Harrison Stetler Prime Minister François Bayrou is gambling his political survival on a confidence vote, in a probably doomed attempt to force France’s hung parliament to accept an austerity budget. The post The French Center Plays Brinkmanship With Fiscal Crisis appeared first on The Nation.
Starting teaching today a course on the financial system. Here are some graphs of the current situation, through August. Addendum:
ASIA: The major Asian stock markets had a mixed day today: • NIKKEI 225 decreased 371.60 points or -0.88% to 41,938.89 • Shanghai decreased 44.577 points or -1.16% to 3,813.557 • Hang Seng decreased 153.12 points or -0.60% to 25,343.43 • ASX 200 decreased 161.80 points or -1.82% to 8,738.80 • SENSEX increased 409.83 points or 0.51% to 80,567.71 • Nifty50 increased 135.45 points or 0.55% to 24,715.05 The major Asian currency markets had a mixed day today: • AUDUSD increased 0.00299 or 0.46% to 0.65485 • NZDUSD increased 0.00173 or 0.30% to 0.58784 • USDJPY decreased 0.601 or -0.40% to 147.974 • USDCNY increased 0.00158 or 0.02% to 7.13986 The above data was collected around 12:15 EST. Precious Metals: • Gold increased 30.23 USD/t oz. or 0.86% to 3,565.01 • Silver increased 0.303 USD/t. oz. or 0.74% to 41.213 The above data was collected around 12:18 EST. EUROPE/EMEA: The major Europe stock markets had a green day today: • CAC 40 increased 65.46 points or 0.86% to 7,719.71 • FTSE 100 increased 61.30 points or 0.67% to 9,177.99 • DAX 30 increased 107.47 points or 0.46% to 23,594.80 The major Europe currency markets had a mixed day today: • EURUSD increased 0.0043 or 0.37% to 1.16757 • GBPUSD increased 0.00703 or 0.53% to 1.34515 • USDCHF decreased 0.00207 or -0.26% to 0.80324 The above data was collected around 13:01 EST. US/AMERICAS: US Market Closings: Dow declined by 24.58 points (-0.05%) to 45,271.23 S&P 500 advanced by 32.72 points (+0.51%) to 6,448.26 NASDAQ advanced by 218.10 points (+1.03%) to 21,497.73 Russell 2000 declined by 3.11 points (-0.13%) to 2,349.10 Canada Market Closings: TSX Composite advanced by 136.86 points (+0.48%) to 28,752.48 TSX 60 advanced by 7.90 points (+0.47%) to 1,704.79 Brazil Market Closing: Bovespa declined by 553.18 points (-0.39%) to 139,781.98 ENERGY: The oil markets had a mixed day today: • Crude Oil decreased 1.598 USD/BBL or -2.44% to 63.992 • Brent decreased 1.469 USD/BBL or -2.12% to 67.671 • Natural gas increased 0.0356 USD/MMBtu or 1.18% to 3.0446 • Gasoline decreased 0.0261 USD/GAL or -1.28% to 2.0164 • Heating oil decreased 0.0144 USD/GAL or -0.61% to 2.3600 The above data was collected around 13:03 EST. • Top commodity gainers: Natural Gas (1.18%), Orange Juice (1.93%), Palladium (2.06%) and Platinum (2.33%) • Top commodity losers: Canola (-1.85%), Crude Oil (-2.44%), Brent (-2.12%) and Oat (-1.80%) The above data was collected around 13:11 EST. BONDS: Japan 1.6370% (+3.06bp), US 2’s 3.61% (-0.033%), US 10’s 4.2080% (-5.5bps); US 30’s 4.89 (-0.067%), Bunds 2.7370% (-5.29bp), France 3.5410% (-4.44bp), Italy 3.640% (-7.07bp), Turkey 32.815% (+259.5bp), Greece 3.469% (-5.2bp), Portugal 3.178% (-6.3bp); Spain 3.345% (-5.8bp) and UK Gilts 4.7490% (-6.03bp) The above data was collected around 13:15 EST.
Leer en Español Global economy to lose steam this year: The FocusEconomics World GDP Consensus Forecast—based on 3,500 individual projections for GDP growth across 198 countries—shows that the global economy is on track for its slowest growth since the Covid-19 slump of 2020 this year, dragged down by softer expansions in major players like Brazil, Canada, China, Mexico, Russia and the U.S. But the picture isn’t bleak everywhere—Africa and the Middle East are set to accelerate, powered by rising OPEC+ oil output quotas that are giving regional GDP a welcome boost. Forecasts display U-shaped trend: As the graph below shows, our World GDP Consensus Forecast was slashed in the wake of Donald Trump’s announcement of reciprocal tariffs, but has since recovered somewhat. Economic activity in many parts of the world has proved more resilient than expected, higher tariffs in the U.S. are taking a while to filter through to prices, and the global AI boom is girding tech exports and investment. G20 countries see divergent trend: The below graph shows the evolution of our 2025 GDP growth forecasts for select G20 countries over the last six months. Argentina has seen the largest upgrade, as the government’s aggressive reform agenda has borne fruit. China’s forecasts have also been upgraded—superficially surprising, given the country has been subjected to hefty new U.S. tariffs. Chinese economic activity has been boosted by record government bond issuance, strong global electronics demand, rapid electric-vehicle-sector growth, export frontloading and rerouting to avoid U.S. tariffs, and an expanded trade-in scheme that boosted household spending. At the other end of the spectrum are the economies of South Korea and Mexico, both of which are likely to suffer fallout from a more protectionist U.S. Insight from our panelists: On the outlook for the global economy, EIU analysts said: US trade protectionism is being met mostly with restraint in terms of retaliation, but deep policy uncertainty is moving the global economy into a worse equilibrium. The risk of policy missteps will be high in this environment of rapid change. Although we forecast that global short-term interest rates will continue to fall, the unpredictable application of US tariffs will make it difficult for central banks to decipher inflation trends. Under the second Trump administration, the US is working to rebalance its economic and security relations. The manner in which the agenda is being pursued, however, will strain traditional alliances and drive geopolitical and economic realignment. Conflict risk and geopolitical brinkmanship will be key features of the global landscape, contributing to high risk premia and sustaining the risk of commodity price shocks. On U.S. trade policy, ING’s Carsten Brzeski said: “Trump is demanding that trading partners show him the money in the form of investment pledges or face astronomically high tariffs. […] It’s unclear whether investment aspects of trade talks will move beyond headline figures and vague commitments. Unlike tariffs, which are straightforward to enforce, investment pledges and purchase commitments are harder to monitor, especially since entities like the EU lack the authority to guarantee them, leaving delivery to corporations. Japan and South Korea’s promises are mainly in the form of loans. This raises questions about how the U.S. might respond if countries fall short. And even with a deal – and I’m looking at you, Switzerland – the tariff issue persists. For Trump, tariffs are a versatile tool, used well beyond trade balance concerns. We can only guess at the long-term implications of such economic power play. Disrupted supply chains, strained diplomatic ties, economic selfishness, and less efficient global trade are just a few things to come to mind.” Our latest analysis: Israel’s economy clocked a surprise contraction in Q2. Japan’s exports worsened again in July. The post Get the latest global GDP growth forecasts via our daily tracker appeared first on FocusEconomics.
QUESTION: I asked GOK who thinks the stock market will crash. It gave a list of people all expecting a crash. It also noted that Buffet was bearish and J.P. Morgan was calling for a 20% drop. The reasons were “High valuations, particularly in tech and AI, are compared to historical bubbles (e.g., dot-com, railroads). Recession fears, driven by tariffs, high interest rates, and consumer debt, are seen as potential catalysts. Ongoing conflicts (e.g., Middle East, Russia-Ukraine) and trade policy shifts add volatility.” It even said: “Samuel Benner’s Historical Chart (Referenced on Medium): Prediction: A 150-year-old financial cycle chart by Samuel Benner, cited in a Medium article, has historically predicted major crashes, including the Great Depression, dot-com bust, and 2020 COVID crash. It suggests warning signs for a potential crash in 2025.” You seem to be standing alone. What do you think about the Benner chart? SY ANSWER: That’s good. The majority is always wrong. Just as Rogoff said, the forecasts at Davos are always wrong. Most of these people forecast markets based on personal opinion, and they tend to be very myopic. They do not look at the world because they believe they can forecast in isolation. The claim that Benner’s Cycle predicted the Great Depression is false. The chart that was published in the Wall Street Journal altered Samuel Benner’s cycle, which was based on agriculture. It predicted a high in 1927, not 1929, and the low in 1930, not 1932. Claims that Benner’s work calls for a crash in 2025 are flat-out wrong. His target years would be 2019 and 2035, based on his data, not the altered, fake news published by the WSJ in 1933. Benner was a farmer. Applying his cycle to the economy today is no longer effective, any more than the Kondratieff Wave. Both were based on the economy, with agriculture being the #1 sector. As the Industrial Revolution unfolded, those cycles remain relevant for commodities, but not the economy. Agriculture, when Benner developed his model, accounted for 53% of the economy. Today it is 3%. If they were alive today, they would have used the services industry. Capital flows are still pointing to the dollar, given the prospect of war and sovereign defaults outside the USA.
Chris Lehmann The president’s targeting the Federal Reserve governor over a technicality is blatantly politically motivated. The post Trump’s Attempt to Fire Lisa Cook From the Fed Is a Naked Power Play appeared first on The Nation.
The 10yr term premium has risen, as has the 5yr TIPS-Trsy breakeven, in the wake of Mr. Trump’s campaign to subjugate the Fed. Figure 1: Ten year term premium, in % (blue). Light orange shading denotes period between Vought letter to Powell and Trump’s visit to Fed. Source: NY Fed. Figure 2: Five year Treasury-TIPS breakeven, in % (blue). Light orange shading denotes period between Vought letter to Powell and Trump’s visit to Fed. Source: Treasury via FRED. If Trump continues to browbeat the Fed into lowering the fed Funds rate, then the path of future nominal rates may be lowered, but higher expected inflation will tend to increase the term premium. Which dominates? That’s ambiguous. Believers in the Fisherian relation know the answer.
The U.S. economy did post a headline-grabbing 3.3% gain in Q2, but that figure is misleading. It’s driven largely by the collapse in imports—not by true domestic growth. Remember the GDP formula: GDP = C + I + G + (X – M). A sharp drop in imports boosts that (X – M) term artificially, making GDP look better even while the underlying fundamentals stagnate. Consumer spending rose only modestly at 1.6% and private domestic final sales rose 1.9%. They relay a lower estimate and then state the true figure, acting as if the figure should be celebrated. Meanwhile, business spending remained weak. We’ve also noted that household debt surged by $185 billion in Q2, with rising mortgage, credit-card, auto-loan, and student-loan balances. Delinquency rates are up, and real incomes are under pressure. Consumers are treading in deep waters. Imports tanked by 29.8% after nations began to panic buy last quarter ahead of tariffs. Exports declined 1.3%. The import volatility has inflated figures and does not mark sustainable economic growth. Investment into the US has also improved as capital has nowhere else to go, but again, the expansion is not enough for the long-term. The economy contracted 0.5% in Q1, and the Commerce Department is reporting that the economy rose 3.3% in Q2, with growth averaging 2.1% or a bit above 1% per quarter. Stagflation is not simply high inflation with low growth. It is the direct result of government mismanagement. When politicians and central banks try to manipulate the economy, they destroy confidence. That is the fuel behind stagflation.
Leer en Español The mid-2010s doldrums: In the mid-2010s, uranium prices languished below USD 20 per pound. This was a small fraction of the over USD 100 per pound prices reached in the heady days before the global financial crisis of 2007–2008. In the post-crisis years, the uranium spot price was weighed on by the Fukushima disaster in Japan—which led to some developed countries going off nuclear power—rising uranium supply and a tapering of the irrational market exuberance that marked the 2007 price bubble. Impressive resurgence: Over the last decade, however, uranium has made a comeback, with prices increasing more than fourfold between 2017 and 2024. Multiple factors have been at play. Asian countries, in particular, added nuclear power capacity at a brisk rate during the period—China’s was up around two-thirds, for instance. This was coupled with producers reining in output in the face of low prices. In addition, the Russia-Ukraine war fueled many countries’ concerns over the security of fossil fuel energy supplies, sparking renewed interest in nuclear as an alternative and reliable energy source. Another key development has been the increasing financialization of the market. Most notably, the Sprott Physical Uranium Trust launched in 2021 and has since rapidly accumulated tens of millions of pounds of uranium, tightening spot market supply. Price outlook for the rest of this decade: The Consensus among our panelists is for uranium prices to remain well above the levels that prevailed in the 2010s for the rest of this decade, with prices forecast to hover between USD 65 and 80 per pound. The latest edition of the World Nuclear Association’s Nuclear Fuel Report penciled in a 28% increase in uranium demand from 2023 to 2030 vs an 18% increase in supply. Higher demand will be driven by several factors: Rising economic development levels in emerging markets, higher electricity demand caused by AI, greater interest in modular nuclear reactors, and governments’ ongoing desire to ensure energy security in a more uncertain world. That said, panelists don’t see a return to the highs of 2024, a period when the spot price likely got ahead of underlying market fundamentals due to investor exuberance. Insight from our panel of analysts Economists at Goldman Sachs said: “Supply/demand dynamics are supportive of higher uranium prices: We forecast a structural supply deficit of ~20mn lbs in 2025 to grow to ~130mn lbs by 2040, or representing 40%-45% undersupply. This view is supported by increasing demand for uranium as the global nuclear fleet expands to support growing power needs amid a lack of meaningful potential supply to come online.” Our latest analysis Argentina’s economy continued to boom in annual terms in June, but shrank month on month. New Zealand’s central bank cut rates again in August amid a dour economic panorama. The post What’s the outlook for uranium prices? appeared first on FocusEconomics.
Leer en Español The mid-2010s doldrums: In the mid-2010s, uranium prices languished below USD 20 per pound. This was a small fraction of the over USD 100 per pound prices reached in the heady days before the global financial crisis of 2007–2008. In the post-crisis years, the uranium spot price was weighed on by the Fukushima disaster in Japan—which led to some developed countries going off nuclear power—rising uranium supply and a tapering of the irrational market exuberance that marked the 2007 price bubble. Impressive resurgence: Over the last decade, however, uranium has made a comeback, with prices increasing more than fourfold between 2017 and 2024. Multiple factors have been at play. Asian countries, in particular, added nuclear power capacity at a brisk rate during the period—China’s was up around two-thirds, for instance. This was coupled with producers reining in output in the face of low prices. In addition, the Russia-Ukraine war fueled many countries’ concerns over the security of fossil fuel energy supplies, sparking renewed interest in nuclear as an alternative and reliable energy source. Another key development has been the increasing financialization of the market. Most notably, the Sprott Physical Uranium Trust launched in 2021 and has since rapidly accumulated tens of millions of pounds of uranium, tightening spot market supply. Price outlook for the rest of this decade: The Consensus among our panelists is for uranium prices to remain well above the levels that prevailed in the 2010s for the rest of this decade, with prices forecast to hover between USD 65 and 80 per pound. The latest edition of the World Nuclear Association’s Nuclear Fuel Report penciled in a 28% increase in uranium demand from 2023 to 2030 vs an 18% increase in supply. Higher demand will be driven by several factors: Rising economic development levels in emerging markets, higher electricity demand caused by AI, greater interest in modular nuclear reactors, and governments’ ongoing desire to ensure energy security in a more uncertain world. That said, panelists don’t see a return to the highs of 2024, a period when the spot price likely got ahead of underlying market fundamentals due to investor exuberance. Insight from our panel of analysts Economists at Goldman Sachs said: “Supply/demand dynamics are supportive of higher uranium prices: We forecast a structural supply deficit of ~20mn lbs in 2025 to grow to ~130mn lbs by 2040, or representing 40%-45% undersupply. This view is supported by increasing demand for uranium as the global nuclear fleet expands to support growing power needs amid a lack of meaningful potential supply to come online.” Our latest analysis Argentina’s economy continued to boom in annual terms in June, but shrank month on month. New Zealand’s central bank cut rates again in August amid a dour economic panorama. The post What’s the outlook for uranium prices? appeared first on FocusEconomics.
