Tag Archive: US

Where Do US Companies Hire Abroad?

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

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

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

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

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

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

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?

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

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

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!

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?

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?

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

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

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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Great Graphic: Median U.S. Income per Presidents

Median household income was higher in 2015 than in 2008, but still below 1999 peak in real terms. The bottom fifth of households by income have just recouped what was lost. Income growth did best under (Bill) Clinton and Reagan, including for top 5%. Origin of strong dollar policy means it will not be used as a trade weapon and it hasn't since Bentsen.

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Labour Productivity, Taxes and Okun’s Law

The great “science” of economics once discovered an empirical relationship between GDP and unemployment that has been dubbed Okun’s Law. It simply states that the unemployment rate rises as GDP contracts, or vice versa, as production shrinks less peo...

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Mission Creep – How the Fed will justify maintaining its excessive balance sheet

FOMC have changed their normalizing strategy several times and we now see the contours of yet another shift. The Federal Reserve was supposed to reduce its elevated balance sheet before moving interest higher as it would be impossible to increase the fed funds rate in the old fashioned way when the market was saturated with trillions of dollars in excess reserves.

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Stupid is What Stupid Does – Secular Stagnation Redux

Which country, the United States or Japan, have had the fastest GDP growth rate since the financial crisis? Due to Japan’s bad reputation as a stagnant, debt ridden, central bank dependent, demographic basket case the question appears superfluous. The answer seemed so obvious to us that we haven’t really bothered looking into it until one day we started thinking about the demographic situation in the two countries.

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The FOMC Butterfly that Will Ruin the World

Given the fact that the core CPI is currently over the arbitrarily set 2 per cent target unemployment below what the FOMC regards as full employment and GDP running at a rate far above the Federal Reserve’s own estimates of so-called potential; you would say the Federal Funds rate would be in the vicinity of five per cent.

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