How do you know if Carol K. or myself are not ChatBots?
The [pandemic] crisis accelerated the adoption of analytics and AI, and this momentum will continue into the 2020s, surveys show. Fifty-two percent of companies accelerated their AI adoption plans because of the Covid crisis, a study by PwC finds. Just about all, 86%, say that AI is becoming a “mainstream technology” at their company in 2021. Harris Poll, working with Appen, found that 55% of companies reported they accelerated their AI strategy in 2020 due to Covid, and 67% expect to further accelerate their AI strategy in 2021. – HBR
The “surge in demand” is congesting the global container ports. That is, it’s a primarily (though not all, and getting less so by the day, at the micro level) an excess demand issue creating the shortage economy.
Some $10.4trn of global stimulus has unleashed a furious but lopsided rebound in which consumers are spending more on goods than normal, stretching global supply chains that have been starved of investment. Demand for electronic goods has boomed during the pandemic but a shortage of the microchips inside them has struck industrial production in some exporting economies, such as Taiwan.
...The risk now is that strains in the economy lead to a repudiation of decarbonisation and globalisation, with devastating long-term consequences. That is the real threat posed by the shortage economy. – Economist, Oct 9
American consumers are going to get a sense of what life is like in a more closed economy, one with heavy trade restrictions, this Christmas with empty shelves and big price spikes. We are not optimistic they will be able to make the right connection and proper extrapolations but we do hope we are wrong.
We are reposting a repost of a piece we did last September.
Our sense is Mr. Xi is testing and doing the calculus if the U.S.is willing to fight WWIII over Taiwan.
Taiwan and U.S. officials have expressed alarm over nearly 150 flights near Taiwan in the past week by Chinese military aircraft. The Chinese aircraft have included J-16 jet fighters, H-6 strategic bombers and Y-8 submarine-spotting aircraft and have set a record for such sorties, according to the Taiwan government. – WSJ, Oct 7
Taiwan is now the most geopolitically important country in the world in a way that no Middle Eastern country ever was. Semiconductors are the new oil, and Taiwan produces almost 2/3rd’s of semi global manufacturing.
Loose Lips, Sinks Battleships
No doubt Mr. Xi was taking copious notes as he viewed and listened to this very destabilizing and damaging interview, in which the POTUS effectively stated that America’s NATO allies were expendable. We called out how dangerous this talk was in our 2018 post, The Day “Strategic Ambiguity” Died..
Tucker Carlson: So membership in NATO obligates the members to defend any member that is attacked. So let’s say Montenegro, who joined last year, is attacked, why should my son go to Montenegro to defend it from attack?
President Trump: I understand what you are saying. I have asked the same question. You know Montenegro is a tiny country with very strong people… They may get aggressive, and congratulations you are in World War III…But that is the way it was set up, don’t forget I just got here. – GMM, July 2018
Trump is gone but Mr. Xi knows the country is divided and 74 million Americans voted for Mr. Trump.
If the Evergrand crisis spins out of control, will Mr. Xi need to Wag the Dog?
摇狗 Yáo gǒu?
As with all things in the market, it doesn’t matter until it matters. It is starting to matter.
Currently, low risk, high impact event with the temperature rapidly rising.
Nevertheless, we have given up on how markets will react — to just about any and everything, for that matter — as tensions ratchet up in the Straight. We have are suspicions, and they don’t make us sleep better at night even in this everything market where everything is bullish.
Protect your Blind Side, folks. Keep the Taiwan Straight on your radar.
One of GMM‘s most excellent followers, who we very much like and respect, responded with this:
In an interview with Fox’s Tucker Carlson last night, President Trump seemed to question the raison d’être of NATO and foreign alliances in general.
Tucker Carlson: So membership in NATO obligates the members to defend any member that is attacked. So let’s say Montenegro, who joined last year, is attacked, why should my son go to Montenegro to defend it from attack?
President Trump: I understand what you are saying. I have asked the same question. You know Montenegro is a tiny country with very strong people… They may get aggressive, and congratulations you are in World War III…But that is the way it was set up, don’t forget I just got here. – The Day “Strategic Ambiguity” Died. GMM July ’18
A nice little factoid to impress at a cocktail or…err…Cannabis party as we usher in the new quarter.
October is here, and in the Northern Hemisphere, that often means the days are flush with falling leaves, chilling weather, and growing anticipation for the holiday season.
According to the original Roman republican calendar, October was the eighth month of the year rather than the ninth. The Roman calendar was only 10 months long and included the following months: Martius, Aprilis, Maius, Junius, Quintilis, Sextilis, September, October, November, and December. As you can see, January and February hadn’t been added to the calendar yet!
Like its neighboring months September,November, and December, the month of October kept its numerical name, even after Julius Caesar expanded the calendar year from 10 months to 12. October entered Old English via Old French, replacing the English vernacular term Winterfylleð (“Winter full moon”). – Dictionary.com
Given the extreme valuations of all most all asset classes, coupled with the massive amount of money in the global financial system, markets are now really stretching, looking for, and actually attempting to create scarcity as a useful delusion to justify, rationalize, and drive speculation.
Maybe I will start collecting poop as an “anthropological asset,” put it the blockchain and super charge the price ramp by snapping a few pictures of each sample, converting them to NFTs to load up to the internet.
Then again, maybe all this is signaling the start of a big, big inflation cycle and the markets are looking to get out of cash and protect their purchasing power. But that’s too rational.
Can you believe what the markets have become, folks? It is hard to see clearly when everybody is making money.
Global Macro Monitor 