I am pressed for time this weekend, so instead of coming up with something entirely new, I thought that I'd do an addendum to my last post. I thought I dug relatively deep in that essay about whether global economic growth is accelerating. Obviously, it isn't easy to a give a clear answer to that question—we're doing economics after all—but the evidence from headline leading indicators suggest that the global economy picked up speed at the end of last year. Regular punters at this space, and my friends in the market, though, weren't impressed. Specifically, I was told that I was neglecting the spread between hard and soft data.
Read MoreI have a feeling that equity markets are setting a trap for investors, but I can't quite figure out which kind it is. Will the last bull be sucked in before the disappointment sets in, or are we now on a sustainable glide path towards new highs with maximum frustration for the sceptics? We didn't get any decisive clues last week. Equity volatility rose a tad, but ranges remain incredibly tight across a number of key asset markets. False breaks are guaranteed, and vol-sellers will continue to play cat and mouse with the heroes trying to straddle the ranges, playing for a breakout.
Read MoreI am generally a tolerant guy, but when it comes to a debate on international capital flows I am a raving lunatic. I have no time for amateurs, and it is my clear impression that president Trump’s trade advisors, and those who agree with them, are just that. You need to understand where I am coming from, though. Specifically, you need to read my two essays about QE, population ageing and the global paradox of thrift. Here is a summary if you don’t want to read the whole thing; read it carefully.
Read MoreI am still willing to give Mr. Trump the benefit of the doubt. We have no actual policymaking to judge yet, and at least some of the people he is surrounding himself with look capable. I admit, however, that the burden of evidence is getting heavy. The president-elect's tweets, on their own, are evidence that he has tendency to act long before thinking. Last week's presser also provided a timely reminder that we are dealing with a volatile character. I understand that infuriating "soft" liberals, such as yours truly, is exactly what Mr. Trump and his strategists want. I have no doubt that the incoming administration's communication "style" is carefully planned. The base loves it! But problems are brewing, chiefly among which is the growing chasm between Mr. Trump and the intelligence apparatus upon which he will so desperately depend for policymaking when he takes office.
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