Over My Shoulder | Mauldin Economics

Over My Shoulder

Fed has built a thorny central bank divide

November 21, 2014

This was tipped to me earlier today. It's from the FT, a few weeks ago. Read this carefully – one of the more important OMS notes in a while. This fits in with a theme that Worth and I have been hammering on.

“Rather than crafting new dollar safety nets, efforts need to be directed at treating the cause, not the symptoms. The cause of persistent reliance on dollar liquidity is the fact that there are too few comparable international currencies. Most emerging markets currencies in particular cannot be used in international financial transactions. Dollar dependence is thus critical to allow orderly exchanges and balance of payments adjustments. The high number of relatively large economies unable to use their own currency to conduct international transactions has remained a central weakness of the international economy."

Download - Fed_has_built_a_thorny_central_bank_divide_-_FT.com.pdf

Alexander Ineichen: IR&M Update, Nov. 14

November 14, 2014

Been some time since we last looked at Alexander’s Momentum deck. A few warning signs are showing up.

Speed read: US consumer happy (page 23); China off the lows  (page 56); Japan at inflection point (page 58)
Summary: Negative economic bias persists. (page 2)
Top-down: Economic momentum is falling on a global level. (page 3) Leading indicators are stalling. (page 7)
Earnings: Earnings estimates, on a global level, are falling. (page 8) The fall is moderate though. (page 9)
PMIs: Remain above 50 and are stable. (pages 10-11)
Business sentiment: Peaked in April and has been falling ever since. (page 12)
Consumer sentiment: Peaked in June and has been falling ever since. (page 13)
Flation risk: CPI inflation seems to have reversed and is now rising. (page 78)
Financial risk: Financial risk is rising, generally. (page 82)
Sovereign risk: is rising in Latin America. (page 83)

Download - IRM_Update_2014_Nov_14.pdf

Jonathan Tepper: Understanding Volatility

November 5, 2014

My friend (and co-author of the last two books) Jonathan Tepper of Variant Perception in London has given me permission to forward two of his recent major research pieces, which are quite useful to help our broader understanding of macro forces. Longer pieces, to be sure, but lots of useful info.

The first piece is attached here; the second is in the following email.

Download - Understanding_Volatility_-_August_2014.pdf