top of page
Jan 11, 20235 min read

#Zeteophobia! / Fed : no climate policymaker / French PF reforms / UK-EU improving / U.S. CPI tom



  • -The Fed isn't going to stop banks from lending to oil and gas and coal companies, or take other steps to promote a greener economy. Fed Chair Jerome Powell: “We are not, and will not be, a ‘climate policymaker.’” >>> Fed research: The surge in retirements since 2020 "accounts for essentially all of the shortfall" in labor force participation rates "More than half of the increase in the number of retirees appears to be a direct result of the pandemic."

  • The Fed will start cutting rates this summer as core PCE inflation will drop to 2.1%, says UBS' global chief economist >>> that would be quite something ! let's see, recall market pricing in about 40bps cut by year-end..on the other side of the view : JPMorgan CEO Jamie Dimon said the Fed’s rate hikes may need to go beyond what’s currently expected He said he thinks there's a 50% the Fed needs to raise rates to about 5% and a 50% chance they will have to go to 6% - Bloomberg

  • France : The entire pensions system cost the government just under 14%..of GDP in 2021, about 25% when you include healthcare in there.. inflation has changed everything, the bill is turning up in most countries one way or another... that's why we think Macron (or anyone else in charge) has no choice but to reform

  • Goldman Sachs no longer predicts a recession in the euro area - upgrades GDP forecast to +0.6% for 2023 vs -0.1% prior per research note

  • ECB's Schnabel: Rates must still rise significantly - Must increase at a steady pace >>> Euro-zone inflation remains near a historic high, but consumer expectations about the path for prices are falling back to their long-term norm and energy prices could well push inflation very decently lower over next few months - it will remain volatile!

  • Binance is bleeding assets, $12 Billion gone in less than 60 days

  • Biden : Homeowners will now save money on their taxes if they purchase eligible energy-efficient appliances and products for their homes. We're confronting the climate crisis and saving folks money in the process

  • The Irish minister for foreign affairs Michéal Martin has said there is growing trust between EU and UK negotiators but he cautioned there was a long way to go before agreement on the Northern Ireland Protocol might be reached-it has to happen sooner rather than later...Thread below

  • FTX spent about $7 million on food in the first 9 months of 2022 That's about $26,000 a day...ever so slightly excessive..

 
Markets :

  • everyone waiting for the CPI today, and earnings season starts tomorrow

  • SPX500 and major indices, everyone has the same tech levels in mind, much more interesting stock picking for good sound companies to invest in ! You can expect 2pct SPX move tomorrow on data IF the headline is +/- 0.25% outside market expectations..see below JPM comments

  • USD has had a big move down last 2months, beware Jan snap back, same as above and it will be the same for BONDS, which had a decent sell-off yesterday - worth noting (Powell was actually fairly strong, not dovish IMHO)

  • LME #copper hitting $9K a ton- highest level since June 2022 Copper - 2023 Data - 1988-2022 Historical - 2024 Forecast - Price - Quote - Chart (tradingeconomics.com) - chart (not LME prices but to put things in perspectives)

 



.... Talking to leaders these days in any walk of life, I have a sense that people are frozen. They see that inflation is back in a serious way for the first time in decades, forcing central banks to raise interest rates at the fastest pace since the early 1980s. They understand that this sudden change in the price of money — the most important driver of economic and financial behaviour — marks a fundamental break with the past. But they are not acting. After living with easy money for so long, they find it difficult even to contemplate a different world. There is a term for this state of mind: zeteophobia, or paralysis in the face of life-altering choices, couldn't agree more or said it any better, clearly! ....So many people keep doing what they were doing, hoping that somehow they won’t have to deal with change. On the assumption that central banks will once again come to the rescue, investors are still pouring money into ideas that worked in the past decade — tech funds, private equity and venture capital. Governments are still borrowing to spend and homeowners are refusing to sell as if easy money was bound to return soon

...Other countries targeted by market sell-offs in 2022 included Chile, Colombia, Egypt, Ghana, Pakistan, Hungary and even the UK. What they shared: high external and government deficits and unorthodox leaders who threatened to make those deficits worse.... spot on, really superb stuff from Ruchir - top man


this was a manifesto already in 2017...

Reason I mentioned yesterday that Macron (or anyone else..) doesn't have any choice but to reform.. (inflation-the bill has turned up for all..) - Critics have often cast France’s pension system as byzantine or convoluted, in part because it consists of 42 different state-supported pension schemes. The entire pensions system cost the government just under 14% !!!! of GDP in 2021, about 25% when you include healthcare in there..., Italy similar,




Euronav tumbles after Frontline abandons tanker merger deal (msn.com) merger failure, good for other name in the sector..



Prince Harry’s book marked down to half price on day of release 🤦‍♂️




very similar issue in many countries, the sellers will not want to lower prices for a while (hoping it comes back, rates go lower again..) and the buyers finding out funding much more expensive than 6months ago, and they need larger deposit to buy & funding higher etc - not too different than other times in early-mid 1990's


Have a super day

Team PVM





42 views0 comments

Comments

bottom of page