“We’ve become anesthetized to the absurdity of Chinese growth,” said the CIO. The accelerating rate of credit expansion relative to GDP has no precedent. “They’ve run off the cliff so fast that people seem to think they’ll actually make it to the other side.” China figured out the fiat currency game. “A government can monetize its debts, provided it avoids two extremes internal to its economy; inflation above the soc

Hope all goes well… And that you had a great Thanksgiving. Dusted off an anecdote from 2014 about confidence, trust (see below). Back next Sunday with full weekend notes. Week-in-Review (expressed in YoY terms): Mon: South Korea’s Park moves toward impeachment, EU inflation expectations 11mth high, May acknowledges “UK businesses need Brexit clarity,” France foils terror attack, Sarkozy knocked out of French primary

Week-in-Review (expressed in YoY terms): Mon: South Korea’s Park moves toward impeachment, EU inflation expectations 11mth high, May acknowledges “UK businesses need Brexit clarity,” France foils terror attack, Sarkozy knocked out of French primary with 22% (Fillon leads with 44%, Juppe 28%), Merkel to seek 4th term, Bundesbank “German Q4 growth to accelerate,” Fed’s Fisher “fiscal policy could ease burden on Fed,” S

Overall: “Wouldn’t be surprised if this becomes one of the defining words of our time,” said the President of Oxford Dictionaries, “2016 Word-of-the-Year is Post-Truth!” A few nerds cheered, chortled. I amongst them. I love words, they’re the razor blades separating light from darkness, man from ape. They appear and vanish, from the infinite nothingness, like sub-atomic particles – quarks, gluons, Higgs-Bosons.

Hope all goes well… “This is the anaconda trade,” said Bulldog, panting, eyes bulging. The Trump trade caught most everyone off-sides. The only question is how to get back on track. Of course, you can go with these new trends, haunted by the risk of reversal. You can hold tight, praying that the world has not changed, despite all evidence to the contrary. Or you can try and trade your way out of it. “Every little mov

“Nothing ever stays the same. Ever,” he said. “All the people you’ve known over the years,” he said, squinting, looking back through time. “How many are still in the industry?” I considered the question. So many names, faces, personalities. Most gone. “You got to be adaptable. That’s my nature. I challenge the status quo. I’m a destroyer, a disrupter.” I looked around his office, the abstract artwork all different fr

Overall: “Not half bad for a deplorable,” he said to the mirror, feigning false modesty. “Decent result for someone uniquely unqualified,” he continued, preparing for his Obama meeting, blowing a kiss. Staring back stood the most handsome President-elect that the President-elect had ever seen. Or would ever see. Ever. “Sorry for the whole birther thing Barry. Hillary started it, I ended it. I’m the closer, the winner

Hope all goes well… “It’s like Kuroda replacing Shirakawa at the Bank of Japan,” he said. “Or Draghi replacing Trichet at the European Central Bank,” he continued. “It’s that kind of philosophical shift, but on a far larger scale.” Kuroda stemmed Japan’s multi-decade deflation, and Draghi saved the EU from economic collapse. But America’s $18trln economy is growing near potential at 1.6%, just 4.9% of workers remain

  “What’s good for the US in this case, is not good for emerging markets,” said the CIO. “Emerging markets benefit from a weaker dollar, and you’re not going to get that,” he continued. “Emerging markets benefit from global capital flows moving in their direction and that’s not happening either.” Back in February, emerging markets were in sharp decline, driven by (1) a strong dollar, (2) rising US interest rates

Hope all goes well… “Markets are most dangerous when they’re extremely overbought and oversold,” said Yoda high in the Rockies, the jagged landscape freshly dusted. “The most probable risk is always a sharp reversal,” he said, looking far into the distance, back in time, so many patterns. “That’s why it’s this outcome that they experience most often – it’s this risk they most fear.” Yoda paused, the decades swi