There are two angles to examine as coronavirus spreads in China and South East Asia. The first is health related. The second is economic. Australia is about see a wave of new Chinese tourists and students just as coronavius slips the CCP noose. Some 350k Chinese toursists arrive through the January/February period, a large swath
Unleash the panic, at News: International airports are screening passengers for a mysterious SARS-like disease that has been confirmed as passing from human-to-human and has also jumped China’s borders. The number of cases of the new coronavirus “2019-nCoV”, which causes a type of pneumonia, has surpassed 220 and authorities are concerned it could spread quickly.
Via the IMF: Tentative Stabilization, Sluggish Recovery? Global growth is projected to rise from an estimated 2.9 percent in 2019 to 3.3 percent in 2020 and 3.4 percent for 2021—a downward revision of 0.1 percentage point for 2019 and 2020 and 0.2 for 2021 compared to those in the October World Economic Outlook (WEO). The
by Chris Becker And so it begins. Via AP: Iranian state TV says Tehran has launched “tens” of surface-to-surface missiles at Iraq’s Ain Assad air base housing U.S. troops in response to the killing of top Iranian military commander Qassem Soleimani. It was not immediately clear whether the purported missile strikes struck the base or whether any
by Chris Becker Well this is a turn after the US assassinated a top Iranian general in Iraq over the weekend – and it would at least make Trump happy by undoing even more of Obama’s legacy if the US completely got out of Iraq. From Reuters: Iraq’s parliament called on Sunday for U.S. and
Via Bloomie: A nice interview with Stanley which, with MB’s four horsemen of the apocalypse vanquished by policymakers, makes a good base case for some kind of global bounce in 2020. We still don’t think it will be a glowing recovery even if the fiscal spending helps, largly because China will keep slowing. We agree
The United Kingdom’s Conservative Party is looking to copy Australia’s points-based migration system, which has been met with condemnation from employers wanting low and semi-skilled migrant workers: Boris Johnson’s proposed “Australian-style” points system to reduce immigration has been criticised for failing to understand how vital low and medium-skilled jobs are to the UK economy and
The Bank for International Settlements (BIS) has released its global household debt data for the June quarter, which again ranks Australians as the second most indebted in the world. The next table summarises the ratios of household debt to GDP: As you can see, Switzerland (131%) takes the gold medal in the global household debt
Hope at Bloomie: Asian stocks gained Tuesday amid optimism over U.S.-China trade talks and a fresh wave of merger and acquisition activity. The yen slipped. Reality at the FT: World trade contracted sharply in September, dashing hopes that the global downturn that has been weighing on exporters had bottomed out. The volume of global trade
Nobel Prize winning economist, Joseph Stiglitz, has called on governments to dump GDP as the key economic measure of progress and instead focus on better measures of societal wellbeing: The way we assess economic performance and social progress is fundamentally wrong, and the climate crisis has brought these concerns to the fore… The standard measure
We’re still waiting for Tim Toohey’s last boom which was going to skyrocket interest rates in 2017. Now a new one is on the way, via AFR: “We’re going to see another 12 to 18 months of an upswing here,” he said. “The financial markets have been obsessing about 2020 being the year of the
Nouriel Roubini at Project Syndicate: This past May and August, escalations in the trade and technology conflict between the United States and China rattled stock markets and pushed bond yields to historic lows. But that was then: since then, financial markets have once again become giddy. US and other equities are trending toward new highs,
The Teranet-National Bank House Price Index for October has been released, which shows that Canadian house prices fell by 0.1% across the 11 major markets, with annual growth improving to 1.0%: However, prices in Vancouver rebounded, rising by 0.2% in October to be down 6.2% since peaking in July 2018. The Real Estate Board of
Via UBS: We expect a recovery in 2020 but a much weaker one than consensus Things will get worse before they get better. Assuming any Phase One US-China deal is limited (no tariff roll-back), the existing tariffs should continue to work their way into the data and create an air-pocket in US growth in H1-20`
Via the excellent Damein Boey at Credit Suisse: Another day, another set of US President Trump and China headlines. Overnight, we heard reports from Chinese officials that US officials were prepared to rollback existing tariffs as each phase of trade negotiations progressed. We later heard US officials confirm these reports from their perspective, although there
Via the Hartford Courant: Two hedge fund founders on Tuesday called for the reform of capitalism to combat economic inequality and stem political upheaval. Before a crowd of about 200 at the Greenwich Economic Forum, a two-day alternative investment industry conference, Ray Dalio, founder of Bridgewater Associates, and Paul Tudor Jones, founder of Tudor Investment
Via the excellent Damien Boey at Credit Suisse: Overnight, US equities rallied to new highs, bonds weakened and the yield curve steepened on positive trade headlines: US officials suggested that a deal with China is “almost there”. Chinese officials expressed doubt as to where phase I of the trade deal will be signed, questioned how
Not without justification: Billionaire Ray Dalio says the global economy faces a ‘scary situation’ https://t.co/UQTmCDqrRu pic.twitter.com/NvBofCJEno — Bloomberg Economics (@economics) October 29, 2019 A few points. The technology revolution is as much solution as it is problem. Productivity gains will lift income to deleverage private sectors. It is over to governments whether or not this
Via Nouriel Roubini: With the global economy experiencing a synchronized slowdown, any number of tail risks could bring on an outright recession. When that happens, policymakers will almost certainly pursue some form of central-bank-financed stimulus, regardless of whether the situation calls for it. A cloud of gloom hovered over the International Monetary Fund’s annual meeting
Via Morgan Stanley, the answer is nothing: Trade tensions between the US and China have been the single biggest source of uncertainty for the global economy over the past 18 months. After a protracted period of negotiations, some progress has been made towards a deal, with a potential Phase 1 to be signed in mid-November. How
Credit Suisse has released its 2019 Global Wealth Report, which reveals that the recent housing bust has pushed Australia down the wealth rankings, falling from second place to fourth: According to Credit Suisse: Household wealth in Australia grew quickly between 2000 and 2012 in USD terms, except during 2008. The average annual growth rate of
A nice video here from Ray Dalio covering many MB themes around the great global growth sag:
Via John Kemp comes weekly charts of hedge fund oil positioning which is definitely getting short: But has scope to get materially shorter yet: I still fear a Q4 price crash for oil as falling seasonal demand and wider global growth weakening combine to deliver another period of glut: It is my key trigger for
Via the excellent Damien Boey at Credit Suisse: Overnight, investors were buoyed by hopes of a trade deal, and apparent progress in Brexit negotiations: A possible narrow US-China trade deal: US President Trump suggested that talks with Chinese Vice Premier He were going well and that talks would not end prematurely as previously speculated. The
Via the EIA last night: Brent crude oil spot prices averaged $63 per barrel (b) in September, up $4/b from August and down $16/b from the September 2018 average. Brent spot prices began September at $61/b and increased to $68/b after attacks on major Saudi Arabian oil infrastructure disrupted the country’s crude oil production. However, Brent spot
Is there any difference? Via the excellent Damien Boey at Credit Suisse: What a wild ride it was for bonds overnight! In the Asia-Pacific time zone, bonds sold off aggressively outside Australia, as investors became worried about a potential slowdown in BoJ asset purchases in a fairly illiquid environment. But in the US time zone,
Via Rabobank: Summary The Democrats in the House of Representatives have decided to start impeachment proceedings against President Trump. While impeachment is possible as the Democrats have a majority in the House of Representatives, conviction is unlikely as long as the Republicans in the Senate continue to support their President. In this case the removal
Australia has again taken the silver medal for having the world’s second most indebted households according to the latest data from the Bank for International Settlements (BIS). The next table shows the ratios of household debt to GDP as at the March quarter of 2019. As you can see, Switzerland (130%) has again taken gold
Via Bloomie: European Central Bank President Mario Draghi said the Governing Council should be open to ideas such as Modern Monetary Theory, while noting they’re closer to fiscal policy and should be directed by governments. …“These are objectively pretty new ideas,” Draghi said. “They have not been discussed by the Governing Council. We should look
Via Nouriel Roubini at Project Syndicate: In the classic game of “chicken,” two drivers race directly toward each other, and the first to swerve is the “loser.” If neither swerves, both will probably die. In the past, such scenarios have been studied to assess the risks posed by great-power rivalries. In the case of the
