The world’s largest economy continues to post upbeat economic data as 2021 draws to a close, but there are hints that growth may suffer in the new year.
Macro Briefing: 22 December 2021
* Biden says government will provide 500 million free Covid home-testing kits
* Putin warns of possible military response to what he sees as NATO pressure
* Moderna may produce Omicron booster within weeks, says company CEO
* Israel begins offering a fourth dose of coronavirus vaccine
* US life expectancy slipped 1.8 years in 2020, reports CDC
* Shipping giant Maersk to acquire Hong Kong-based LF Logistics
* US current account deficit at biggest gap in 15 years in third quarter:
What’s Driving Bitcoin? Factor Analysis Profiles, Part I
What makes bitcoin tick? There are many theories, ranging from a digital-age store of value to the world’s greatest Ponzi scheme. Narratives are interesting and perhaps useful, but can we quantify bitcoin’s risk betas with specificity? Let’s give it a try in a series of factor-analysis tests.
Macro Briefing: 21 December 2021
* Omicron variant is now the dominant coronavirus strain in US, says CDC
* Omicron expected to slow world economy by half in Q4 vs. Q3
* Global merger and acquisition activity rises to record $5 trillion-plus in 2021
* Companies set to install record amounts of batteries on US electric grid this year
* Why did Sen. Manchin oppose Build Back Better Act? Coal is probably a factor
* US Leading Economic Index up “sharply” in Nov, signaling upbeat outlook:
REITs and Bonds Were Havens During Last Week’s Market Losses
US real estate and fixed-securities provided diversification benefits during last week’s widespread selling that weighed on most other markets around the world, based on a set of ETFs through Friday’s close (Dec. 17).
Macro Briefing: 20 December 2021
* Build Back Better Act’s future in doubt after Sen. Manchin pulls support
* Goldman Sachs cuts US growth outlook after Manchin rejects Build Back Better
* Omicron ‘raging around the world,’ says White House’s top medical adviser
* Moderna finds its booster sharply raises antibodies to fight Omicron
* Turkey’s economic crisis threatens Europe’s stability
* Central banks see risk of sustained inflation due to Omicron
* China cuts a benchmark lending rate for first time since April 2020
* US 10-year Treasury yield starts week near a three-month low:
Book Bits: 18 December 2021
Edited by Youssef Cassis and Catherine R. Schenk
Summary via publisher (Oxford U. Press)
The chapters in this book reflect on people’s relationships with past financial crises – from public opinion to business leaders and policy makers. In connection with financial crises, Remembering and Learning from Financial Crises addresses three fundamental questions: first, are financial crises remembered, and if so how? Second, have lessons been drawn from past financial crises? And third, have past experiences been used in order to make practical decisions when confronted with a new crisis? These questions are of course related, yet they have been approached from different historical perspectives, using methodologies borrowed from different academic disciplines. One of the objectives of this book is to explore how these approaches can complement each other in order to better understand the relationships between remembering and learning from financial crises and how the past is used by financial institutions.
Outlier Risk, Part III
In first two previous articles in this series (see here and here) we reviewed basic applications for identifying outliers in data set – a crucial task for analyzing financial and economic time series. Let’s push on and kick the tires on another tool: the Hampel filter, another methodology to identify extremes values in a data set.
Macro Briefing: 17 December 2021
* Build Back Better spending bill will be delayed until next year, says Biden
* Central banks see inflation as bigger threat than Omicron variant
* Bank of England is first major central bank to raise interest rates in pandemic
* US economy remains resilient in December via PMI survey data
* US industrial output continued rising in November
* Jobless claims rose last week but remain close to lowest level in decades
* US housing starts rose more than forecast in Nov, reaching 8-month high:
Still Waiting For Inflation To Peak
The Federal Reserve yesterday decided to take a slightly more hawkish position on inflation, laying the groundwork for several rate hikes in 2022. Part of the calculus, probably the dominant part: inflation continues to accelerate.