It’s a behavioral shift, one we’ve seen before. Misunderstood because of idiocy like QE, even those who’ve undergone the change fail to appreciate the deeper meaning behind it. Not just at the firm-level, more so systemically. GFC1 had left everyone, even the best of businesses, essentially stranded fighting for their lives. Lost revenue was secondary to daily survival.Liquidity.Among the grandest [...]
These numbers do seem epic, don’t they? It’s hard to ignore when you have the greatest percentage increase in the history of a major economic account. Just writing that sentence it’s difficult to deny the power of those words. Which is precisely the point: we already know ahead of time how the biggest economic holes in history are going to [...]
Here they are again, seemingly at odds over how to proceed. Reminiscent of prior battles over whether to revive the economy or just let it go where it will, it appears as if China is in for Xi vs. Li Round 2. Or is it all just clever politics?Li Keqiang may be nominally the Chinese Premier but he’s a very [...]
The Chinese are well past their trough, so there may be some meaningful interpretations for us to take from their data. Then again, we already know there’s not much there from China’s trade figures. Exercise caution, in other words.One key reason why is that China’s going to get hit with a second wave. Virus outbreak maybe, economic disruption definitely. The [...]
Technically, by showing one decimal place maybe this doesn’t exactly qualify. Then again, I was only half serious. When Mexico’s government reported earlier this week that auto production fell by almost 100% in April, I wrote it was suggestive of the great possibly lingering difficulties being forecast for the other side of this economic dislocation. Automakers, basically, aren’t buying the [...]
The monetary mouse. After years of Mario Draghi claiming everything under the sun available with the help of QE and the like, Christine Lagarde came in to the job talking a much different approach. Suddenly, chastened, Europe’s central bank needed assistance. So much for “do whatever it takes.”They did it – and it didn’t take.Lagarde’s outreach was simply an act [...]
Trading partners like Mexico didn’t have a labor participation problem by which to hide the economic downturn last year. The whole idea of “decoupling” in the 2018 sense of the word was how the US economy, by virtue of its 50-year low unemployment rate, couldn’t possibly be as weak as it increasingly appeared overseas. The US was good, they kept [...]
The Japanese went ahead with it anyway. Real GDP had bounced back, sort of, from a near recession in 2018. Central bankers at the Bank of Japan had reassured Shinzo Abe that the economy was on the mend. Therefore, the second round of the VAT tax hike, an imposition which had been postponed since 2015, could go ahead in 2019. [...]
Questioning the veracity of Chinese estimates (for anything) has always been something of an amateur sport. For a stat like real GDP, everyone “knows” that it is managed. In a complex world where an economic system for a billion and a half is incomprehensibly unpredictable, there’s really no other way to always hit your government’s mark (unless the Chinese are [...]
What’s going on right now in the global economy is mostly the first of two pieces. Waves, if you like. The economic shutdown is an artificial dislocation, a non-economic factor that is interrupting regular activity and business for non-economic reasons. Because it is near-total in most places, this first piece is going to produce ridiculous numbers across all the economic [...]
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