Subscribe to Thinking Ahead for what I see happening next in the geopolitics of money. Former @FT columnist.
Paris
Joined February 2013
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John Dizard retweeted
Lots of talk about the dollar's role as a reserve currency.
Less talk about the United States role as the main (net) borrower in the global economy -- and the interest the US has to pay as a result.
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John Dizard retweeted
It’s about to get Real (real fast)…
The chart below shows the 10-year real rate and real effective Fed Funds Rate versus the 10-year average of annual U.S. labor force growth. Historically, the Great Moderation (1985-2020) came with declining inflation and 10Y real rates continuing to slide lower alongside a slowdown in labor force growth. Then, with the Fed’s QE pushing real rates down, market-based real rates actually went negative (very unnatural).
US real rates have not been this high since the Global Financial Crisis, and the last time they were positive (very briefly and at much lower levels) was pre-pandemic.
All in all, we believe current real rates are restrictive in the US, slowing economic activity by raising the real cost of capital. By extension, given the US high debt loads, hard to keep real rates high!
At the same time, we do not believe real rates will go back to pre-pandemic levels (nor go negative again) instead they’ll trade in a higher range, mirroring the recalibration of labor force (all the while we search for the actual neutral rate).
tinyurl.com/3z3u6j5p
John Dizard retweeted
NEW: folks, we have a seating chart situation developing at Lazard:
on.ft.com/3yOLvJx
John Dizard retweeted
Governor Newsom’s approval ratings have taken a hit, with a plurality of voters now disapproving of his leadership. As the budget cuts kick in over the coming months and start visibly affecting residents, that political unease and anger is likely to grow.
bit.ly/3wKSR01
John Dizard retweeted
This population density map of the Dallas metroplex demonstrates how the concept of a center of gravity disappears in cities without physical constraints as they grow. This trend is evident in the weakness of downtown office buildings in cities like Dallas, LA, Houston and Atlanta that started even pre-COVID.
As cities grow beyond a certain size, the centralized business hub model breaks as commute times become too great (people live even further away + more traffic). In its place arises a web of cities, with previous bedroom communities emerging as semi-independent communities each with their own office complexes, hospitals, and entertainment but sharing an airport, sports teams, and major cultural facilities. The result is a big metroplex with distributed resources rather than the concentrated hub and spoke system of old.
Thus these markets can have downtown office with 25%+ vacancy with buildings getting repossessed but new construction going up around the perimeter. The traditional city/suburb model is evolving to allow people to live as they prefer.
John Dizard retweeted
BREAKING: Representative Pete Sessions just sold up to $100K of Nvidia stock, $NVDA.
This is the first time we have seen him sell Nvidia.
He first bought in back in 2017.
The stock has risen 3,458% since then.
Sessions sits on the House Subcommittee on Capital Markets.
John Dizard retweeted
🚨🚨🚨 If the pro-Russian 🇷🇺 coup in Niger is a success, it is EXTREMELY serious for Europe.
🇫🇷 absolutely did not expect to be ousted from Niger (4th country…). 1/3 of uranium ☢️ used by 🇫🇷 comes from Niger
Congrats Emmanuel. Add Chad, & this will be 🇷🇺’s new colonial empire:
John Dizard retweeted
6 sigma moved in German 2yr Bonds yesterday and it is not over
Great chart from @pietphc
John Dizard retweeted
Interesting thread ...
