The idea that China was transitioning to a “consumer led” economy was always a precarious wish. Doubts start with the timing, as it wasn’t until 2009 that it was even proposed, but the idea really didn’t gain any traction until after 2012. In other words, the only time Chinese consumers were ever given much thought was when industry was facing [...]
The PBOC’s balance sheet was relatively quiet in February, with no large moves on either side of its ledger. In fact, these minor shifts appeared to be more so adjustments than the more extreme efforts the central bank had become used to undertaking. The heavy lifting was accomplished in January at least as far was what is visible, leaving February’s [...]
If China is most representative of the current state of the “dollar” economy, Brazil is surely most representative of its worst case. The country’s economy has been like China in slowing down steadily over the past few years, but unlike China it has descended already into a nightmarish level of distress. In other words, Brazil already has a Great Recession [...]
The Central Bank of Egypt auctioned $200 million at 8.85 per Egyptian pound rather than the prevailing 7.73. The inflationary move of devaluation is intended to help the country gain a more solid financial background due to a persisting “dollar shortage” that nobody seems to hold in much curiosity. Despite the fact that this is a widespread and growing problem, [...]
There is an ongoing mess in repo markets and not a lot of straightforward commentary about it. As usual, whenever any repo tenor trades highly special we hear only about the persistence and plethora of shorts betting on rate normalization. Since rates, overall, have done only the opposite going back to June 2014 and the start of this repo mess [...]
Crude oil prices in the US have jumped back up to above $38 again, leading various financial correlations toward much less depressing interpretations (chiefly stocks). That in turn has allowed the proliferation of the “it’s all over” narrative despite fundamental accounts that continue to suggest otherwise. Being the sharpest rally in WTI since really last April, these reflections appear to [...]
Part 1 is here. Even if the eurodollar paradigm had started shifting long before the full panic, this is not to say that various individual firms have not tried to rekindle the former construction; in fact, I have paid particular attention to those who at various points attempted the recreation. Citigroup is one of those though it isn’t clear what [...]
Proprietary trading has taken on connotations that are extreme for some good reason owing to the events of 2008. It was there, called “principal transactions” on some balance sheets, that claimed the majority of accounting losses that perpetuated internecine banking struggles from liquidity to revenue and earnings. As with most things, there was much more to it than that rough [...]
During the global end of the Great Recession, Brazilian GDP contracted year-over-year in just three quarters. The worst was about -2.5% in Q1 2009, but by Q1 2010 GDP was rising 9% again. With the latest update today, Brazil’s GDP declined by just less than 6% year-over-year in Q4, representing the seventh consecutive contraction that doesn’t look to be ending [...]
JP Morgan reported late last month that its total exposure to oil & gas credit (directly on its books, I would assume) is $44 billion, or which $19 billion is currently rated junk. There was no update as to junk or junk-like corporates beyond energy, which in the end might be the more pressing concern. The old joke is that [...]
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