Economic activity is on track to post much slower growth rate in this year’s first quarter, based on preliminary estimates for gross domestic product (GDP).
Monthly Archives: February 2022
Macro Briefing: 15 February 2022
* Kremlin talks up softer tone on Ukraine crisis
* German Chancellor in Moscow today to avert Ukraine war via talks with Putin
* Japan’s economic growth rebounded in Q4
* Fed’s Bullard: central bank needs to ‘front load’ rate hikes
* Is there still a case for investing in emerging markets? Maybe not
* China central bank expected to cut rates in coming months
* Intel expected to acquire Tower Semiconductor for $5.4 billion
* US inflation outlook slips for first time since Oct via NY Fed consumer survey:
Commodities Continued Rising Last Week, Topping Global Markets
A broad measure of commodities continued rising last week, delivering the strongest performance by far for the major asset classes, based on a set of ETFs for trading through Friday’s close (Feb. 11).
Macro Briefing: 14 February 2022
* German Chancellor visits Ukraine as anxiety of Russian invasion increases
* Ukraine calls for meeting with Russia to avert war
* A key US-Canada border crossing reopens after trucker blockade is cleared
* Russia’s invasion threat of Ukraine is pushing oil prices near $100 a barrel
* Perfect storm of rising demand and low supplies lifting commodities prices
* Will Fed’s increased focus on fighting lead to a US recession?
* Has Big Tech peaked as an investment theme?
* US consumer sentiment fell to 10yr low in February:
Book Bits: 12 February 2022
David Orrell
Summary via publisher (Icon Books)
Money has many apparently magical properties. It can be created out of the void – and vanish without so much as a puff of smoke. It can flash through space. It can grow without limit. And it can blow up without warning. David Orrell argues that the emerging discipline of quantum economics, of which he is at the forefront, is the key to shattering the illusions that prevent us from understanding money’s true nature. In this colourful tour of the history, philosophy and mathematics of money, Orrell demonstrates how everything makes much more sense when we replace our classical economic models with ones based on quantum probability – and reveals the explosive reality of what is left once the illusions are stripped away.
Research Review | 11 February 2022 | Financial Crises
Financial Cycles – Early Warning Indicators of Banking Crises?
Sally Chen (Bank for Int’l Settlements) and Katsiaryna Svirydzenka (IMF)
April 2021
Can the upturns and downturns in financial variables serve as early warning indicators of banking crises? Using data from 59 advanced and emerging economies, we show that financial overheating can be detected in real time. Equity prices and output gap are the best leading indicators in advanced markets; in emerging markets, these are equity and property prices and credit gap. Moreover, aggregating this information flags financial crisis many years before the crisis. Lastly, we find that the length of financial cycles is of medium-term frequency, calling into question the longer frequency widely used in the estimation of countercyclical capital buffers.
Macro Briefing: 11 February 2022
* Biden advises US citizens to immediately leave Ukraine as Russia threat lurks
* Canadian trucker protests disrupt US auto factories
* Jobless claims in US fell again last week, sliding for third straight week
* Fed funds futures pricing in high odds of a 50-basis-point rate hike in March
* US consumer inflation rose faster than expected in Jan, reaching 40-year high
* 10-year Treasury yield tops 2.0% for first time since July 2019:
Is Recession The Only Cure For Inflation?
As the Federal Reserve prepares to start raising interest rates, history lurks in the background amid an inflation surge that’s remained more persistent than expected.
Macro Briefing: 10 February 2022
* Fed’s Mester says each policy meeting ‘in play’ for rate hikes this year
* Russia says it will begin 10 days of military exercises with neighbor Belarus
* White House rolls out $5 billion plan to fund electric vehicle chargers
* Did US payrolls really increase in January? Maybe not
* Supply-chain issues take a toll on the renewable energy industry
* Disney’s earnings rebound amid growth in streaming service and theme parks
* US 10yr-2yr Treasury yield spread slips to smallest gap in well over a year:
As The Fed Prepares To Raise Rates, Beware The Feedback Loop
The playing field is riddled with imperfect information in real time, long response lags, unclear relationships between economic and financial variables, and a hefty dose of uncertainty linked to behavioral risk. Throw in a high degree of geopolitical risk at the moment vis-a-vis the Ukraine crisis for good measure. Modeling how all this interacts in the months ahead for purposes of setting monetary policy is like trying to grasp all the possible moves in a game of chess.