Is Unmasked

Trade between Asia and Europe has dimmed considerably. We know that from the fact Germany and China are the two countries out of the majors struggling the most right now. As a consequence of the slowing, shipping companies have had to make adjustments to their fleet schedules over and above normal seasonal variances.

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Is The Negativity Overdone?

Give stimulus a chance, that’s the theme being set up for this week. After relentless buying across global bond markets distorting curves, upsetting politicians and the public alike, central bankers have responded en masse. There were more rate cuts around the world in August than there had been at any point since 2009.

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Copper Confirmed

Copper prices behave more deliberately than perhaps prices in other commodity markets. Like gold, it is still set by a mix of economic (meaning physical) and financial (meaning collateral and financing). Unlike gold, there doesn’t seem to be any rush to get to wherever the commodity market is going. Over the last several years, it has been more long periods of sideways.

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The Myth of CNY DOWN = STIMULUS Won’t Die

On the one hand, it’s a small silver lining in how many even in the mainstream are beginning to realize that there really is something wrong. Then again, they are using “trade wars” to make sense of how that could be. For the one, at least they’ve stopped saying China’s economy is strong and always looks resilient no matter what data comes out.

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Germany Struggles On

The popular image of the German industrial machine politics is one which has Germany’s massive factories efficiently churning out goods for trade with the South of Europe (Club Med). Because of the common currency, numerous disparities starting with productivity differences had left the South highly indebted to the North just as the Global Financial Crisis would strike.

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Commodities And The Future Of China’s Stall

Commodity prices continued to fall last month. According to the World Bank’s Pink Sheet catalog, non-energy commodity prices accelerated to the downside. Falling 9.4% on average in May 2019 when compared to average prices in May 2018, it was the largest decline since the depths of Euro$ #3 in February 2016.

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