Monthly Archives: May 2020

Book Bits | 23 May 2020

Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace
Matthew C. Klein
Excerpt via Barron’s
The open global trading system has been in trouble for years. The coronavirus could push it over the edge, and if we’re not careful, the world could see a breakdown of the international economic and financial order, as happened in the 1930s.
The most obvious impact of the virus on trade is that Covid-19 has forced governments, businesses, and consumers to appreciate the vulnerabilities created by global supply chains. Shortages of everything from meat to disinfectant wipes and face masks have been exacerbated by export controls imposed by China, Europe, and other producers.
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Research Review | 22 May 2020 | Tail Risk

The Law of Regression to the Tail: How to Mitigate COVID-19, Climate Change, and Other Catastrophic Risks
Bent Flyvbjerg (University of Oxford)
13 May 2020
Regression to the mean is nice and reliable, regression to the tail is reliably scary. We live in the age of regression to the tail. It is only a matter of time until a pandemic worse than Covid-19 will hit us, and climate more extreme than any we have seen so far. What are the basic principles for navigating such risks, for government, business, and the public?
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Macro Briefing | 22 May 2020

US set to withdraw from another nuclear arms treaty: CNN
In threat to Hong Kong’s independence, China signals stricter oversight: BBC
China omits growth target, suggesting challenging economic outlook: WSJ
US-China tensions rise on new front: financial markets: CNBC
Economist predicts 40%-plus of lost jobs in US are gone forever: NY Times
UK retail spending crashed 18% in April–biggest monthly drop on record: FT
US Leading Economic Index continued to fall in April after record drop: CB
US existing home sales fell sharply in April: CNBC
Philly Fed Mfg Index in May still reflects deep sector downturn: MW
US jobless claims continued to surge last week, rising 2.4 million: CNBC
Composite PMI survey data for April points to deep loss for US GDP in Q2:

Macro Briefing | 21 May 2020

US-China tensions expected to deteriorate ahead of US election: CNBC
Is a 2nd virus wave an economic threat? Maybe not, says Fed’s Bullard: WSJ
Today’s US jobless claims report expected to show 2.4 million rise: Reuters
China imposes limited lockdown after new coronavirus outbreak: WSJ
Eurozone PMI for May: economic contraction eases as lockdowns lift: IHS Markit
Japan’s severe economic contraction continues in May via PMI data: IHS Markit
Highly indebted ‘zombie’ companies at risk in US economy: CNBC
All 50 states are reopening their economies. What happens next? NY Times
S&P 500 rises to highest close since March 5:

Large-Cap Growth Leads US Equity Factors With Gain For 2020

Shares of growth stocks are in a class of their own this year after ticking into positive territory this week for year-to-date performance. The fractional gain through yesterday’s close (May 19) sets this corner of factor investing apart from the rest of the field, which remains in various degrees of loss so far in 2020, based on a set of exchange-traded funds.

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Macro Briefing | 20 May 2020

Economic reopenings proceed throughout US and around the world: WSJ
New virus outbreak in China highlights struggle to contain Covid-19: Bloomberg
CBO projects 38% decline in US economic output in Q2: CNBC
Iranian navy says it will continue to operate in Gulf after US warning: Reuters
Taiwan president rejects China’s plan for reunification: Reuters
UK inflation fell in April to slowest pace since 2016: Bloomberg
World trade volumes expected to “fall precipitously” in 1H:2020: WTO
US housing starts fell 30% in April and settled at a 5-year low: CNBC

Macro Briefing | 19 May 2020

Risk managers expect lengthy global recession: Reuters
Signs that recovering Covid-19 patients are no longer infectuous: BBG
Trump considers permanently cutting US funding to World Health Org: WSJ
Moderna reports encouraging results from Covid-19 vaccine test: CNN
Economic expectations in Germany rebound: MW
UK reports record surge in jobless claims in April: MW
US home builder sentiment rebounds slightly in May after sharp drop: CNBC