Global Macro

By Leith van Onselen Nobel laureate, Steven Chu, has warned that the global economy is on an unsustainable footing, reliant on an ever-increasing population which he described as a population “pyramid” or “ponzi” scheme.

Readers will know I always take Ambrose Evans-Pritchard with a big grain of salt. But today he is onto something is an examination of the current dynamics in the global economy: The benefit of Donald Trump’s $US1 trillion ($1.4 trillion) fiscal stimulus is fading before China comes close to touching bottom.

Via Capital Economics: A recent paper by Larry Summers and Lukasz Rachel has been doing the rounds among economists and has revived debate in financial markets about “secular stagnation”.

Via Steen Jakobsen at Saxobank: Last night’s FOMC meeting made it official: the Fed has thrown in the towel, and central banks are committed to defying the business cycle.

Via Capital Economics: We seem to be moving towards an agreement between the US and China on trade.

There is one big difference between the global and local slowdowns right now.

By Leith van Onselen The Australian’s Judith Sloan has done a terrific job tearing apart the theme of the 2019 World Economic Forum (WEF) in Davos: “Globalisation 4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution”.

by Chris Becker As the world’s elite – besides Donald Trump who is holed up in his McMansion – descend upon Davos for the World Economic Forum, the IMF is out with an update to its growth forecasts.

Via Damien Boey of Credit Suisse: Momentum investing is based on the idea that tomorrow’s winners and losers will resemble yesterday’s winners and losers on average, whether on 12-month total return, or 3-month earnings revision bases.

By Leith van Onselen The Teranet-National Bank House Price Index for December has been released, which reported a third consecutive monthly decline in home values: The Teranet–National Bank National Composite House Price IndexTM for December was down 0.3% from the previous month.

By Leith van Onselen After spending a decade worrying about the rise of Japan, economists (and population boosters) in Australia have frequently labelled Japan an ‘economic basket case’ due to its ageing (and falling) population and its slow growth in headline GDP.

By Leith van Onselen After vigorously opposing the Trans-Pacific Partnership (TPP) in the lead-up to the 2016 Presidential Election, the Trump Administration appears to be having second thoughts.

Via Damien Boey as Credit Suisse: In recent articles, we have talked about the tail risks from central bank balance sheet reduction globally.

by Chris Becker Following on from the dreadful German industrial production print overnight, there’s more signs that the global growth machine is sputtering.

by Chris Becker At the end of March this year, or in less than 90 days, the UK is set to leave the European Union.

From Moodys: The world is now incapable of shouldering a 10-year Treasury yield above 3%.

by Chris Becker Just in time for the New Year crash, here comes some stellar news from the IMF (my emphasis added): Global debt has reached an all-time high of $184 trillion in nominal terms, the equivalent of 225 percent of GDP in 2017.

by Chris Becker Got to hand it to the GOP, they know how to spoil a party.

by Chris Becker Looks like we’re reliving the GFC all over again with interconnectedness so high that global currency and stock markets are going to crash because some single Chinese youths are not buying as many iPhones as they should.

Via Capital Economics: The conventional view of the long-term prospects for the global economy can be summarised as: EMs good, DMs bad.