Global Macro

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Ray Dalio on universal basic income

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

5

Markets declare US trade war winner

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

26

Is “The West” dead?

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

27

US and China mull new trade talks

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

17

World rounds on China trade cheat

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

18

Trump mulls half a trillion in China tariffs

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

28

Europe isolates China trade cheat

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

8

Where will trade wars end?

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

26

Targeting Trump’s business may backfire

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

3

How far can the US economy run?

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

14

Satyajit Das: Prepare for the next GFC

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

21

Jeff Gundlach’s suicide mission

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

3

Vimal Gor: Emerging market meltdown just started

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

42

Weekend Chartfest 2 – 3 June, 2018

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

10

Is printing money or people the fix for secular stagnation?

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

27

Australia’s worst nightmare is back…another global banking freeze

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

7

A decade after GFC, global debt hits record high

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

11

China/US trade war cancelled

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

36

What sort of ‘bullshit job’ do you have?

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,