Via FTAlphaville comes a point I’ve been making repeatedly myself: The purchasing managers’ indices are among the world’s most closely watched economic indicators, moving markets and provoking policymakers to act. And with good reason. The polls — most of which are compiled by data firm IHS Markit — offer an early sign of how well,
Via Ambrose Evans-Pritchard: The V-shaped recovery in East Asia is sadly no template for the blundering West. The near euphoric rally on global equity markets is based on a fundamental fallacy. Most of Europe and North America are not pursuing the policies that enabled China and the Pacific Rim – with big variations – to
Globally and for the foreseeable future. First it was China where eating out is still down one third nearly three months after reopening: Now the US looks, if anything, even worse, via The Economist: COVID-19 HAS infected every sector of the global economy. But perhaps none has been hit as hard as the restaurant industry.
Via the excellent Damien Boey at Credit Suisse: Welcome to the world of excess liquidity. World excess liquidity is defined as the the ratio of money supply to nominal output, aggregated across economies. It is a widely used concept that gets toward the idea of scarcity—too much money chasing too few goods. Monetarists, who view the world
The Economic Policy Institute has released research showing that the United States’ temporary skilled visa scheme (H1B) has been used by employers to undercut local workers’ wages. The analysis is based upon the Department of Labor’s Occupational Employment Statistics (OES) survey, which constructs a distribution of wages for each occupation in a specific geographic location. The
One of the reasons for the Nasdaq outperformance in recent weeks has been that its demand has held up versus wider business owing to the great decentralisation. This was a once-off tech build-out as the entire world outfitted home offices. Just visit your local Officeworks to see it in action. South Korean exports are a
Via FTAlpahville: The output gap is a concept we got familiar with during the global financial crisis. But it’s time to revisit it, in some detail. One reason the measure often gets overlooked in mainstream headlines is because it doesn’t sound all that consequential. Yet it is. Arguably more so than ever. Encumbering its popularity,
From Gilead: Gilead Announces Results From Phase 3 Trial of Investigational Antiviral Remdesivir in Patients With Severe COVID-19 — Study Demonstrates Similar Efficacy with 5- and 10-Day Dosing Durations of Remdesivir — FOSTER CITY, Calif.–(BUSINESS WIRE)–Apr. 29, 2020– Gilead Sciences, Inc. (Nasdaq: GILD) today announced topline results from the open-label, Phase 3 SIMPLE trial evaluating 5-day and
Via Nouriel Roubini: After the 2007-09 financial crisis, the imbalances and risks pervading the global economy were exacerbated by policy mistakes. So, rather than address the structural problems that the financial collapse and ensuing recession revealed, governments mostly kicked the can down the road, creating major downside risks that made another crisis inevitable. And now that it has
Via China’s NBS: 1 – 3 months, the national scale industrial enterprises realized a total profit of 7814.5 billion yuan, fell 36.7% (on a comparable basis, see Note II), a decline of more than 1 – 2 narrowed in February 1.6 percent. 1 – 3 months, above-scale industrial enterprises, state-owned holding enterprises realized a total profit of 2226.7 billion yuan, fell 45.5% ; joint-stock enterprises realized a total
Ray Dalio with another of titanic missives: Money, Credit, and Debt. Note: To make this an easier and shorter article to read, I tried to convey the most important points in simple language and bolded them, so you can get the gist of the whole thing in just a few minutes by focusing on what’s in bold.
Via S&P comes a nice report: – Overall. We expect GDP growth for Asia-Pacific to fall to 0.3% in 2020 before a gradual recovery, implying a two-year income loss of over US$2 trillion. In 2020, corporates could see on average 10% to 15% less revenue, and banks may incur over US$400 billion in extra credit
Via the excellent Viktor Schvets at Macquarie: Another question that preoccupies investors is whether we are facing a V or W or U-shaped recovery, and the possibility that what has started as an attack on the P&L might morph into a far more deadly and prolonged balance sheet recession. 1. First, regarding the shape of
One of those bellwether indicators for global demand: I have been wondering how the North Asian electronics supply chain has been holding up. A few visits to my local Officeworks has shown shelves cleared of items for a home office build-out. This may have provided some support for the global tech supply chain of which
Via Zoltan Pozsar at Credit Suisse: The Fed’s liquidity injections are working. Global dollar funding conditions have eased, and U.S. dollar Libor-OIS spreads started to tighten. We don’t think that lower prices on the CPFF or the MMLF are necessary for Libor-OIS to tighten more – other factors can tighten it further. First, positive Libor-Libor
Via the IMF: The world has changed dramatically in the three months since our last update of the World Economic Outlook in January. A rare disaster, a coronavirus pandemic, has resulted in a tragically large number of human lives being lost. As countries implement necessary quarantines and social distancing practices to contain the pandemic, the world has been
Prime Minister Scott Morrison says the World Health Organisation (WHO) must play a key role in ensuring there is not a repeat of the COVID-19 outbreak. Despite there being strong evidence that the outbreak began in a wet market in the Chinese city of Wuhan, the WHO does not support the closure of wet markets.
When a couple of tweets are worth a thousand words… One of the great benefits of Hyman Minsky’s balance-sheet approach to economics is that it forces analysts to consider how the structure of balance sheets can either dissipate or reinforce underlying conditions, and we may get another lesson in this as the economic impact of…
The United States has threatened to pull its funding from the World Health Organization (WHO), claiming that it has been badly corrupted by China. This view has been backed up by Stanford University’s Lanhee J. Chen: The World Health Organization isn’t just “China centric,” as President Trump called it on Tuesday. It is also broken
Because nobody does global diplomacy like the CCP, via The Spectator: China has tried to restore its image after lying to the world about the seriousness of its coronavirus outbreak, but its attempts at humanitarianism have turned out to be as slippery as its wet markets. After COVID-19 made its way to Italy, decimating the
It’s the always stimulus that never dies. The Chinese economic recovery is basically toast, via Capital Economics: With people movement still weak and industry stalled, there is one bright spot as usual: Can an economy survive on empty apartments alone? China is going to find out. The world is not supportive of anything else. Asia
The excellent Adrian Blundell-Wignall addressing MB, I think, at the AFR: I have been surprised at just how negative some economists are about COVID-19. Not so much about the near term, where there is general agreement on the severity of the initial rise in unemployment, but rather about what happens on the “other side”. No
Via Capital Economics, the Chinese industrial recovery has stalled at around 80% capacity: Some better measures for the consumer but the industrial recovery has stalled miles below capacity. It may be that those apartment sales numbers are just stimulus anyway. Asia is now shutting down fast: And Europe: Plus the US: It ain’t pretty.
Arguments around whether to implement harsh lock-down measures to curb the coronavirus’ spread typically centre around the trade-off between protecting human life and the economy. New research from MIT suggests that there is no “trade-off” and that stronger lock-down responses typically generate stronger economies: The study, “Pandemics Depress the Economy, Public Health Interventions Do Not:
In case you missed it, above is a must watch report from 60 Minutes Australia documenting how the Chinese Communist Party (CCP) deliberately hid the severity of the coronavirus outbreak in Wuhan, silenced whistle-blowers and then, via their negligence, exported the virus to the world. Below is also an excellent report on how the coronavirus
Via Bloomie: Relax, eat out and shop. That’s the latest message from the Chinese government to its people, after months of warning them to stay indoors because of the coronavirus. In a bid to jump start consumption that all but disappeared during the outbreak, authorities in some places are distributing vouchers, asking companies to give
We’ve already seen it in Italy, now the UK, via The Tele: Intensive care for coronavirus patients is now being limited to those “reasonably certain” to survive, a major NHS London trust has conceded. A department head at Imperial College Healthcare revealed on Sunday that fewer and fewer marginal patients are being selected for ventilator treatment because so
That it will be a depression is yesterday’s news. What kind then? Greg Jericho kicks us off with some useful musing: Through my lifetime there have been three “worst since the Great Depression” times for the economy – the early 1980s, the early 90s and the global financial crisis. In each case we never really