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Over My Shoulder

Jawad Mian: Stray Reflections—November 2014

November 25, 2014

Oil is in a bit of a bind. I am reading more and more about peak demand, not peak supply. Here at Mauldin Economics we are soon going to be introducing you to a new, young macro writer from Dubai named Jawad Mian, who is  wicked brilliant. Here is his latest monthly, on oil, which starts off and ends with some personal reflections. This is a name you are going to want to remember.

Download - Stray%2BReflections%2B-%2B1114.pdf

Alexander Ineichen: IR&M Flash Update, Nov. 24

November 24, 2014

Flash update summary

Global economy: Overall, average GDP is positive and stable at around 2.1%. Japan is in recession. (page 1)
Industry production: US surprises negatively. (page 2)
PMI: Preliminary PMIs were reasonably stable and above 50 on average. (pages 3-4)
Business sentiment: Business sentiment has reversed and is now positive. (page 5)
Europe: Europe is approaching resistance, not from Putin, but from 350 level. (page 6)
Eurozone: Minor uptick, but no reversal of negative trend. (page 7)
Germany: Ditto. (pages 8-9)
Switzerland: Ditto. (page 10)
Financial risk: Financial risk has risen. Macro risk remains elevated and skew in index options is very high. (page 11)

Download - IRM_Flash_Update_2014_Nov_24.pdf

Alexander Ineichen: IR&M Momentum Monitor, Nov. 24

November 24, 2014

From Ineichen. Global momentum is turning over slowly.

Momentum monitor summary

Main take-away: Long-term trend for MSCI World remains negative despite Friday’s melt-up.
Equities: Long-term momentum in most regional equity indices is negative. (page 2)
Bonds: Long-term momentum in most global bond indices is negative. (page 2)
Sectors: There were six changes in long-term momentum, four positive (Italian consumer discretionary, and European, French and Spanish telecom) and two negative (European and Spanish financials). (page 3)
Earnings: Earnings momentum remains negative. (page 4)

Download - IRM_Momentum_Monitor_2014_Nov_24.pdf

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