Founders: Geopolitical Comment. The Anti-BRICS Push?
Assume the China thing is that bad. Then other Geo-economic issues must be weighing on our Bonds even more so far.
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Today
Geopolitical comment:
Isn’t it fascinating that the China-is-deflating narrative has come from out of nowhere to be a the cause cé·lè·bre at US Banks just as the BRICS Summit is approaching and as the Ukraine offensive fails? We don’t doubt the problem is real. It has been for years. But why focus on it now?
Literally out of nowhere.. For the past 6 months all we have been hearing is… “China reopening is gonna boost commodities”. Then, with almost no transition period admitting “Well, it’s taking longer than we thought” they start hammering China on deflationary policies.
Its almost as if the Banks were ignoring their being incorrect for 6 months and are now pivoting to blaming China for their not being able to see China’s problems. And Goldman’s Jeff Currie also retired…. lol
Why do we note all this? Given the implosion of US Bonds, can the China thing be as bad as it is being made out to be?
Super Tinfoil Hat comment:
We are looking at the intersection of US Geopolitical interests and US Bank analysis interests much closer now. This is how the US behaves in war going back to the first Iraqi war where we saw this pattern first.
Admittedly we are looking for more of that and are biased based on the turnaround in behavior of Biden towards Big Oil recently. But you gotta admit this all fits very snugly into a more Corporatist US economic policy push we identified early on with Brynne Kelly last year.
Anyway… all of a sudden people care about China say more than normal.. meanwhile we are about to move on to the next thing trying to stay ahead of the herd for all of us.
Face Value.. US Bonds How?
Assume the China thing is that bad. Then other Geo-economic issues must be weighing on our Bonds even more so far.
Maybe Japan manifesting as the leader in global rates is once again asserting itself? They set the ceiling on rates on the way down. Now they set the floor on the way back up.
Developing Geopolitical issues that will have an effect on markets
Japan Yield YCC tweaking- implications for US YCC, Financial repression preview
China’s inability to recover and their policy reaction to it- Will affect Fed hiking bias
Ukraine counteroffensive failure and the pivot towards chatter of splitting Ukraine for NATO purposes- Whither Zelensky, build a new wall?
These on top of all the normal stuff we’re dealing with.
Cheers
Below:
JPM Morning Intel
GSTrader 1- Morning Email 1
GSTrader 2- FOMC Recap email
GSTrader 3- China take
Citi- Compares China to Japan
Pantheon- pretty good “catch up” piece for US economics
CA- bond comment