economics

Breaking of Old Norms: After decades of disinflation, markets and policymakers developed a set of beliefs, tools, and expectations fitted to low and stable inflation. If a structural shift occurs, these old mental models no longer apply, making it harder to control or predict rising inflation.

o Behavioral and Market Sentiment Changes: As inflation

A wholesale bank’s liabilities are repo borrowings, not deposits. This places US Treasury notes and bonds at the very centre of the modern monetary system. Lately, bank regulators have been attempting to further reduce and even remove Treasuries from capital ratio requirements. This should allow banks to significantly expand wholesale bank lending

According to a March 2024 action plan, the Ministry of Commerce, together with other Chinese government agencies, has offered subsidies to consumers who trade in old automobiles, home appliances, and fixtures for new models. On paper, the plan loosely resembles the “cash for clunkers” program that Washington introduced during the 2008 recession to

So now I want you to imagine what happens if the U.S. and its allies get in a major war with China — as analysts say is increasingly possible. In the first few weeks, much the two countries’ stores of munitions — including drones and the batteries that power drones — will be used up. After that, as in Ukraine, it will come down to who can produce m

The United States’ tax receipts are more correlated to asset prices than most other countries, with tax receipts lagging the performance of the stock market. This can be seen in both absolute terms and year-over-year terms:

They asked a basic question of their portfolio: If we can find many different arbitrage or relative value strategies that all look individually attractive, might they look even better when combined in a certain way?

As such, the expected path of the short rate can have significant, meaningful effects on the repricing of securities nearly immediately, while the level of the policy rate works through the economy over time.

In other words, while there is significant foreign demand for dollars (especially to service the aforementioned dollar-denominated debts), there is not a big foreign demand for Treasuries. That’s a key distinction, and that’s what generally happens when the dollar is strong. When the dollar starts rising into a spike, foreigners hold less and less

To maintain their income, the lords attempted to extract a greater amount from each peasant, as well as trying to dispossess one another (via brigandage and internal warfare).

Importantly, these barriers often strengthen over time, as high returns on capital throw off abundant free cash flow which is in turn reinvested in the business.