- US doesn’t rank very high in income mobility.
- It takes 5 generations for someone to move from low to high income.
Macroeconomics
Snippets on the big picture.
Leading Indicators
- Lots of leading indicators are perking up.
UK Flows
- Could UK no longer be an investment pariah …
- h/t The Market Ear
Tariffs
- A chart of US duties as % of imports since 1891 …
- Interesting long term trend punctuated with spikes.
Technology (cont.)
- A nice chart showing how Information and Communication Technology (ICT) use has ballooned.
- While the cost of transportation (airline tickets and sea freight) and communication (telephone calls) has collapsed.
- From World Bank Development Report.
Interest rates
- The very (from 3000 BC!) long term history of interest rates.
Geopolitics
- Understanding geopolitical trends is vital to forecast shifting investment landscapes.
- This is the latest trove of leaked Iranian reports showing their level of influence in Iraq.
- Has ramifications around the world.
- “The reports reveal far more than was previously understood about the extent to which Iran and the United States have used Iraq as a staging area for their spy games.“
- “The documents show how Iran, at nearly every turn, has outmanoeuvred the United States in the contest for influence.“
Real vs. Financial Assets
- Real asset (defined as commodities, real estate, collectibles) prices are at an all time low vs. financial assets (defined as large cap stocks and long-term government bonds).
Technology
- Tech change is exponential.
Fertility by Education
- Interesting table of US fertility by education level.
Semiconductors vs. ISM
- Semiconductor index (SOX) strength could be pre-ordering from China ahead of trade war.
- or a genuine pick up in end demand.
- Regardless likely to perk up lead indicators.
Commodities
- Commodities are at a record low valuation vs. stocks.
Central Banks & Gold
- The recent increase in central bank holdings of gold …
- is the first time since the end of the Second World War!
US Deficit
- US Deficit is back to $1trn levels.
- This type of fiscal expansion is very unusual at this point in the cycle.
- h/t Deutsche Bank Research
Financial Conditions & GDP
- Financial Conditions also suggest growth will improve.
Global PMIs
- Interesting to see the second derivative of Global PMIs has turned positive – bullish?
Fed and Climate Change
- An interesting and novel conference organised by the Fed on Climate Change Economics. Live stream available.
- “It’s important for us from a monetary policy perspective to know what the potential growth rate of the economy is and if climate events or climate risk is going to shave that off, even if it’s over the long term,” San Fran Fed chief Mary Daly said earlier this week.
- h/t SeekingAlpha
UK Retail
- Sober reading about the UK’s biggest private employment sector.
- Interestingly this hits women harder than men.
- Article suggests 20% of retail space will close in the near future.
- We wonder with AMZN opening retail stores though, could this be an example of pressure point theory.
Global Fertility Crash
- An interesting look from Bloomberg at global fertility rates.
- In 1960 the global fertility rate was five live births per woman.
- This is now 2.43, close to the level required to keep the world population stable.
- Half of all countries are already below this level.
- This has all sorts of implications for investments in the long run.
- Each grey line is a country – try to guess which the worst is?
- h/t FT Alphaville
Sharpe Ratio
- Major asset classes this year are set to produce the highest Sharpe ratio since 1990.
- Sharpe Ratio is the return on an asset divided by the risk (measured as standard deviation) i.e. return per unit of risk taken.
- h/t isabelnet.com.
