3-Wave Down, China One-Month Lag Downgrading 1st QTR Macro for FEB...Catch-Up from China at a minimum doesn't start until Mar19...TBD
Note: If the Fed starts to decrease the Repo (Treasury TCB) this "Potentially" will "Exponentiate" the overall problem from a "Moderate-Pullback" to a "Major-Pullback/Correction"...TBD!
Note: If the Fed starts to decrease the Repo (Treasury TCB) this "Potentially" will "Exponentiate" the overall problem from a "Moderate-Pullback" to a "Major-Pullback/Correction"...TBD!
Comment:
pbs.twimg.com/m...EQQgNCcWsAA84O5?format=png...
Comment:
JPM takes downs China Q1 GDP again: now to 1% and highlights possible -3.9% scenario
JPM: We revise China’s 2020 growth forecasts in response to the latest developments as described above. In the new baseline scenario, we assume: (1) contagion will peak in March (using the baseline contagion assumption as mentioned above), consumption quickly recovers in 2Q; (2) factories reopen on Feb 10th in most provinces, though further delayed in a few provinces (e.g. Hubei, Zhejiang, Guangdong, Jiangsu). The supply shock will be most significant in February. Recovery in production is gradual and slow in February (after February 10), and will pick up in March and fully recover in 2Q.
We also consider a more severe scenario, for which we assume: (1) contagion will peak in April (using the pessimistic contagion assumption), consumption rebound will be delayed to mid-2Q and 3Q; (2) factory reopening will be postponed by another week compared to the new baseline scenario, i.e. longer disruption in production, transportation and shipping.
Overall, the key message from our new baseline scenario is that there will be significant slowing in 1Q GDP growth, followed by a V-shaped rebound in 2Q.
JPM: We revise China’s 2020 growth forecasts in response to the latest developments as described above. In the new baseline scenario, we assume: (1) contagion will peak in March (using the baseline contagion assumption as mentioned above), consumption quickly recovers in 2Q; (2) factories reopen on Feb 10th in most provinces, though further delayed in a few provinces (e.g. Hubei, Zhejiang, Guangdong, Jiangsu). The supply shock will be most significant in February. Recovery in production is gradual and slow in February (after February 10), and will pick up in March and fully recover in 2Q.
We also consider a more severe scenario, for which we assume: (1) contagion will peak in April (using the pessimistic contagion assumption), consumption rebound will be delayed to mid-2Q and 3Q; (2) factory reopening will be postponed by another week compared to the new baseline scenario, i.e. longer disruption in production, transportation and shipping.
Overall, the key message from our new baseline scenario is that there will be significant slowing in 1Q GDP growth, followed by a V-shaped rebound in 2Q.
Comment:
Expected Value Macro
@EVMacro
·
10m
And Brexit is just the beginning of it. The economics of the modern nation state no longer make sense as the carrying cost exceeds the benefits.
Decentralization and localism/tribalism will win the day
EVM Theme: #MiaSanMia (don't follow me Bayern Munich fans)
Quote Tweet
Raoul Pal
@RaoulGMI
· 20h
So, I tried renewing my house insurance in Spain via the UK insurer I have held it with for the last 10+ years. But due to Brexit they can not longer offer cover in the EU. I don't think anyone yet understands the size of the disruption to come...
@EVMacro
·
10m
And Brexit is just the beginning of it. The economics of the modern nation state no longer make sense as the carrying cost exceeds the benefits.
Decentralization and localism/tribalism will win the day
EVM Theme: #MiaSanMia (don't follow me Bayern Munich fans)
Quote Tweet
Raoul Pal
@RaoulGMI
· 20h
So, I tried renewing my house insurance in Spain via the UK insurer I have held it with for the last 10+ years. But due to Brexit they can not longer offer cover in the EU. I don't think anyone yet understands the size of the disruption to come...
Comment:
Continuing with Quarles speech:
Following the mid-September volatility, the Committee stated that it would seek to maintain, over time, a level of bank reserves at or above the level that prevailed in early September, a level that we believe is sufficient to operate an ample-reserves regime. Looking ahead, I judge that it is reasonable that we ask ourselves whether it may be possible to operate with a lower level of reserves and remain consistent with the ample framework.
This line is important because Quarles is already leaning against the idea of a constantly ballooning balance sheet.
www.chartpoint.com/o...the-discount-window/
Following the mid-September volatility, the Committee stated that it would seek to maintain, over time, a level of bank reserves at or above the level that prevailed in early September, a level that we believe is sufficient to operate an ample-reserves regime. Looking ahead, I judge that it is reasonable that we ask ourselves whether it may be possible to operate with a lower level of reserves and remain consistent with the ample framework.
This line is important because Quarles is already leaning against the idea of a constantly ballooning balance sheet.
www.chartpoint.com/o...the-discount-window/