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Jeremy Grantham Discusses Recession Call, Fed Policy, Market Bubbles - Bloomberg

The Fed’s record on these things is wonderful. It’s almost guaranteed to be wrong. They have never called a recession, and particularly not the ones following the great bubbles. They prided themselves in stimulating the bubbles. They took credit for the beneficial effect of higher asset prices on the economy. They have never claimed credit for the deflationary effect of asset prices breaking. And they always do.

Bond Bulls at JPMorgan, Allianz Keep Piling Into a Bet Gone Bad - Bloomberg

For his part, JPMorgan’s Michele is confident bond yields will fall once the Fed winds down its tightening cycle, long before the first rate cut. “Whether the US economy enters recession or a soft landing, the bond market rallies after the last rate hike,” he said. “The Fed may keep rates at these levels for quite some time, but growth and inflationary pressure continue to slow.”

Debt Ceiling: How the Treasury's Rainy Day Fund Quietly Saved the Day - Bloomberg

Despite the worsening conflicts over trade and intellectual property, the US and China continue to be mutually dependent in many ways. Sosnick also pointed out the irony that China’s massive fiscal and credit expansion in late 2008 was a key element in helping the rest of the world recover from the Global Financial Crisis. Its continuing difficulties are in part caused by the need to pay for that stimulus: Never mind that it was Chinese expansion that helped pull the world out of the Global Financial Crisis, nor that China-focused globalization was a key force in keeping global inflation in check for over a decade. Let’s also put aside that a solid Chinese post-Covid economy was supposed to be a key factor boosting multinational companies’ profits and a key element in enabling a soft landing or even a “no landing” scenario. Why should stuff going on halfway around the world disrupt the trading patterns that have been working so well in US markets recently?

New theory derived from classical physics predicts how economies respond to major disturbances -- ScienceDaily

The concept for the new model is inspired by classical physics: Linear response theory (LRT) explains, for example, how electric or magnetic substances react to strong electrical or magnetic fields. This is known as susceptibility. It can be measured with special devices, but also be mathematically derived from properties of the material. "We show that LRT applies just as well to input-output economics," says Peter Klimek. "Instead of material properties, we use economic networks; instead of electrical resistance, we determine the susceptibility of economies, their response to shocks." Visualizing economies To make it intuitively understandable how economies work, scientists at the CSH employ an interactive visualization tool. It will be constantly fed with new data until the final version should represent the whole world economy. The tool visualizes the various dependencies of countries and production sectors. "Users can change all kinds of parameters and immediately see the effects across countries and sectors," says Stefan Thurner. A preliminary version, showing Trump tariff effects on Europe, can be seen at

America’s ‘Retail Apocalypse’ Is Really Just Beginning

The debt coming due, along with America’s over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy. There will be displaced low-income workers, shrinking local tax bases and investor losses on stocks, bonds and real estate. If today is considered a retail apocalypse, then what’s coming next could truly be scary.