The-big-picture, global economic developments.
It’s been a while since I’ve put up the charts I’m watching, and there is hence quite a virtual pile. The first pair (like many others from dshort.com) shows the breakdown in diversification benefits in the past year. Correlations tend to trend to one just when you need them to be low…
like in October 2007.
We’re [...]
I was reminded this morning that one of the much under-appreciated aspects of the credit crisis and resulting bailouts is the innovation in information display as people try and make sense of it. I am collecting these attempts as they appear, so might as well share them before they are out of date.
First up, the [...]
I haven’t done a graphics post in some time, but the following chart of the civilian employment to population ratio really caught my eye. This is not looking good at all.
Without a major economic stimulus plan, “the shortfall in the nation’s output relative to its potential would be the largest — in terms of both length and depth — since the Depression of the 1930s,” said new CBO Director Douglas Elmendorf in testimony prepared for the House Budget Committee.
“Very simplistically, it is a [...]
At last the Dodo said, ‘everybody has won, and all must have prizes.’
‘But who is to give the prizes?’ quite a chorus of voices asked.
‘Why, she, of course,’ said the Dodo, pointing to Alice with one finger…
Lewis Carroll – Alice’s Adventures in Wonderland [1865]
I’ve taken a step back from [...]
I’m trying to understand how the global financial system is likely to evolve from here. This is how the world’s net capital flows ran in 2008:
Countries importing capital: US ($697bn), Spain ($166bn), Italy ($71bn), France ($57bn) Australia ($57bn), Greece (53bn), Turkey ($47bn), and Britain ($46bn).
Countries exporting capital: China ($378bn), Germany ($266bn), [...]
My financial career began in the mid to late 80’s, and while there were distant memories of the 70’s bear market pretty quickly 1987 became the defining market event for the next decade and a half until eclipsed in some markets by the dot-com slump. In the past year the comparisons have shifted steadily backwards [...]
A few important conceptual milestones on the macro front over the past weeks.
First, it’s pretty clear the real economy is now collapsing both due to tight credit as all financial actors deleverage and as a result of a revision in growth expectations such as Keynes wrote so clearly about. Forced liquidity was not enough. An [...]
A week ago the entire family endured the flights from Cuzco to Lima, Lima to Buenos Aires, Buenos Aires to Auckland, and Auckland to Christchurch. 30 hours en route is the time tax we pay in living out here on the edge of the edge; and most of the time it is a worthwhile trade-off.
At [...]
I’m off to the APEC CEO Summit in Lima, Peru and so in a bit of a rush. So I’ll just dump the good stuff that’s crossing my desk this Monday morning without too much editorial.
In short, I’m looking for signs of de-coupling of the real economy from the financial smoke and mirror factories – [...]