By Leith van Onselen In May, the International Monetary Fund (IMF) released a new “cutting-edge dataset” measuring private and public debt across the global economy since the 1950s, which showed that the world had hit peak debt: The first observation is that, almost a decade after the collapse of Lehman Brothers, global debt, at $164
Via CNBC comes rumours of the death of the West being greatly exaggerated: President Donald Trump on Wednesday said the United States and the European Union had launched a “new phase” in their relationship, saying that the two major economies would start negotiations immediately on a number of areas including working toward “zero tariffs” on industrial goods
By Leith van Onselen BBC News has published a fascinating report on how young Norwegians have enjoyed a 13% rise in disposable household income while their counterparts in other nations are going backwards, thanks largely to the nation’s Sovereign Wealth Fund (SWF), which saved the bounty of its oil and gas boom: Best known for
Via Goldman: The tariff impact on S&P 500 EPS through lower revenues is minimal. S&P 500 firms derive just 2% of aggregate sales explicitly from China. Even a global trade war where every country imposes a 5% tariff on all trading partners would have a muted revenue impact. Our economists estimate the demand-side effects of such
Definitely. At the AFR: Treasurer Scott Morrison has warned the deepening US tariff war with China could derail a global economy that has finally shaken off the effects of the financial crisis and has directly challenged Donald Trump’s view that countries can win trade wars. As the International Monetary Fund described the US as among
By Leith van Onselen Back in March, job search website Adzuna estimated that around one-third Australian jobs could be lost to automation by 2030, with lower-skilled and manual labour jobs most at risk. Now, a new collaboration study between Marsh & McLennan’s Global Risk Centre, Mercer, and Oliver Wyman, estimates that Australian workers, like other nations,
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
