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Tag Archives: global trade

Is There Enough?

It’s just not fast enough. And with the labor market spitting out numbers across a broad economic cross-section that look increasingly tired suggesting an economy running out of momentum, there’s the added urgency of time. Late summer figures still aren’t close to where they need to be even though when you view them in isolation they can look tremendous.Start with PMI’s, a bunch of them from last week and early this week. Many are the highest in many months, years for quite a few. But...

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Getting Harder to Spell T-R-A-D-E Without An ‘L’

The good news: the World Trade Organization (WTO) has crunched the numbers for 2020’s horrific second quarter and where global trade is concerned it may not have been as bad as first feared. Make no mistake, it was bad but not crashing down as far as the most pessimistic of the dreamed-up scenarios. Given where things stand now with only partial data and related soft figures to go on, the organization believes trade volumes across the global economy suffered a 14% reduction in Q2 from Q1....

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19/8/20: The VUCA World of World Trade

WTO projections for global merchandise trade by volume:Let's take a closer look. Optimistic scenario is for a 13% y/y drop in merchandise trade flows. Pessimistic one is for a 30% drop. Swing is 17 percentage points. These are not forecasts, but are uncertain guesses. We are in a VUCA world, folks.Let's take a second look: COVID19 shock will be permanent (new trend line post-recovery is permanently below old trendline and flatter) with a minor impact post-2022 that will compound over longer...

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Shoe V arning

It’s no wonder we’re obsessed with shoes these days. Even the V-people, as I’ll call them, keep one wary eye glued looking behind them. Survivor’s euphoria means a lot of potentially bad things, only beginning with a false sense of survivor-hood. We’ve so far made through only one big test, there are likely more to follow. And if they do, when they do, the system greets them with a significantly weakened foundation. A lot of times confronted with major upheaval the push back from it uses up...

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A Japanese Stall?

In sharp contrast to the sentimental deference towards central bank stimulus exhibited by Germany’s ZEW, for example, similar Japanese surveys are starting to describe potential trouble developing. Like Germany, Japan is a bellwether country and a pretty reliable indicator of global economy performance. Both of these places had solidly indicated the globally synchronized downturn long before it was recognized in any mainstream source (with central bankers last to figure it...

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Second Wave Global Trade

Unlike some sentiment indicators, the ISM Non-manufacturing, in particular, actual trade in goods continued to contract in May 2020. Both exports and imports fell further, though the rate of descent has improved. In fact, that’s all the other, more subdued PMI’s like Markit’s have been suggesting. Getting closer to a bottom.Unlike any of the sentiment numbers, however, these trade figures better demonstrate just how far from a rebound let alone recovery the world might be. The hole is...

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26/6/20: Trade Restrictions: European Companies

BOFIT newsletter out today highlights the scale of restrictive trade measures applicable to the EU exporters across a number of significant markets:Of eleven countries included, three managed to lower trade and investment barriers applying to the EU companies over 2017-2019 period, two countries had unchanged barriers, and six showed increasing barriers to trade and investment. In a way, this reflects a shift away from trade and investment globalization focus on the last three decades toward...

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Someone’s Giving Us The (Trade) Business

The NBER has made its formal declaration. Surprising no one, as usual this group of mainstream academic Economists wishes to tell us what we already know. At least this time their determination of recession is noticeably closer to the beginning of the actual event. The Great “Recession”, you might recall, wasn’t even classified as an “official” contraction until December 2008 – a full year after the NBER figured the thing had begun.Rather than becoming much better at spotting changes in the...

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Same Trade, Different World

It was another one of those good news, bad news data days in China. Unfortunately, the good news just doesn’t make much sense. That was Chinese exports which, according to the country’s General Administration of Customs, increased by 4.5% year-over-year in April 2020. Given the state of the world last month, exports were expected to drop by 12 to 14% (depending on who you asked).Like the last couple years of the US unemployment rate, increasingly China’s trade data finds itself in isolation...

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Synchronized, Like A Cheap Imported Suit

Trading partners like Mexico didn’t have a labor participation problem by which to hide the economic downturn last year. The whole idea of “decoupling” in the 2018 sense of the word was how the US economy, by virtue of its 50-year low unemployment rate, couldn’t possibly be as weak as it increasingly appeared overseas. The US was good, they kept saying. If there was a problem it was China. And Germany. South Korea. Japan. South America. All of Europe. Mexico, too.The truth was more...

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