Thematic Markets

New research from Thematic Markets! Vice President Harris's advance in the polls changes the constellation of geopolitical risks, albeit perhaps not in the ways the consensus supposes. But the ongoing Russian assault on the Ukrainian town of Pokrovsk has the potential to rapidly shift the geopolitical landscape, upending calculus over the US election. https://lnkd.in/ekCnvZp7 #geopolitics #USelection #risk #volatility

New “The Grant Williams Podcast” has dropped with yours truly. Grant Williams is truly one of the best interviewers out their and if you aren’t already a subscriber to him, let this serve as an excuse to do so as we cover a lot of ground on the potential for polling errors this election, the potential domestic & geopolitical implications, and of course what the markets have right and wrong about the “Trump Trade”. https://lnkd.in/euRECCmQ

As an economist - ie one of those people who thinks they can answer every question with authority - I was negligently unaware that accountants have their own definitions for hyperinflation and sensible rules for dealing with them. As high levels of debt combine with sustained higher interest rates, more and more countries, particularly in emerging markets, will be at risk of breaching accountants’ definitions of hyperinflation. If you invest in EM, you should familiarize yourself with IAS 29 and its application. No one does a better job of putting complex accounting rules into plain English (even for we troglodytes of the species homo economicus) than Joy Dafinone at The Joy of Accounting.

It's a mistake to view China as a market economy interested in preserving the current "rules-based" Western international order. It isn't and it doesn't.

On Tuesday, 8 November 2016, I was presenting my market views to a large group of clients assembled at the Barclays annual outlook in Abu Dhabi - organized by the elegant & irreplaceable Walid Mezher - and I closed my presentation with a confident prediction that shocked the entire room: Donald J. Trump, not Hillary R. Clinton, would win the US election taking place that same day on the other side of the world. That evening, I climbed onto a plane back to London and landed the next morning to an explosion of texts and emails: "How did you know?!!!" Four years later - amid lockdowns, so no big presentations - I again defied the polls and predicted that, despite President Trump being down by 7.4 points in the polls, the election would be a nail biter and Mr. Trump would lose narrowly. Again, the morning after, the explosion of texts and emails repeated. The source of the polling errors is quite obvious if you know where to look. If you want to know how they might play out in this election, I've detailed them in my latest research. How can you afford not to subscribe to Thematic Markets? https://lnkd.in/gaqb8ekm #Election2024 #Polling #Markets

Deputy Governor Uchida of #BoJ nicely points to #BeingIsBelieving effects in Japan in 7 Aug speech: “Japanese firms' behavior is diverging from what it was during the period of deflation. During that period, firms tended to avoid passing on cost increases to prices as much as possible. As a result, the degree to which rises in import costs were passed on to consumer prices was moderate. Over the past few years, the pass-through of higher import costs to consumer prices has been evident...amid labor shortages, this pass-through has led to wage increases, thereby pushing up underlying inflation.” (p.8, chart 14 below) I.e. once consumers' & businesses' inflation expectations shift from flat/falling to rising, they act in ways that reinforce inflationary tendencies. Uchida-shi is exactly right and that is why the war against inflation ain't yet won, despite the hallelujahs over June US inflation. Full speech: https://lnkd.in/ew_eymcF #inflation #Japan #markets

My quick take on the market washout: what it means, what's changed, and what risks and opportunities it presents. https://lnkd.in/eXMqc-PZ #Markets #Volatility #Risk

“Events, my dear boy, events.” Even by recent standards, the last month was a humdinger of monumental, bizarre and disruptive events.  Many confirmed the risks that I’ve warned about all year; all informed my views on the likely future path of the global political economy. With so much to cover, I’ll dig into the details in a series of forthcoming articles, but here’s my snap mark-to-market on the eight key risks I warned of at the year’s start, the trends of #Localization, #GlobalEntropy, bifurcation, and the #Uncertainty they engender. https://lnkd.in/eeUGYvdi #geopolitics #uselection #localization #assetallocation

Pragmatic populists? Markets worry that Europe's lurch right in the European Parliamentary elections will push European finances to the brink. Markets are right to worry about Europe's fiscal condition -- indeed, they have not even realized the extent of the problem -- but populism isn't its cause. Indeed, polling suggests that voters' shift right across the spectrum was driven by concern over Europe's economic, fiscal and defense insecurity. That interpretation is reinforced by the policy choices of existing populist-led governments in six European countries. Re-examining European fiscal risks in the light of the Politics of Rage's real causes leads to differing conclusions over where European market risks lie. Find out what the conventional wisdom is missing in Thematic Markets' latest research: #PoliticsOfRage #populism #debt #euro #fiscalpolicy https://lnkd.in/g9ehbiSd

The final installment in the serialization of Global entropy: Enter the dragons. Expect the unexpected. If you are seeing this for the first time, I’ve been concerned about the accelerating deterioration in the global order for some time.  Last fall, I published a free article providing a framework for thinking about the causes of Global entropy – the disintegration of the global order – the two paths it might take, violently abrupt or continued evolution, and the prospective order that might replace it. Due to its increasing relevance, I’m republishing it here on LinkedIn in a serialized form over the next two weeks.  If you’d like to read the original, it is available at the Thematic Markets Substack here: https://lnkd.in/etyRU8_i #geopolitics #china #russia #war #internationalrelations #globalorder