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Boehner departure means government shutdown more likely, default a possibility
John Boehner is not conservative enough. At least that's what the firebrand Republicans in the US House of Representatives believe. And so he has resigned from his position as Speaker of the House and will resign Congress altogether as…
Quick thoughts on recent macro news: China, Brazil, US
Now that I am writing for free again, let me give you a quick update on what I'm thinking about. I still think the removal of China as a marginal buyer of last resort is the macro event that dominates all others. But there are a few…
Credit Writedowns is ending paid subscriptions for now
For nearly four years now, Credit Writedowns has been run using a freemium model, with most of the content behind a firewall. But over the past two years, the amount of time I have been able to devote to the blog and newsletter has…
Willem Buiter, monetary dominance and the convergence to zero
I have still yet to get my hands on Willem Buiter’s recent research piece about his proposed China-led global recession. However, I have since seen snippets of the piece and have heard what he has to say about it. And frankly, he makes a…
The strong dollar, the carry trade and market volatility
I have been meaning to write this post for a few days. And as the information comes in from Brazil, from China, from equity markets, it seems all the more compelling that this is indeed an important period in market and economic history. I…
If we don’t understand both sides of China’s balance sheet, we understand neither
These debt-related shocks will occur regularly for many more years, and each shock will advance or retard the rebalancing process so that it affects the way future shocks occur. There are only a few broad paths along which the Chinese…
The Chinese currency crisis: a mental model on catalysts, contagion and vulnerability
Many markets have now recovered from the initial wave of selling associated with the Chinese mini-devaluation catalyst. This should be expected. Some of these markets will surely continue higher. Nevertheless, the Chinese devaluation still…
Chinese devaluation crisis has limited US impact so far
My base case is that the US stock market correction will not extend to major losses without a U.S.-based economic slowdown. Therefore, as potent as the Chinese devaluation crisis is as a signal for increasing global deflationary pressures,…
The Chinese currency devaluation is now a crisis
After hard selling into Friday’s close in the U.S. and a global selloff in stocks today, it is clear that the Chinese mini-devaluation has begun a crisis, despite the Yuan appreciating for a seventh day. The mini-devaluation is merely a…
Chinese currency and US monetary policy as the deflationary environment continues
The macro environment right now is disinflationary as many countries struggle with product and labour ‘overcapacity’. The missing element is demand to meet supply. I want to talk about Fed monetary policy and the new Chinese currency regime…