The way the global economy shifted from globally synchronized growth to globally synchronized downturn was specific: dollar then trade then manufacturing and industry which then spread into other areas. If the economy is to avoid moving further down that same track, then something in that chain of events must actually change. Meaning just that: actual change in the way the [...]
Note: originally published Friday, Nov 1 There wasn’t much by way of the ISM’s Manufacturing PMI to allay fears of recession. Much like the payroll numbers, an uncolored analysis of them, anyway, there was far more bad than good. For the month of October 2019, the index rose slightly from September’s decade low. At 48.3, it was up just half [...]
It’s not that they are different types, these are only differences in time and timing. As I wrote yesterday, the US economy is on the same spectrum following in behind Europe’s lengthy head start. American Industrial Production peaked a year later and only now has turned negative year-over-year, while European Industrial Production peaked way back at the end of 2017 [...]
What if Germany’s economy falls into recession? Unlike, say, Argentina, you can’t so easily dismiss German struggles as an exclusive product of German factors. One of the most orderly and efficient systems in Europe and all the world, when Germany begins to struggle it raises immediate questions about everywhere else. This was the scenario increasingly considered over the second half [...]
At last week’s ECB’s press conference, the central bank’s President Mario Draghi was both downbeat and upbeat. As to the former, he acknowledged that Europe’s economy wasn’t working out the way they’d all hoped (and repeatedly promised). Despite the disappointment, Draghi wasn’t completely deterred. This growth scare wasn’t really European, he said. China, trade, and a bunch of other things [...]
We're changing the format on our Macro updates, breaking the report into two parts. This is part one, a review of the data released the previous month with charts to highlight the ones we deem important. We'll post another one next week that will be more commentary and the market based indicators we use to monitor recession risk. We are [...]
These things are all related, not that they are in any way connected by conventional thoughts on the subject of the global economy. Two European officials are now on record hinting at an ECB “pause.” There is one already underway in the US, Federal Reserve officials past and present debating how long it might last while markets price probabilities for [...]
It is time to start paying attention to PMI’s again, some of them. There are those like the ISM’s Manufacturing Index which remains off in a world of its own. The version of the goods economy suggested by this one index is very different than almost every other. It skyrocketed in late summer last year way out of line (highest [...]
Loreley Rock near Sankt Goarshausen sits at a narrow curve on the Rhine River in Germany. The shape of the bluff produces a faint echo in the wind, supposedly the last whispers of a beautiful maiden who threw herself from it in despair once spurned by her paramour. She was transformed into a siren, legend says, a tantalizing wail which [...]
The one thing the globally synchronized growth narrative had going for it was sentiment. It often had that in surplus. But therein lies a major drawback; are people happy because things are getting better, or do they believe things are getting better because “everyone” says so? There’s a difference and it’s a big one. And it may not matter much [...]
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