Thursday , November 26 2020
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Articles by [email protected] (TrueEconomics)

19/11/20: COVID19 Update: Nordics & Sweden

7 days ago

Updating comparatives for Nordic countries:New cases are blowing up in Sweden and are now on the declining trend in the rest of the Nordics. Charts above are showing Nordic countries adjusted for population size differences to Sweden.

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18/11/20: COVID19 Update: Russia

8 days ago

Updating pandemic data for Russia: some summary stats firstThe above stats clearly show that Russian pandemic is in  full-blown second wave of infections and deaths. As the chart below illustrates, however:Russian second wave has been associated with exactly matching dynamics in both cases and deaths without any substantial lags;Both cases and deaths are yet to show any signs of stabilization and peaking (which is distinct from the EU27 experience so far);The two effects combined suggest that Russian pandemic numbers are likely to continue to worsen into December.You can see more Russia summary stats and comparatives to other countries here: https://trueeconomics.blogspot.com/2020/11/181120-covid19-update-countries-with.html.

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18/11/20: COVID19 Update: U.S. vs EU27

8 days ago

Comparatives for the pandemic development across the EU27 vs U.S.:Thanks to an absolutely savage second wave of the pandemic, EU27 is now closing the gap with the U.S. in terms of total deaths, both in absolute terms and in per capita terms:Deaths per capita: the U.S. has overtaken the EU27 since May 18, and the trend for the U.S. continued to be worse than that for the EU27 until early October.EU27 death rate per capita has effectively flattened-out at around 308 per 1 million prior to August 2, but has been rising once again since then (498.1 currently).U.S. deaths per capita continue to increase (760.1 currently).The U.S. & EU27 are in 3rd (U.S.) and 2nd (EU27) waves of infections. Since Oct 1st, EU27 cases have surpassed the U.S. on all but 3 days & deaths on all but 16 daysThe trends

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18/11/20: COVID19 Update: Countries with > 100,000 cases

8 days ago

Updating the tables for countries with more than 100,000 recorded cases of COVID19:U.S. continues to lead globally in terms of deaths and new cases counts. On per-capita terms, the U.S. ranks 7th worst in the world in terms of cases per 1 million of population, 12th worst in terms of deaths per 1 million of population and 27th worst in the world in terms of deaths per 1,000 officially detected infections. The country has, by far, the most expensive (as a share of GDP) healthcare system in the world.In contrast, were they treated as a single entity, BRIICS+Turkey have better than average performance in terms of number of cases, number of deaths per capita and an average (statistically)  rate of deaths per 1,000 cases.Worldwide, 20 countries now have more than 500,000 cases and 5 countries

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18/11/20: COVID19 Update: Worldwide Cases and Deaths

8 days ago

Updating data on global COVID19 pandemic spread:Some summary tables first;November-to-date is an outlier month in terms of both, case numbers and deaths. While the former is in part driven by better availability of testing, the latter runs contrary to the expected outrun of improved testing: higher rates pf testing lead to earlier detection of the disease and, in theory, should lead to reduced deaths. Unfortunately, this is not the case. Daily average new deaths are running at 8.294 so far in November – a massive increase on October and the highest average for any month so far. Worse, thee geography of new cases has shifted from less-developed countries (South and Latin America, India etc) to more advanced economies (the U.S. and Europe), which should, in theory, see a reduction in daily

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17/11/20: U.S. households: Debt Hostages to the Washington

9 days ago

Massive stimulus deployed in Q2 2020 has lifted substantially aggregate household incomes. Meanwhile, lower interest rates have boosted debt affordability, while new demand for credit collapsed. All of which means that, at least through 2Q 2020, U.S. households enjoyed some really dramatic reduction in the burden of debt:Income boost from Government transfers in 2Q 2020 was so large, it took household debt to income ratio down by a whooping 3 years in just one quarter, with the ratio currently at the levels last seen in the second half of 1998, moving exactly 3 years from Q3 2001 levels where they stood at the end of Q1 2020. meanwhile, actual debt levels, in US$ terms were down just $52 billion in 2Q 2020 compared to Q1 2020, a decline of only 0.26%. Of course, 2Q 2020 boost to incomes

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16/11/20: The F&*ked Stay F&^ked

10 days ago

Here is an updated forecast for full year 2020 distribution of wealth 9based on FRED data though 2Q 2020 and stock markets data through November 16):Hint: no, Donald Trump will not finish his tenure in the White House as the worst President for the ‘bottom 90%’, nor the best…

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16/11/20: Velocity of Money and the Glaciers of Complacency

10 days ago

Last time I looked at the velocity of money, things were going South fast: https://trueeconomics.blogspot.com/2020/05/27520-falling-velocity-of-money.html. And considering thee data through 3Q 2020, there is little improvement across the board:You can barely notice 3Q 2020 uptick from the pandemic lows in all three measures, thee M1, M2 and MZM. And here are differentials:Precautionary savings motives (blue line) remain extremely elevated, while investors’ willingness to trade assets (in a bull market, a sign of more active management of portfolios) stays stubbornly low. Which implies that the shift from the pandemic impact to the recovery did not do much to alter demand for money, nor to break away from the monetary policy-supported glut of liquidity available to the economy as a whole

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16/11/20: Retail sales, Sector employment and COVID19 recovery

10 days ago

Retail sales suffered a sharp shock from the demand contraction following the first phase of COVID19 pandemic. As of the end of September, based on the preliminary estimates from the U.S. Census Bureau, total volume of retail sales in the U.S. has fully recovered to pre-pandemic levels:Based on cumulative retail sales over trailing 12 months period, September 2020 stood at USD 5.519 trillion, which is USD48.371 billion above 12 months trailing cumulative for January 2020, and USD121.178 billion above the same measure for September 2019.The same cannot be said about the recovery in the retail sector jobs:As of October 2020, total employment in the U.S. retail sector stood at 15,173,500, 498,500 down on February 2020 and 471,200 less than in October 2019. In fact, the problem with the

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13/11/20: The economy has two chronic illnesses (and neither are Covid)

13 days ago

My column for The Currency this week covers two key long-term themes in the global economy that pre-date the pandemic and will remain in place well into 2025: the twin secular stagnations hypotheses and the changing nature of the productivity. The link to the article is here; https://thecurrency.news/articles/28224/the-economy-has-two-chronic-illnesses-and-neither-are-covid/.

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7/11/20: BRIC: Composite Economic Indicators for October

19 days ago

I covered BRIC Manufacturing and Services PMIs for October in two earlier posts (see here https://trueeconomics.blogspot.com/2020/11/51120-bric-services-pmis-october.html), so now, Composite PMIs:Brazil Composite PMI rose to 55.9 in October, compared to 51.6 in 3Q 2020, and currently sits above Global Composite PMI of 53.3. The latest increase in PMI is a robust signal of partial recovery, marking the third consecutive month of > 50.0 readings that followed five consecutive months of contraction. Russia Composite PMI was the weakest of all BRIC PMIs, falling to 47.1 in October, compared to 55.9 in 3Q 2020, and marking the first sub-50 reading in four months.India Composite PMI was the strongest amongst the BRIC PMIs rising to 58.0 in October against 45.9 in 3Q 2020. Overall, Indian

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7/11/20: COVID19 Update: U.S. vs EU27

19 days ago

U.S. is now in a full-blown third wave of the pandemic both in terms of daily case counts and deaths, and the EU27 is in a full-blown second wave:Summary statistics:Histograms for both:

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7/11/20: COVID19 Update: Worldwide Cases and Deaths

19 days ago

The pandemic is accelerating world-wide and the death toll is now rising at an alarming rate:The chart above is the most alarming one: rates of growth in new cases and in daily deaths counts (the second derivative) are well-above their past months’ averages. Death toll is rising by a third, daily, on average since the start of November. Covid-denialists have persistently argued that despite increases in the numbers of new cases, deaths were falling (they were not: August was the only month of negative growth in daily deaths). In fact, starting with September, daily deaths, on average, grew by double-digits percentage points, and the rate of growth accelerated in October by 80 percent compared to September. Global second wave of the pandemic is substantially more deadly (in absolute

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5/11/20: BRIC: Services PMIs October

21 days ago

In the earlier post, I covered BRIC economies manufacturing PMIs for October: https://trueeconomics.blogspot.com/2020/11/31120-bric-manufacturing-pmis-october.html. Now, leet’s take a look at Services PMI.As the chart above illustrates:Brazil Services PMI rose from 47.5 in 3Q 2020 to 52.3 in October. Prior to October, Brazil’s services sector was in a contractionary territory for three consecutive quarters. October marks the second month of above 50.0 readings, although statistically-speaking, September reading was indistinguishable from 50.0 stagnation / zero growth level.Russian Services PMI posted a sharp contraction, falling from 56.8 in 3Q 2020 to 46.9 in October. Russia enjoyed just three months of > 50.0 readings in July-September 2020, implying that the economy is nowhere near a

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3/11/20: Ireland PMIs and Economic Activity Dynamics for October

22 days ago

October PMI data for Ireland is showing serious strains from the pandemic and wave 2 on the economic activity: Manufacturing PMI for October came at a recessionary 48.3, marking a moderation on rapid contraction in the sector activity in September (45.8). This marks the second consecutive month of the Manufacturing PMI reading sub-50, and follows two months of partial (at best) recovery in July and August.Services sector PMI for October was at 50.3 – a statistically indifferent reading from zero growth 50.0 recorded in September.Official Composite PMI was at 49.0 in October, up on 46.9 in September, but still marking a decline in economic activity for the second month in a row. Since Construction sector PMI is not published until mid-month, we only have September reading for the sector.

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3/11/20: COVID19 Update: Nordics

23 days ago

Things are getting more complicated in the Nordics in the wake of the unfolding second wave of the pandemic:The second wave of the pandemic has started first in the Nordics excluding Sweden, but the same wave is now also beginning to manifest itself in Sweden. Adding to the complexity of analysis, Swedish data is now being reported with significant volatility (multiple consecutive ‘0’ observations per week), making higher frequency comparatives basically impossible.Nonetheless, Sweden is now catching up, once again, with the rest of the Nordics in terms of new cases.  In the last 7 days, Sweden averaged 1,204 cases per day (up on 627 average daily rate of new cases in the two weeks prior). Nordics ex-Sweden averaged (adjusting to Swedish population) 3,228 daily new cases over thee last 7

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3/11/20: BRIC: Manufacturing PMIs October

23 days ago

BRIC’s manufacturing PMIs are out for October, marking the start of Q4 2020. Overall, the results reinforce Q3 2020 trends highlighted here: https://trueeconomics.blogspot.com/2020/10/141020-bric-manufacturing-pmis-q3.html. Brazil posted further acceleration in the recovery momentum with Manufacturing PMI rising to 66.7 from 3Q 2020 62.6. 3Q 2020 was the historical record quarter for Brazil’s Manufacturing PMI readings. Brazil’s Manufacturing PMIs have now strengthened every month since May 2020, the last month of sub-50 readings.In contrast to Brazil, Russia Manufacturing PMI slipped again in October, hitting a 5-months low at 46.9, down from 48.9 in September and well below already poor 49.5 reading for 3Q 2020. Prior to 4Q 2020, Russia clocked five consecutive quarters of

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3/11/20: COVID19 Update: Russia

23 days ago

Russia is experiencing a second wave of the pandemic that started around September 10-12 is still gaining speed in terms of new cases and deaths counts:This wave is both deadlier and more severe in terms of new cases than the previous one, although there appears to be less pressure on the public health system so far. Nonetheless, November data to-date shows much higher daily average new infections (subject, partially, to higher rates of testing), and higher daily deaths counts (clearly not accounted for by higher testing):Comparatively, Russia is performing relatively ok, when set against other BRIICS and the U.S. and the EU27 experiences:

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3/11/20: COVID19 Update: U.S. vs EU27

23 days ago

EU27 vs U.S. comparatives for data through November 3:The U.S. has a vastly higher death rate per 1 million population than the EU27 rate: Current death rate per 1 million of population in the U.S. is 707.7Current death rate per 1 million of population in the EU27 is 396.8Put differently, current U.S. death rate per capita is 78 percent above that for the EU27, though this gap is now closing (it was 86% a week ago).Overall counts of deaths in the U.S. are now above the EU27, since July 12Current excess gap is at +65,585. Adjusted for population and pandemic timing differences, the gap is 123,449. The U.S. & the EU27 are in 2nd waves of infections. October 1st to-date, EU27 daily cases have surpassed the U.S. on all but 2 days & deaths on 18 occasionsAcross the board:EU27 second wave is

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3/11/20: COVID19 Update: Countries with > 100,000 cases

23 days ago

Updating tables for countries with > 100,000 cases, data through November 3 ECDC reporting:Both, the U.S. and the EU27 are currently in the new wave of the pandemic (more on this later). That said, across three key metrics: new cases per capita, deaths per capita and deaths per case:The EU27 would have ranked 17th worst case in the total group of 51 countries + EU27; the U.S. ranks 8th worst.The UK ranks 7th worst.Sweden, the ‘herd immunity’ darling ranks 15th worst across the board, 7th worst in deaths per 1,000 cases, and 16th worst in deaths per 1 million of population. For comparison, the Netherlands ranks 20th worst – the only other Nordic country to make it into the table of countries with > 100,000 cases. Peru, followed by Belgium and Spain are the worst three countries across all

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3/11/20: COVID19 Update: Worldwide Cases and Deaths

23 days ago

The pandemic is once again re-accelerating worldwide: Increasing death counts above the relatively stable trend/average of the prior three months is worrying. Growth rates in new infections and new deaths in October and in the first three days of November are also out of line with past months’ experience:Summary tables:Despite relative easing of public anxiety over the public health risks, COVID19 pandemic remains on a full-blown expansionary path and the recent dramatic – exponential – rise in new cases, whilst in part driven by improved testing, is now showing signs of lifting up daily deaths counts, with new deaths coming in at above March-September averages in October and in the first days of November.

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3/11/20: Monte dei Paschi is Eying Another Capital Raise?

23 days ago

Remember them? One of Europe’s largest banks? Check. The oldest bank in the world with continued trading since 1472? Check. The first bank in history to require a sovereign rescue? Check. In 1624, the Medici Grand Duke of Tuscany rushed to guarantee the deposits of a bank at a time of economic crisis. The only bank in known history that has been bailed out at least five times and nationalised at least twice? Check.Yep, right, we have the new old news from Italy’s Banca Monte dei Paschi di Sienna. Just two and a half years after the last Government rescue in 2017 MPS is now rumoured to need another capital injection: https://www.reuters.com/article/italy-banks-monte-dei-paschi/rpt-update-1-monte-dei-paschi-ceo-tells-board-bank-faces-2-bln-euro-capital-gap-source-idUSL1N2HP0EV. The latest

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2/11/20: U.S. Public Health Systems Are Going to Continue Failing After the COVID19

24 days ago

Pre-conditions: amidst ageing population and declining life expectancy, both political parties’ platforms effectively represent extension of the status quo model of healthcare provision.Question: can the U.S. actually sustain any semblance of or pretence at having a functioning healthcare system, given the expected trajectory of demand for healthcare services?Answer: not a chance:Source of the chart: McKinsey (not Communists who support nationalised health).

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2/11/2020: Technological Deepening and De-globalization post-COVID

24 days ago

Interesting insights from McKinsey on changes in technology adoption in response to COVID19 pandemic:In the ed, I marked two types of technological frontier shifts: the ones relating to displacement of status quo-ante in supply chains – re-orientation from China; and the ones relating to technological deepening. Both are the legacy of the U.S. political and economic shift toward de-globalization.

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31/10/20: Gold Coins Market is Still Hedging Residual Covid Risk

26 days ago

Sales of the U.S. Mint gold coins have moderated off their pandemic highs, but remain elevated by historical standards, especially controlling for higher gold prices:Since hitting a pandemic-period high of 216,500 oz in March 2020 (the highest sales volume since April 2013), the demand has moderated through June, topped 145,000 in July and 149,000 oz in August, and has been around 91,500 through the four weeks of October. This puts October sales above the last three years’ average.Average gold weight per coin sold remains relatively elevated and is co-trending with price per oz, most likely indicating lasting FOMO effect (herding by investors). The correlation is weaker than during prior episodes of major crises and recessions, suggesting that the pandemic-period demand is probably less

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27/10/20: COVID19 Update: U.S. vs EU27

October 27, 2020

Quick update to the U.S. vs EU27 charts for COVID19 pandemic:Key stats:The U.S. has a vastly higher death rate per 1 million population than the EU27 rate: Current death rate per 1 million of population in the U.S. is 690.0Current death rate per 1 million of population in the EU27 is 370.3Put differently, current U.S. death rate per capita is 86 percent above that for the EU27, though this gap is now slowly closing (it was 90% a week ago).Overall counts of deaths in the U.S. are now above the EU27, since July 12. Current excess gap is at +67,604. Adjusted for population and pandemic timing differences, the gap is 114,869. The EU27 are now experiencing a second wave of infections. As the result, over October to-date, EU27 new case numbers have surpassed the U.S. in all but 2 days and

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27/10/20: Identity & Risk: My Keynote Talk

October 27, 2020

My recent keynote address to the pTools Virtual Conference 2020: Identity & Risk: Financial Services in a Time of Transformation & Uncertainty (22nd October 2020) is now available at: https://vimeopro.com/user12978768/ptools-virtual-conference-2020.

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27/10/20: COVID19 Update: Russia

October 27, 2020

Russia is now in a full-blown second wave of the pandemic with rapidly accelerating daily deaths counts:Authorities are imposing more severe restrictions on mobility (especially for older members of the public) and are trying to replace older essential workers with younger cohorts. For example, Moscow is trying to roll out substitute teachers (drafted from senior college students) as substitutes for older teaching staff in primary schools. A number of regions (as a federal structure, Russia has highly heterogenous, locally-administered systems) are now running out of emergency health facilities (https://www.themoscowtimes.com/2020/10/27/were-in-hell-russias-second-wave-of-covid-19-is-catching-the-regions-off-guard-a71851), with serious questions being asked as to the apparent lack of

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