We are approaching quite a formidable global #debt maturity wall...
Source: Markets & Mayhem, Morgan Stanley
Japan GDP grew 6%, handily beating expectations on robust exports - but domestic demand disappoints
Japan Q2 GDP improves to 1.5% QoQ vs 0.8% expected and 0.1% prior, meaning Japan grows 6.0% on annualized basis, far more than expected (+2.9% yoy). However, some details of the report weren’t as impressive as the headline. As pointed out by analysts in CNBC report, nearly all of the increase in output was driven by a 1.8%-pts boost from net trade. That marked the second-largest contribution from net trade in the 28-year history of the current GDP series, with only the bounce back in exports from the first lockdown at the beginning of the pandemic providing a larger boost. Exports rebounded 3.2% from the previous quarter — largely driven by the spike in car shipments — while imports plunged 4.3% over the time period. Source: Bloomberg, HolgerZ, CNBC
Argentine Peso having a rough day. An 18% devaluation to 350 pesos per dollar (chart) accompanied by a 21 percentage point hike in interest rates to 118% …
Source: Barchart
The countries that have rarely borrowed, such as Brazil or Mexico, often pay much higher interest rates than those that have much higher debt ratios, like Japan or China.
Intriguing chart by Alpine Macro
Comparable countries bounced post-COVID, but US did not
~1 million Americans have died of OD’s just since 2010; that’s more than the # of Americans that died in all wars America has ever fought in. Source: The Economist Via Dan R Dimicco thru Luke Gromen
The clearest signal that Russia is losing this war?
The Russian ruble slid past 100 to the U.S. dollar on Monday, nearing a 17-month low as President Vladimir Putin’s economic advisor blamed loose #monetarypolicy for the rapid depreciation. The ruble has lost around 27% against the greenback since the turn of the year. It also has lost 23% vs Chinese Yuan, which Russia is embracing for trade as it seeks to ditch Western currencies. The Bank of Russia has blamed the country’s shrinking balance of trade, as Russia’s current account surplus fell 85% year on year from January to July. This slide that threatens to stoke inflation in an economy that has been kneecapped by Western sanctions. Source: HolgerZ, Bloomberg, DJ, CNBC
US average mortgage rates just surged above 7.5% for the first time in 23 years
There are some reasons why US house prices haven’t crashed: 1. Buyers can’t afford the rates; 2. Sellers would be insane to sell a home with a significantly lower rate to buy another at 7.5%. Market is frozen. The economy is currently experiencing a significant tightening of financial conditions, largely driven by the persisting fragility in the Treasury market. The bill will come due at some point. Source: Crescat Capital, The Wolf of All Streets
1971 vs NOW
The average U.S. annual income in 1971 paid off a house in ~2.5 years, could buy 3 new cars in a year, send 4 kids to Harvard in a year and easily afford food, shelter, necessities and entertainment. Does the older generation understand the difficulties the young face today? Source: Gabor Gurbacs
