Global Macro Monitor

QOTD = Quote of the Day

Oh, dear!  I wonder if the FOMC is looking at the deflationary bust in virtual real estate?  Will Jay Powell mention it in his presser today?

Do you think real estate in the metaverse is at risk due to climate change?  After my last two homes where my family lived were incinerated in the Northern California wildfires,  I may be moving to a nice virtual beach house in the metaverse soon, and very soon. Escape to the metaverse!

By some accounts, virtual real estate in the metaverse has dropped by about 80 percent in value from its high point, more than the decline in physical real estate during the same period. – Hamza Khan, McKinsey & Co

The following chart suggests the stock market still has an outsized influence on the economy.  In theory, the market capitalization to GDP ratio should be a mean reverting time series.  

We don’t know for certain, but we suspect there is still way too much liquidity/money, however loosely defined, in the system.  Markets don’t rip as they did in January with tight money.   

If the Fed downshifts too much, the stock market rips, and financial conditions will ease bigly.  Consequently, inflation will turn up from a much higher base.   

Godspeed, Jay Powell!

QOTD = Quote of the Day

What a great alt-definition of George Soros’ Reflexivity

U.S. GDP Surprises To Upside, Big Inventory Build

Global Sector PMIs & Margin Pressures

Global Shipping Costs

Shrinking Labor Forces

Strong Labor Markets

India Rising

China’s Excess Savings Firepower

China’s Recovery Driving Base Metals

Lithium Mining

Peak Gasoline Demand

U.S. Car Efficiency 

Government Spending On Pensions

Bear Market In Beef Eaters

Expected Drivers Of The Equity Market

Profits And Wages

QOTD: Quote of the Day

South Korea faces an existential crisis with a plunging birth rate.  The country has the lowest fertility rate in the world, reaching the “dead cross,” when deaths outnumbered births, in 2020,  a decade earlier than expected. South Korea’s statistics agency put the fertility rate at 0.81 for 2021; by the third quarter of 2022 it was 0.79.  The country’s patriarchal society and misogyny deserves much blame.  See here.

The birth strike is women’s revenge on a society that puts impossible burdens on us and doesn’t respect us. – Jiny Kim, NYTimes

The S&P500 did all the right things this week, closing at its high for the month/year, making a new intraday high for the month, and breaking above its downtrend line.  As we noted last week, the stock index is trading in a 300-point range, bookmarked at its December high and low, at 4100.96 and 3764.49, respectively.  The S&P was rejected right at the top of the range today at its intraday high of 4094.21.  Watch for a breakout or fail at the key level of 4100.96.  

The key .50 fib at 4155.10 is a big number.   

FOTD:  Factoid of the Day

This is hard to believe, but ZME has high cred ratings. 

In NYC, there are more Italians than in Rome, more Irish than in Dublin, and more Jews than in Tel Aviv. –  ZME Science