Rates & Macro Strategist 🤔 Joga Bonito 🤙 "Try nothing, and it's gonna be nothing Try something, and it's gonna be something" - DMX
Room of spirit & time or Paris
Joined August 2019
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The chart is showing link between financial conditions and commodity cycle. While the last decade was driven by liquidity impulse / low inflation, this one is likely to be driven again by commodities, which would mechanically tightening financial conditions.
La Saumure retweeted
In case you missed it: AI infrastructure is increasingly being built on credit. Long-term debt and off-balance-sheet vehicles are financing the build-out but may also concentrate risks among a small number of firms and investors.
Read more: bit.ly/4sqAqWA
#BISBulletin
ALT A chart titled "Rising capital expenditure feeds an AI credit boom" shows two bar graphs. Graph A on the left displays the rise in capital expenditure for AI companies from 2020 to 2026, with a notable increase reaching approximately 800 billion USD by 2026. Graph B on the right illustrates hyperscalers issuing more and longer-term debt from 2021 to 2035, with pink bars for issued debt and blue bars for maturing debt. The data is from the Bank for International Settlements.
This conference was really interesting, but i am leaving it with a sentiment that i don’t like. The sentiment of total lack of control on the current environment.
La Saumure retweeted
This very interesting paper argues that global imbalances cannot be understood simply as the outcome of independent national saving and investment decisions. The structure of the international monetary and financial system helps shape those decisions, determines how capital flows across borders, and influences which countries bear the costs of adjustment.
Global imbalances are back, and the conventional diagnosis may be wrong.
Conventional analysis by the International Monetary Fund, G7 + OECD traces the imbalances to domestic saving–investment gaps, pointing to "excess saving in China and the EU, and too little saving in the United States."
In a new working paper, GDP Center Non-Resident Senior Fellow @YanLian31677392 + Center Director @KevinPGallagher argue that the root cause of the imbalances is in fact the financial imbalances generated by the international monetary and financial system (IMFS) itself. Dollar dominance and the lack of a credible global lender of last resort push countries to self-insure.
For this month's T20 Summit in New York, the authors contribute to a policy brief ahead of the December G20 Leaders' Summit. They present two priorities for G20 discussions on imbalances:
📍 Strengthening the global financial safety net (GFSN)
📍 Accelerating multilateral development bank (MDB) reform
The goal is to make these systems "not just bigger, but better."
📄 Read the working paper: gdpcenter.org/3UYqFCV
📄 Read the T20 policy brief: gdpcenter.org/47VEKUA
#G20 #IMF #OECD #T20 #GFSN #GlobalImbalances
Interesting to see that Gold is a victim of deleveraging here, but the SMI price action during a liquidity contraction seems to confirm its safe-haven status.
This is reminding me the buffet one :
"Only when the tide goes out do you discover who's been swimming naked."
New paper out !
We introduce a framework to understand how U.S. authorities are preserving financial stability through 2 generations of policies
The goal ? Buying time in a world of more volatile capital flows and declining foreign savings recycling.
🧵
(Link on last post)
To conclude quickly, I think that now, we are living a progressive decline of US safe haven status, but without any winner to take the throne. We are going to a more fragile system, which by definition is a system where frequent interventions are needed, to avoid the burst.
The link of the paper :
allianz.com/en/economic_rese…
La Saumure retweeted
🚨🇫🇷 - Attentat raciste de Trappes : la FAMILLE du terroriste raciste a TÉMOIGNÉ « Kevin écoute beaucoup trop les chaînes d’info. Il relie tout à l’immigration comme le font ZEMMOUR, LE PEN ou PRAUD » auprès de Médiapart.
Ce graph permet de comprendre pourquoi la colère sociale est aussi forte aujourd'hui. Il remet également en cause le narratif, largement malhonnête, que l'on entend souvent : "Macron a échoué parce que les FR sont égoïstes et n'ont pas voulu accepter la réforme des retraites."
Je viens de l'école institutionnaliste, qui postule que chaque économie est régulée à travers un compromis social entre le capital, le travail et une multitude d'intérêts contradictoires. Dans ce cadre, proposer une réforme sans vision d'avenir / compromis ne fonctionne pas.