Emerging Markets

As Brent crude hits 11-year lows, it’s worth thinking about why it is so low and what the likely outcomes will be. Warren Mosler has a view I think works regarding the Saudis as swing producer, targeting quantity instead of price and I want…

Back in January, I said that as far as bond markets go, the convergence to zero would be a dominant issue as the deflationary macro environment made it difficult to raise interest rates. The US is trying to buck this trend, but in doing so,…

I don’t believe the jobs report today is indicative of an improving US economy. I believe it is a one-off that is so strong that it will be difficult for the Fed to overlook it. And this makes the likelihood of rate hikes that much greater,…

With two recent Fed governors - Tarullo and Brainard - expressing a need for caution with normalizing Fed policy, I wanted to break down how I tend to think about monetary policy and its affect on resource allocation and private portfolio…

Germany is a very open economy given its size, with exports at 45.6% of GDP compared to less than 14% for the United States. This makes Germany more vulnerable than most to the global growth slowdown, especially given its recent turn to…

Today, we got a pretty shaky US jobs report. Non-Farm Payrolls were up only 142,000, well below the 190-203,000 range of median expectations I have seen quoted. But the previous month was also revised down to 136,000 from 173,000 and July…

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…

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…

For several months now, I have been hearing stories about the risk of capital flight and capital outflows out of China. At the same time, perhaps as a result of these outflows, traders have recently been trading CNY/USD at the upper end of…

I know the title of this post has a somewhat alarmist feel to it. However, I think it is the title that best describes the biggest macro theme now unfolding in the global economy. I have been in Grand Canyon country in the southwest of the…