Russian exports of diesel remain restricted due to Ukrainian attacks. China has yet to resume petroleum-product exports to Asia at normal levels due to concerns about possible shortages at home. Accordingly, major diesel buyers including Brazil/Europe/India/Turkey are increasingly relying on…
July US construction spending declined 3.8% Y-o-Y and is at $2.2 trillion seasonally adjusted. Public construction was up 1.7% Y-o-Y, largely due to highway/street construction, which rose 4.5% Y-o-Y. Private residential construction fell 7.3% Y-o-Y and is lousy. Private non-residential…
De-dollarization talk has picked up of late due to continued concerns over rising US public debt and whether its growth is sustainable. Recently, two new concerns have emerged. The first: rising investor concerns about the strength of US political institutions…
Troublingly, two powerful US economic/financial officials are having a policy brawl in broad daylight. New Fed Chair Warsh is intentionally reducing public comments/communication to let markets determine interest rates. Conversely, Secretary Bessent is arguing that rising long-bond yields don’t reflect…
The Friday File: The federal government deficit/GDP ratio is 6%. Based on a $32T economy, that’s $2T. Federal government spending is $8T. If we could get the deficit/GDP down to the growth rate in nominal GDP, historically 4%, the debt/GDP…
Single-family housing starts keep falling, and July’s 808,000 annualized are at their second-lowest level since 4/2020! July new-home sales of 607,000 annualized are down 6.3% Y-o-Y and haven’t been consistently this low since 2017. Moreover, median prices are at a…
When WeWork attempted to go public, it cited a total addressable market (TAM) of $3T. Uber followed with $6T and just recently SpaceX called its TAM a laughable $28.5T. But now comes Anthropic, reportedly preparing to claim a $30T+ TAM.…
There’s currently $31.5T of Treasuries, of which $5.75T have remaining maturity of 10+ years. The Fed already owns $1.6T, leaving $4.1T with a maturity of 10+ years that can be bought. In a market that big, buying $2B more does…
Three structural forces are pushing up long rates: the budget deficit outlook, skyrocketing AI-related corporate debt issuance, and the changing nature of the Treasury buyer. In 2009, 40% of foreign Treasuries holdings were in central banks, today it’s roughly 12%.…
The Friday File: The deepest hole ever drilled is the Kola Superdeep Borehole, drilled between 1970-1989. It reaches 12.3km, where the temperature is 356F. It’s located on the Kola Peninsula in Northwestern Russia, 155 miles north of the Arctic Circle.…