Forecasts

Last week, the high yield market seized up, in part due to jitters surrounding a high profile freeze of funds at the Third Avenue Focus Credit fund. The big problem for Third Avenue was energy high yield credit and the contagion from that…

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,…

Ever since Willem Buiter’s call for a global recession within the next two years, people have been parsing the data for some indication that the US has been fatally compromised by contagion from emerging markets. Nothing in Buiter’s piece…

Yesterday I retweeted an interesting tweet by Business Insider’s Henry Blodget which references an article on data compiled by Barclays on profit mean reversion and recession. The gist of the article is that a profits recession generally…

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,…

By Michael Pettis originally written on 31 Jul 2015 I plan to post a new entry very soon but before doing so I wanted to say a few things about the stock markets, which continue to be insane (but not unexpectedly so) and then repost a…

As Q2 continued along, it became ever more evident that private forecasts above 3% annualized were overly optimistic and that the Atlanta Fed’s GDPNow forecast below 1% would get revised up. We met in the middle at 2.3%. What’s more is Q1…

Last week the Fed admitted to having mistakenly made public forecasts by staff economists which suggested that the Fed is indeed on a 2015 rate hike path. As a result, policy divergence is now set to widen, with the result being a bid for…

The most recent retail sales numbers confirm the first quarter dip in GDP as an aberration. The US economy’s growth path, while subpar and uneven, remains on track. Some thoughts below

By Michael Pettis Last week Derek Scissors, a think tank analysts at the American Enterprise Institute, published an article in which he referred to an October, 2014, studyby Credit Suisse that attempts to measure total household wealth by…