MI2's Global Macro Summit

September 26-29| Vail, CO


Thoughts From The Divide


June 1, 2023
This week we highlight some amusing and bemusing dynamics observed in various sectors of the economy. Commercial real estate increasingly justifies the dumpster fire metaphor as it begins to dawn on both banks and market participants that there is more pain to come. Residential real estate, while remaining relatively robust, is showing some cracks in […]
May 25, 2023
We at MI2 often find ourselves quoting Mark Twain (see here, here and here). In our collective experience, his “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so” is truly evergreen and may be particularly apt at this moment in time. “Declining deposits […]
May 19, 2023
“The cash flow… was insufficient to continue servicing its indebtedness”  For the last several weeks, we’ve been cheekily referring to real estate as a dumpster fire in discussing the ongoing problems in the sector; see here and here. For those who may take issue with this terminology, Yellen did recently offer an economic definition of […]
May 11, 2023
“If the economy sinks into a recession as many expect, owners will be whipsawed again” The Fed’s SLOOS lending report, now with the post-SVB reaction baked in, has attained a new significance with recent events. While tightening credit standards was no surprise, the weakening in credit demand was somewhat ominous. This relatively gloomy credit outlook […]
May 4, 2023
“We have credit conditions tightening, not just in the normal way but perhaps a little bit more” As is normal for an FOMC week, headlines were swirling hither and thither as markets tried to anticipate the actions and tone of Jerome Powell and friends. A dovish hike? A hawkish pause? In the end, the Fed […]
April 27, 2023
“Companies defend their margins and workers push for higher wages, and prices keep rising” While policymakers try their best to stay on message and control the framing, they can accidentally spill the beans every so often. This week we have a couple of interesting cases of inadvertent frankness. The first was perhaps more embarrassing than […]
April 20, 2023
“We are witnessing a fragmentation of the global economy”  Christine Lagarde gave a sobering speech on “Central banks in a fragmenting world” this week, and there were several takeaways. First, she noted that splintering of trade partnerships and supply chains not only can lead to “the risk of repeated supply shocks” but also comes with […]
April 13, 2023
“The staff’s projection… included a mild recession starting later this year” This week was indeed heavy on inflation data, with both CPI and PPI releases. The former dropped and was below expectations, but it comes with the caveat that some of the alternative metrics didn’t come back quite as nicely. The latter “unexpectedly fell”, but […]
April 6, 2023
“The pace of declines seems to be gradually attenuating” If next week can be characterized as an inflation data deluge, with PPI and CPI, this week we have a flood of employment data. Ahead of tomorrow’s NFP and Unemployment, we have several releases indicative of a souring labor market. The “divergent story” in employment, which […]