Via Ray Dalio of Bridgewater: What is Universal Basic Income (UBI)? In general, UBI is a type of cash transfer that is: Universal: every citizen receives the transfer regardless of employment status or income. Unconditional: recipients have no restrictions on how they can spend the cash. Basic: the amount will cover “basic needs” and will constitute
Via Moody’s: Financial markets believe that the U.S. is likely to fare better than most other major economies in an allout trade war. This is because (i) international trade accounts for a smaller share of U.S. business activity, (ii) the U.S. imports far more than it exports, and (iii) the U.S. now well outperforms other
Via The Australian: Donald Trump created “utter panic’’ among NATO allies — who have agreed to pay more, and on a quicker timeline — after he warned the US could withdraw from the organisation in January if other wealthy countries did not immediately increase their spending on defence to 2 per cent of gross domestic
Via Bloomie: After the U.S. unveiled a list of Chinese imports worth $200 billion that could face higher duties, China’s Vice Minister of Commerce Wang Shouwen called on his U.S. counterparts to resolve the conflict through a new round of bilateral negotiations. While that came amid fresh threats of retaliationfrom Beijing, it matches a willingness from
Via Bloomie today: U.S. President Donald Trump’s assault on China’s trade policies will garner several high-profile advocates on Wednesday, as some of the world’s largest commercial regions will meet in Geneva to thresh out the ramifications of Beijing’s entrance into the World Trade Organization 17 years ago. Chinese representatives will say things are going well and that the
Alan Kohler has tackled the trade war: President Trump has declared that America’s trade deficit with China must shrink dramatically, which is the purpose of the tariffs. In fact, he says America’s trade deficit with the whole world — $US43.1bn in May — must shrink, because it means the United States is losing. He thinks trade deficit
Via Bloomie: President Donald Trump threatened to impose tariffs on every single Chinese import into America as the world’s two largest economies exchanged the first blows in a trade war that isn’t set to end anytime soon. After months of rhetoric, a 25 percent levy on $34 billion of Chinese goods entering the U.S. took effect just
Recall that China has tried to play Europe for the chump, via Reuters: China is putting pressure on the European Union to issue a strong joint statement against President Donald Trump’s trade policies at a summit later this month but is facing resistance, European officials said. In meetings in Brussels, Berlin and Beijing, senior Chinese officials, including
Via Morgan Stanley: We no longer doubt that the US administration’s proposals signal the direction of trade policy. An escalatory cycle of protectionist actions, not just rhetoric, has begun and will continue. It’s another reason why pressure should continue in risk markets, which now must eat their US policy vegetables after feasting on dessert in
OK, so the rhetoric of trade war is heating up fast. And it’s not all talk. The US is about to impose tens of billions in tariffs on China. With hundreds of billions more in the pipeline. China meanwhile is crashing the yuan and preparing the troops, via Bloomie: President Xi Jinping presided over a
The Trump Administration effort in reversing thirty plus years of free trade negotiations in less than 12 months via the use of tariffs and trade restrictions is still reverberating around the globe. Like a lot of Trumpian antics, there is some truth to the matter, because during those decades, the United States middle and working
Via the always good value Tim Duy at Fed Watch: Headlines blared the latest recession warning today, this time from David Rosenberg of Gluskin Sheff & Associates. The culprit will be the Fed: “Cycles die, and you know how they die?” Rosenberg told the Inside ETFs Canada conference in Montreal on Thursday. “Because the Fed puts
At times I have agreed with Horseman Global (known by the some as the world’s most bearish hedge fund) but not today: One of the most dangerous things to happen in financial markets is to be right for the wrong reasons. If you fail to recognize that you were lucky, then you will continue to
It’s pretty obvious that there can only be one winner. Surplus nations do not benefit from trade wars. They are the reason for them in the first place. China will lose. But the important question for investors is how will it lose? President Trump has done a very nice job of wedging Xi Jinping now
Satyajit Das at Domainfax: Several factors could lead to a dangerous shortage of liquidity in the event of a crisis. First, since 2009, low interest rates have driven investors into riskier, less liquid assets in search of return. These include longer-dated securities, corporate bonds and emerging-market issues — frequently of low credit quality — as
Some from Bloomberg: “Here we are doing something that almost seems like a suicide mission,” Gundlach said in a webcast discussing his DoubleLine Total Return Bond Fund. “We are increasing the the size of the deficit while we’re raising interest rates.” …”It’s pretty much unprecedented that we’re seeing this level debt expansion so late in
Via Vimal Gor at Pendal (formerly BT): Well that was certainly fun. Over recent months we have been making the strong case that as a result of the normalisation of global monetary policy, global liquidity will recede and market volatility will rise. Well it certainly did in May as Italian yields puked and the global
By Leith van Onselen While the Turnbull Government and the Business Council of Australia (BCA) continue to insist that reducing the company tax rate is essential to fuel investment, jobs and wages growth, evidence of the impact from the recent US corporate tax cuts to 21% from 35% continues to disappoint, fuelling little more than
By Leith van Onselen 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 December quarter of 2017. As you can see, Switzerland (128%)
Australia Australia – temporary visas Declines in 457 visa numbers Australian National Minimum Wage Increases Australia – Average and Median Incomes Australia – Capex Australia – Capex by State Australia – changes in dwelling values Australia – share of dwellings by price growth Australia – Sydney
It’s obvious that Australia’s mass immigration program is a giant scam perpetrated by the politico-housing complex. But it is an interesting thought experiment to treat is as considered macro policy versus the alternatives. So let’s do it. In 2011 Australia joined the secular stagnation that now rules unchallenged across developed economies worldwide. This malady is
DXY soared to new highs last night EUR was hammered: The EUR/USD chart is a giant declining channel that has abundant room to go lower: AUD was hit: EMs harder still: Gold fell: Base metals too: London and US markets were closed so big miners are unchanged: EM stocks held on but that charts says
EUR sank Friday night and DXY hit new highs: Hilariously, the market remains spectacularly long EUR meaning much more selling pressure ahead: AUD was soft against the tearaway USD: But not as soft as EMs: AUD CFTC shorts pulled back a touch to -23k: Gold held on and may have found a friend in Italexit:
EUR rallied last night and DXY fell: AUD ran around on the spot: But EMs fell: Gold bounced on renewed Korean tensions: Oil fell: And base metals: Plus big miners: EM stocks are still in trouble: Junk too: Treasuries were gobbled up: And bunds (Italian yields were flat): Stocks were soft: Why anyone would want
I’m sometimes skeptical of Ambrose Evans-Pritchard. His bearishness is so relentless and florid that it’s hard to keep up. But every so often he scribbles such a ripping piece that it is impossible to ignore. To wit, from The Telegraph comes Italexit: The EU’s gendarmes are now eyeing Italy’s rebel coalition with professional curiosity. This
The DXY/EUR two-step reversed last night: But AUD fell anyway: Even as EM’s poured it on: Gold is still holding: Oil fell a little: Base metals mostly lifted: Big miners were mixed: EM stocks got a little bid: With junk: Treasuries were sold: Bunds too as Italian yields fell: Stocks were mixed: US data was
By Leith van Onselen The International Monetary Fund (IMF) has released a new “cutting-edge dataset” measuring private and public debt across the global economy since the 1950s. Below are the key findings from this report: The first observation is that, almost a decade after the collapse of Lehman Brothers, global debt, at $164 trillion—or about
Via the FT: The US has stepped back from the brink of a trade war with China after Washington halted plans to impose tariffs on up to $150bn of imports, according to the US Treasury secretary. “We’re putting the trade war on hold,” Steven Mnuchin said in a television interview on Sunday. The declaration from
DXY roared again Friday night as EUR fell decisively below 1.18: EUR positioning remains hilariously long setting us up for a higher DXY yet: AUD hung on against DMs: As the market moved to moderately short last week. CFTC net positions are -23.1k contracts versus -16.8k last week: A stable AUD launched against crashing EMs:
By Leith van Onselen Back in the early-1930s, renowned economist, John Maynard Keynes, predicted that technical innovations and rising productivity would mean that advanced country workers would be able to work only 15 hours a week and still enjoy rising living standards. Back in 2013, David Graeber achieved international notoriety when he penned a highly amusing,
