Monday, August 5, 2019

Capital Markets: "Having Fun Yet?"

That's the FT's Bryce Elder. He is the ringmaster of a four-ring circus called Markets Live at FT Alphaville.
Ostensibly real-time market commentary but actually a demonstration of how many plates one can keep spinning at the same time while herding cats and trying to avoid defamation lawsuits brought on by random comments of the audience/participants.
There used to be a firm called Bedlam Asset Management.....but I digress.

Sometimes Mr. Elder joins the madness (don't worry, I'll get to the point). Here's an example I was going to title "As Britons Consider Whether They Will Be Forced To Eat Their Pets":
Via the Duchy de Bryce:
BE I'm slightly behind schedule because I've only got round to reading the Office for Budget Responsibility's Fiscal Risks Report.

BE Read the whole thing yourself here: https://obr.uk/doc...isksreport2019.pdf

BE Or go argue about the nature of economic forecasting on the comment box of this: https://www.ft.com...-984c-fac8325aaa04
Soundbuy Any mention of when our pets become our food.......
Maudise @Soundbuy my cat can feed a family of 5 for a fortnight
BE (@Soundbuy: to make an accurate forecast we'd need a clearer definition of "our". Because I'm not a big fan of the neighbour's dog.)
https://ftalphaville.ft.com/marketslive/2019-07-19/
https://obr.uk/docs/dlm_uploads/Fiscalrisksreport2019.pdf 
Good times.
And then there's today's edition. Yikes:


BE Are we having fun yet?
BE

GBKrona Tin hats!!
BE And welcome to another week of Markets Live, FT Alphaville's thing with the etc.


BE .............. So. Why?
Blank canvas Good morning everyone
Excel Developer Good morning, good morning. What a lovely morning, a wonderful cool wind blowing through a hitherto sultry stock over-valuation.
BE I mean, the reasons are obvious. It's trade again. Escalation. Trump Tweeting random policy changes while the toilet. You know.
DogDay Morning all
BE Plus the FOMC.


BE But that was all last week. So why this morning?
BornCynic Take your pick of reasons BE - please feel free to invent one.
Excel Developer @BE: Iron Ore price collapse?
marktime Morning and gulp
Excel Developer @BE: Rio grey might illuminate.
BE Is it because people thought on Friday, "this is really bad" and then thought again this morning, "actually, this is really bad"?
BE To be sure, there's some pretty bleak strategy stuff around.


BE Here's Morgan Stanley.
BE
Trade tensions have pushed corporate confidence and global growth to multi-year lows. Tariffs announced on Aug 1 raise downside risks significantly. If US lifts tariffs on all imports from China to 25% for 4-6 months and China takes countermeasures, we believe we will enter recession in 3 quarters. Key points Citing a lack of progress on trade talks, the US has announced that it would impose 10% tariffs on the remaining US$300bn of imports from China from Sep 1.
BE
China has indicated it would take countermeasures. About two-thirds of goods tariffed in this round are consumer goods, which could lead to a more pronounced impact on the US as compared to earlier tranches. If these measures are implemented and stay in place for longer than 4-5 months, global growth will likely remain weak in the range of 2.8-3.0%Y in 1H20 despite forthcoming policy support. The most important area of impact is corporate confidence.

BE
While we don’t know the exact tipping point, we are cognizant of the risk of a potential non-linear tightening in financial conditions and its impact on capex and the labour market. As we view the risk of further escalation as high, the risks to the global outlook are decidedly skewed to the downside. If the US were to implement 25% tariffs on all imports from China for 4-6 months and China were to respond with countermeasures, we believe we would see the global economy entering recession in three quarters.
BE Global central banks, in particular the Fed and ECB, will provide additional monetary policy support. But these measures, while helpful in containing downside risks, will not be enough to drive a recovery until trade policy uncertainty dissipates.
 cracklenpop Any grey on gilts?
 Excel Developer "we are cognizant of the risk of a potential non-linear tightening in financial conditions" , non-linear risks can be a killer.
OurAdvice Morning.
BornCynic What is "non-linear tightening" please?
JimboRock UK Commercial property down sliding - any bottom in sight?
BE Yep. Futures already pricing in four 25bips Fed cuts by December next year, so the whole "overly hawkish" narrative doesn't quite hold.

11
BE (@BornCynic: I'm happy to post strategy but don't make me read it.)

BE HSBC:....

Probably the best insta-roundup on the web.
Plus, for no extra charge,  the rabble-on-the-right!
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