JS Global Macro Notes
- Thread starter darkhorse
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Why does this matter? North Korea has been pumping out supernotes for years.
Actually they don't. The idea that a country can buy its way out of localized economic crisis via large foreign reserve holdings is a fiction. Two other cases of massive foreign reserves (in comparable % of GDP terms) were America in the 1920s and Japan in the 1980s. Neither was spared from economic collapse.
Gray Swans and Fat Tails
The idea of the Gray Swan - a riff on the Black Swan - is a potential catastrophe that is not only foreseeable, but likely to occur at some point given a confluence of drivers. The challenge with a Gray Swan is that you don't know the actual timing. There is just a strong sense it could happen sooner or later. Many potential macro-level crises fit the Gray Swan profile, since it is so hard to know when a bubble is going to burst, a credit cycle is going to break down, or inflation / deflation hits a tipping point etcetera.
Read more: http://www.mercenarytrader.com/2012/09/gray-swans-and-fat-tails/
The idea of the Gray Swan - a riff on the Black Swan - is a potential catastrophe that is not only foreseeable, but likely to occur at some point given a confluence of drivers. The challenge with a Gray Swan is that you don't know the actual timing. There is just a strong sense it could happen sooner or later. Many potential macro-level crises fit the Gray Swan profile, since it is so hard to know when a bubble is going to burst, a credit cycle is going to break down, or inflation / deflation hits a tipping point etcetera.
Read more: http://www.mercenarytrader.com/2012/09/gray-swans-and-fat-tails/
50 Shades of Gray
The problem is most are colorblind to begin with, perhaps vision problems induced by too much koolaid?
Or is the color of swan in the eye of the beholder, in some sort of Orwellian group-think whereby truth is only measured by the number of those who believe it.
I contend that the 2008 crisis was most certainly grey, just that those who failed insist it was black. That way it lets them off the hook for being unable to "foresee the unforseen", tho the Cassandra's of the time (Paulson et al.) made out like bandits.
SUBJECT 1: Holy superturds, Batman: I didn't know what a supernote was until I researched your use of it. VERY interesting link including Korea's purpose for it.
http://en.wikipedia.org/wiki/Superdollar
Why it matters is because I want to whine. It's bad enough living with fiat currency that shrinks because of the errors and omissions of Congress (or is it COMMISSIONS of doing unthinkable things ?), but we also are subject to bad "money" elsewhere around us. I'll have to start saving my hundred dollar bills to use for tipping the maitre d', just in case they won't make the grade elsewhere.
SUBJECT 2: re: China having enough to bail themselves out of an economic calamity. It would have been good had you included these examples of America and Japan in your post. It is easy to see only the enormity of China's Reserves and figure it has huge margin for error sufficient to bail themselves out while taking other corrective actions. Good examples. I feel their pain.
Specter of China 'Hard Landing' Haunts Global Economy
Published: Saturday, 22 Sep 2012 | 5:47 PM ET
Text Size
By: Javier E. David
Special to CNBC.com
"....investors are now forced to confront growing worries about China, whose powerhouse economy appears increasingly vulnerable to a dreaded âhard landingâ scenario some have long warned about."
http://www.cnbc.com/id/49104300
Now That's a Divergence...
The old school interpretation of Dow Theory takes divergence as a sign of invalidation. It is like the Magic 8 Ball equivalent of "Reply Hazy, Try Again Later."
There are plenty of other reasons to have concern up here too...
Read more: http://www.mercenarytrader.com/2012/09/now-thats-a-divergence/
The old school interpretation of Dow Theory takes divergence as a sign of invalidation. It is like the Magic 8 Ball equivalent of "Reply Hazy, Try Again Later."
There are plenty of other reasons to have concern up here too...
Read more: http://www.mercenarytrader.com/2012/09/now-thats-a-divergence/
Relief break. (No, not the wet kind.) Some fun with the somber:
Manufacturing WHAT ??!!
R e v o l u t i o n
So for all the cryers in the group fatalistic about America's leadership and future, finding pearls wherever possible is akin to feeling successful in plugging SOME leaks in the Titanic to the point that maybe we will see this ship remain afloat longer than had been expected. (There is that Titanic thing, again.) Slow progress--maybe none--but nevertheless sinking is not as imminent. Then what ? "Dunno !" comes to mind, but we can be happy where we find lifeboats.
(1) The natural gas / shale revolution we are on the verge of with its prospect of keeping one of the ship's propellers turning. (2) Some sort of revolution against the fossil fuel haters of coal and oil production, the latter of which there has been dimensional strides in technology to extract it from where it is deeper and harder to get. After all, when the ship goes vertical, with only the last half of it swinging up off the surface and into the air as the first half goes vertical and under water, maybe FFH (fossil fuel haters) can be made to understand it doesn't matter how clean you are when falling off the cliff, your body won't be productive during the fall and certainly not after the end of the fall. [Welcome to metaphor hell.] (3) Manufacturing revolution coming. (4) Then there is the upcoming revolution in ......... WHAT ? Let's go back to ( 3 ) ! ! ......
brief video: http://finance.yahoo.com/blogs/dail...turing-jobs-coming-back-report-123557752.html
(if the video link ever breaks, here is essentially the same thing....)
http://www.globalpost.com/dispatch/...acturing-jobs-returning-outsourcing-reshoring
Ok.......so it's just a mini revolution. But who knows. Even if it is a William Bendix tv show Life of Riley quality of life, it's living anyway.
http://en.wikipedia.org/wiki/The_Life_of_Riley ("The expression, "Living the life of Riley" suggests an ideal contented life, possibly living on someone else's money, time or work. Rather than a negative freeloading or golddigging aspect, it implies that someone is kept or advantaged.")
http://www.veoh.com/watch/v16956297...of+Riley+-+Classic+TV+-+nostalgiamerchant.biz
One still wonders the rate of continued, diminishing quality of life with half the working age population paralyzed by receipt of government checks rather than being productive..... self perpetuated by the knowledge of who the candy givers are and keeping them in office. Well, maybe there will be a revolution there, too, when the candy fails to taste as good over time (or it shrinks in its ability to satisfy).
Manufacturing WHAT ??!!
R e v o l u t i o n
So for all the cryers in the group fatalistic about America's leadership and future, finding pearls wherever possible is akin to feeling successful in plugging SOME leaks in the Titanic to the point that maybe we will see this ship remain afloat longer than had been expected. (There is that Titanic thing, again.) Slow progress--maybe none--but nevertheless sinking is not as imminent. Then what ? "Dunno !" comes to mind, but we can be happy where we find lifeboats.
(1) The natural gas / shale revolution we are on the verge of with its prospect of keeping one of the ship's propellers turning. (2) Some sort of revolution against the fossil fuel haters of coal and oil production, the latter of which there has been dimensional strides in technology to extract it from where it is deeper and harder to get. After all, when the ship goes vertical, with only the last half of it swinging up off the surface and into the air as the first half goes vertical and under water, maybe FFH (fossil fuel haters) can be made to understand it doesn't matter how clean you are when falling off the cliff, your body won't be productive during the fall and certainly not after the end of the fall. [Welcome to metaphor hell.] (3) Manufacturing revolution coming. (4) Then there is the upcoming revolution in ......... WHAT ? Let's go back to ( 3 ) ! ! ......
brief video: http://finance.yahoo.com/blogs/dail...turing-jobs-coming-back-report-123557752.html
(if the video link ever breaks, here is essentially the same thing....)
http://www.globalpost.com/dispatch/...acturing-jobs-returning-outsourcing-reshoring
Ok.......so it's just a mini revolution. But who knows. Even if it is a William Bendix tv show Life of Riley quality of life, it's living anyway.
http://en.wikipedia.org/wiki/The_Life_of_Riley ("The expression, "Living the life of Riley" suggests an ideal contented life, possibly living on someone else's money, time or work. Rather than a negative freeloading or golddigging aspect, it implies that someone is kept or advantaged.")
http://www.veoh.com/watch/v16956297...of+Riley+-+Classic+TV+-+nostalgiamerchant.biz
One still wonders the rate of continued, diminishing quality of life with half the working age population paralyzed by receipt of government checks rather than being productive..... self perpetuated by the knowledge of who the candy givers are and keeping them in office. Well, maybe there will be a revolution there, too, when the candy fails to taste as good over time (or it shrinks in its ability to satisfy).
Okay Ben, Now What?
...in our view the law of diminishing returns is kicking in. We see the recent run-up as classic example of a Soros style "false trend," and in terms of longevity and sustainable driver issues that trend right about now looks like a 90-year-old man smoking two packs a day.
Read more: http://www.mercenarytrader.com/2012/09/okay-ben-now-what/
...in our view the law of diminishing returns is kicking in. We see the recent run-up as classic example of a Soros style "false trend," and in terms of longevity and sustainable driver issues that trend right about now looks like a 90-year-old man smoking two packs a day.
Read more: http://www.mercenarytrader.com/2012/09/okay-ben-now-what/
The Euro, William Jennings Bryan, and Newly Constructive Thoughts on Metals
One can picture a modern-day Grecian or Iberian WJB, thundering to a roaring crowd: "You shall not press down upon the brow of Southern Europe this crown of thorns. You shall not crucify mankind upon a cross of euros!"
Read more: http://www.mercenarytrader.com/2012...an-and-newly-constructive-thoughts-on-metals/
One can picture a modern-day Grecian or Iberian WJB, thundering to a roaring crowd: "You shall not press down upon the brow of Southern Europe this crown of thorns. You shall not crucify mankind upon a cross of euros!"
Read more: http://www.mercenarytrader.com/2012...an-and-newly-constructive-thoughts-on-metals/