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.
Ca fait depuis les municipales que je martele que il faut se preparer a un second tour lfi-rn. On me prenait pour un dingue. Puis tu vois aujourdhui et tu comprends pk il est au dessus des autres. Sans etre d‘accord, tu peux que respecter
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.
It was cool. Bottom line :
They seems to beconcerned about HF growing importance, monetary policy frictions (specialness + permanent reserves), and are exploring way to shade more lights NBFI’s (stablecoins too)
+ the schnabel punchline : “we got to expect the unexpected “
Avec 4 nerds qui vont commenter que enfaite il fait une confusion epistemologie dans son approche econometrique.
A quand un bd spyrou regulationniste?
Alalala le pauvre Boyer doit etre partagé entre la fierté de percer en politique et la rchoumaximum de pas etre comprit (bon a la limite ca il en a l'habitude)
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
La distinction existe theoriquement, mais actuellement quand tu vois les positions de la droite actuellement, anti etat de droit et designant un ennemi de l’interieur… Les differences s’effacent.
Va dire aux instits que le spread est a >150bps a cause des musulmans…
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."
Merci monsieur!
Je me disais en le publiant que, finalement, la question philosophique qui s'en dégageait était : jusqu'où peut-on forcer la stabilité d'un système instable ?
The link of the paper :
allianz.com/en/economic_rese…
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.
Another evidence of it is how the volatility of LT treasury inflows has doubled post covid and is reflecting far less appetite for duration (And also creating an "equitization of the $", but that will be a topic for later)
A strong sign of this shift is that offshore financial centres have grown far faster than total foreign Treasury holdings. Increasingly, the marginal buyer is a price-sensitive, repo-funded investor rather than a reserve manager, adding another layer of fragility to the system.
These policies buy time but cannot offset the structural decline in foreign savings recycling. As defense spending, inflation and financing needs rise, bond markets are becoming increasingly domestic, the result is more capital flows instability.
The second generation of intervention led by the treasury, is pretty coherent : Bills issuance (ATI), GENIUS act (stablecoins buy bills), SLR reform ( Free up some cash from banks) and Buybacks are aiming toward one purpose: Insuring market resilience by preserving liquidity.
