Editor of Speculators Anonymous | book addict; Long chaos, cycles, contrarianism; Short equilibrium, gov intervention, fragility
San Diego, CA
Joined June 2009
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*Emailing out now
Sry if any grammar issues but wanted to get this oil play out ASAP
This play trades at an extremely steep discount to peers and has a great margin of safety (moat + low cost)👇🏻
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French bond yields now match Greeces
Actually, French bond yields are higher than 3-of-4 PIGS nations..
Those countries were forced to reform and deleverage, whereas France didn’t
France's gov. Spending as a % of its economy is to be a whopping ~60% in 2024
Yikes France
The US yield curve via 10yr vs 2yr has finally uninverted (steepened) after 2+ years
Remember, it’s the uninversion that historically signals a recession since it’s the short end that’s being cut amid Fed easing (not steepening from growth/inflation picking up)
Let’s see..
Via the BLS - early revision showed 818,000 fewer jobs in year through March, biggest beg. Revision since 09
That’s around 70k jobs that were overestimated per month.
Also note that 2023 revisions saw there were more job losses than new jobs
Not surprising. Labor is a lag
*China’s loss making industrial firms have exploded as there’s anemic demand in China + over-production
Beijing is subsidizing the losses so that they can keep producing + exporting, preventing the unemployment + slowdown in growth that would follow
Forcing RoW to absorb it
😬
Curious what @michaelxpettis makes of this chart and economist piece (if seen it)
Adem Tumerkan retweeted
🔥 New Week Ahead episode! 🔥
💸 100 bps of Fed rate cuts this year? @econstratPB
⚛️ China’s nuclear power ambitions @@chigrl
💳 US debt crisis & flagging productivity @radicaladem
Watch it here: youtu.be/PIjkCuNKs_0
Adem Tumerkan retweeted
🚨 New Week Ahead episode! 🚨
💸 Fed Cuts: @econstratPB on #Fed cut chatter.
⚛️ China’s #Nuclear Power: @chigrl on global nuclear growth.
💳 America’s #Debt Crisis: @radicaladem on rising delinquencies & productivity.
Watch now! youtu.be/PIjkCuNKs_0
#Economy #Markets #China
*via NY fed - over the last year, approximately 9.1% of credit card balances and 8.0% of auto loan balances transitioned into delinquency (both the main stressors vs student debt and mortgages)
Meanwhile debt keeps rising
This doesn’t include buy not pay later which has surged
The CPI (inflation rate) is roughly 3%, meaning it’s rising slower than before - but the CPI’s up ~22% since 2020 yet nominal wages only 17%
To put that in perspective, b/w 2010-2020, inflation cumulatively grew only 19% yet nominal wages grew 28% (over a whole decade)
Yikes
*China’s macro leverage ratio is now 295% (macro leverage ratio is the total debt of an economy relative to its GDP) w/ most held by local govs (this doesn’t include the other roughly $10T in shadow debt)
Debt is deflationary because longterm $ must be used to pay it off
Hmm
The US ISM Manufacturing Index was a huge dud today
But the labor complement really showed fragility
The ISM Manufacturing Employment index plunged to 43.40 points in Jul/2024 (lowest since Jun/2020) from 49.30 points in the previous month, and well below forecasts of 49
Chinese brands captured 11% of the European electric-car market in June, notching record registrations as manufacturers raced to beat stiff European Union tariffs that took effect early this month
China over subsidizing EV makers to flood exports is a form of mercantilism
Adem Tumerkan retweeted
*Nissan Motor saw its operating profit plummet 99% on the year in April-June as its lack of hybrid offerings in the critical U.S. market took a toll on sales.
Ouch
Car demand is fading & China now forcing exports everywhere, limiting profits
Less demand + excess supply
*Nissan Motor saw its operating profit plummet 99% on the year in April-June as its lack of hybrid offerings in the critical U.S. market took a toll on sales.
Ouch
Car demand is fading & China now forcing exports everywhere, limiting profits
Less demand + excess supply
Capital One Financial's profit fell 61% in the second quarter, it reported on Tuesday, as it set aside more money to cover losses on loans
Yet the CEO said, “"The U.S. consumer remains a source of strength in the overall economy.”
Net charge offs and loan losses key to watch
