Global Economy

Buried Beneath The Headlines...

"This morning’s big news is the Chinese announcement they would they would buy more US Treasuries as the Yuan stabilizes. Although the knee jerk market response was to take US Treasuries higher, I wonder if traders are misinterpreting the news."

Frontrunning: June 5

  • Saudis, U.A.E., Bahrain and Egypt Cut Ties With Qatar (WSJ)
  • Saudi-Led Alliance Cuts Ties With Qatar (BBG)
  • Saudi, Egypt lead Arab states cutting Qatar ties, Iran blames Trump (Reuters); Qatar asks citizens to leave UAE within 14 days: embassy (Reuters)
  • London Fortifies Bridges to Protect Pedestrians From Attack (BBG)
  • Bank at Center of U.S. Inquiry Projects Russian ‘Soft Power’ (NYT)

Qatar Crashes In Escalating Gulf Crisis; Oil Fails To Rebound As Global Stocks Dip

S&P futures point to a slightly lower open ahead of today's US non-mfg ISM and Service PMI data. European shares fall, while Asian shares are little changed. Several European countries are closed for Whit Monday leading to subdued trading. Following the latest unexpected Gulf Crisis overnight, in which Gulf nations cut all diplomatic relations with Qatar amid stunning allegations of funding terrorism, oil spiked but has since pared almost all gains.

Studying The Climate Doesn't Make You An Expert On Economics And Politics

"... in the imaginary world of physicists and climate scientists who can't comprehend the complicated realities of economics and public policy, simply wishing something to be so makes it so. If we just wish really hard that all our problems are solved, surely the good people in government will make it happen."

Projecting The Price Of Bitcoin

The Network Effect can become geometric/exponential very quickly...The wild card in cryptocurrencies is the role of Big Institutional Money.

The Keynesian Cult Has Failed: "Emergency" Stimulus Is Now Permanent

What do we call a status quo in which "emergency measures" have become permanent props? A failure. The "emergency" responses to the Global Financial Meltdown of 2008-09 are, eight years on, permanent fixtures. Everyone knows what would happen if the deficit spending, money-printing, zero interest rates, shadow banking, asset purchases by central banks and all the rest of the Keynesian Cult's program stopped: the status quo falls apart.

Trader "Appalled" At Market Reaction To Manchester Bombing "There's More To Life Than Next Few Basis Points"

"...the market reaction to the bombing in Manchester was appalling. And an indictment of a system that rewards, time and again, through official reaction functions, utter callousness and obliviousness to events... Look around you. It’s high time central bankers, politicians and, even, investors realized that there’s more to the world than the next few basis points."