Tag Archive: US

A Few Thoughts about the US Labor Market

2017-03-08

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2017-03-08

work
The 94 mln people POTUS claims are not working is true but terribly misleading. What happened to agriculture a century ago is happening to manufacturing. New industries are less labor intensive than smokestack industries.

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Great Graphic: US and Japan Five-Year Credit Default Swaps

2017-02-21

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2017-02-21

Japan and US 5-year credit default swap (CDS)
For the first time since the financial crisis, the 5-year CDS on JGBs is dipping below the 5-year US CDS. It appears to be more a function of a decline in Japan's CDS than a rise in the US CDS. We are reluctant to read too much into the small price changes in the mostly illiquid instruments.

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The Future of Globalization

2017-02-03

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2017-02-03

antiglobalization
antiglobalizationThe cross-border movement of goods, services, and capital increased markedly for the thirty years up to the Great Financial Crisis. Although the recovery has given way to a new economic expansion in the major economies, global trade and capital flows remain well below pre-crisis levels. It had given rise to a sense globalization is ending.

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FX Weekly Preview: Macro Forces Underpin Dollar, Equities and Yields

2017-01-09

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2017-01-09

Rushmore
Odds of a March Fed hike edged up last week, and Q4 GDP figures were revised higher. Many continue to expect the new US Administration to pursue pro-growth tax reform, deregulation and infrastructure spending. Although many other high income countries are growing, near trend divergence of monetary policy continues.

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FX Outlook 2017: Politics to Eclipse Economics

2016-12-26

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2016-12-26

Economic Events: United Kingdom, Week December 26
Investors are familiar with a broad set of macroeconomic variables that often drive asset prices. Many are familiar with corporate balance sheets, price-earning ratios, free cash flow, Q-ratio, and the like.

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Where Do US Companies Hire Abroad?

2016-12-23

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2016-12-23

High-wage economies of Canada, EU, Japan and Australia account for nearly half of US corporate employment abroad. And even in low-wage regions, the high-wage parts tend to draw more US employment. The new US administration may have second thoughts about pivot to Asia, but US companies may not.

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Toward A New World Order, part III

2016-12-19

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2016-12-19

A new world order is coming of age and the transition is painful to accept for a Western middle class with a deep-seated sense of entitlement. We showed how the West feels threatened globally in Toward a New World Order and followed up explaining how this translate into domestic politics in Toward a New World Order Part II. We will now continue this series by showing how gross economic mismanagement have created the new political class that we...

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Rising Trade Tensions

2016-12-17

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2016-12-17

Trade
Obama Administration has taken a hardline against China's trade practices. Other countries are also resisting China's arguments that it is a market economy. Last week, US imposed anti-dumping duties on imported washing machines from China.

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Great Graphic: Another Look at the Reproduction Problem

2016-12-09

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2016-12-09

Change of making more money than your parents if you were
In order for a society to be sustained social relations have to be reproduced. Yet now neither the middle class nor capital are able to reproduce themselves. This may be the single greatest challenge our society faces.

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Some Thoughts on Q3 US GDP

2016-11-30

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2016-11-30

monkey-thinking
US Q3 was revised higher mostly due to consumption. Business investment was a drag. Profits rose to snap a five-quarter slide.

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FX Weekly Preview: Shifting Portfolio Preferences Continue to Drive Capital Markets

2016-11-28

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2016-11-28

Forces emanating from the US and Europe are driving the capital markets. The moves may be stretched technically, but the market adjustment has further to run as not even two Fed hikes are discounted for next year. European political concerns and an ECB expected to continue its asset purchases have driven German 2-year yields to new record lows.

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Toward a New World Order, Part II

2016-11-12

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2016-11-12

One of the most widespread misconceptions in the realm of politics is the notion of a left-right axis. This has been used over and over to explain political outcomes and paint the various factions as polar opposites. For example, in the US the two main parties, the Republicans (right) and Democrats (left), are often portrayed as a fight between good and evil.

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Toward a New World Order?

2016-11-11

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2016-11-11

A Brave New World is coming? Perhaps. We had a recent discussion with a group of people in the hopeless business of doing long term forecasting. This made us think about what the world will look like over the next 20 to 40 years. A pretty thankless task, but the bottom line is without a damn good war, Asia will be the way of the future.

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US Jobs Data Maintains Fed Hike Expectations

2016-11-04

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2016-11-04

Honey mooners
US jobs data was largely in line or better than expected. The stronger earnings growth may be more important than the headline. Canada's data was mostly disappointing.

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US Political Anxiety Stems Bond Sell-Off

2016-11-03

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2016-11-03

Yield
Bond yields have been rising in the US and Europe since the summer. There are some country-specific considerations and some generalized factors. Anxiety over US politics has helped bonds recover some lost ground.

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L’argent des banques centrales finit dans les paradis fiscaux!

2016-10-24

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2016-10-24

Nous savions que la crise avait laminé les finances des Etats, de l’économie publique et des familles. Jusque là rien de nouveau. Mais en finance, quand quelqu’un perd, il y a en général quelqu’un d’autre qui gagne la même somme et peut-être plus. A moins qu’il ne s’agisse de billets physiques que l’on flambe, c’est comme ça.Nous allons donc nous intéresser aux grands gagnants de la crise financière.

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USD ready for a second leg higher – then what?

2016-10-17

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2016-10-17

One year ago we showed the following chart to explain the relative strong dollar that was on everyone’s mind at the time. With a second leg higher in the US dollar imminent, this particular chart will be more important than ever. Claims to dollars, such as demand and time deposits, or even more opaque money-like products created by the shadow banking system is just that, a claim or derivative on the final mean of payment, namely base money.

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Do our money managers really believe this will end well?

2016-10-09

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2016-10-09

An economic bubble is essentially an economic activity that cannot sustain itself without a continuous influx of new money and credit to bid away real resources from self-funding endeavors. Financial bubbles are obviously closely related as financial...

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FX Weekly Preview: Politics to Overshadow Economics in the Week Ahead

2016-09-25

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2016-09-25

The major central banks have placed down their markers and have moved to stage left. There are the late-month high frequency data, which pose some headline risks in the week ahead. The main focus for most investors will be on several political developments. The first US Presidential debate is wild card, in the sense that the outcome is unknown. In recent weeks, the polls have drawn close. In early August, Nate Silver’s fivethirtyeight.com, the gold...

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The Road to Fascism in Just Two Charts

2016-09-19

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2016-09-19

Laws of politics have been turned upside down. The Intellectuals Yet Idiots can make no sense of it. The underdog who ‘tell it how it is’ appeal to people while established reasoning does not.

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