Macro ESG: markets, politics, and technology for a sustainable future with Greg Beier

Therefore, the one thing which could shore up support for Trump at the final moment would be if there was mild weather in October in the Red Republican Southern states and suddenly the virus infections went way down because everyone would be able to open up the windows and get outside – hence, breaking the chains of infection.

As the Southern states that are currently suffering from the virus are overwhelmingly Red Republican – Florida, Alabama, Texas, Georgia, Florida, and so on - the result of the election could come down to weather. www.macroESG.com #macroESG

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This is a negative feedback loop – the virus continues to soar, so the economy is dead and the government stimulus lifeline that was keeping consumer spending stable is about to take a hit. So, the economy will decline, and the virus will continue to grow as people are continuing to interact outside of their homes looking for work. It will just continue to get worse and worse until after the elections when the new President calls for a lockdown. www.macroESG.com #macroESG

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What is the meaning of the gold and silver rally?

We have stopped believing in ourselves. It’s a vote against our current situation. It’s not fear as much as it is apathy. www.macroESG.com #macroESG

What is the big picture?

We are just living out the end of the Reagan era of so-called self-reliance through trade and fiscal deficits.

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OIL US production is coming back online in a big way via the FT. I can’t see any reason for the Russians and the Saudis not to push the price down again. However, with all of the talk of Russian and Chinese interference in US elections, it’s possible that the two biggest players in OPEC+ might just want to sit on their heels and let the election slide by before beginning open market operations again. I’m revising my opinion on Oil – the market will likely drift until the election and then the price will start to sell off gradually. Any rallies are traps and to be avoided. www.macroESG.com #macroESG

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We Are At an Inflection Point

The markets today are on a knife edge. The whole lattice of politics, elections, technology conflicts, China, and virus can be seen clearly in the trading of the USD, the SP500, the Nasdaq, crude oil, and the 30-year yield.

Disaster could be averted, but the flow of bad news a-la the virus is so negative and not likely to diminish that it looks like the whole system is about to roll over. www.macroESG.com #macroESG

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UK equities are underperforming its EU peers while the Shanghai Composite leads the way on trailing 12 month basis.

The USD is getting setup for a big fall, engineered by none other than the President himself. www.macroESG.com #macroESG

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Silver to outperform gold as this rally likely driven by offshore EM private wealth.

US dollar weakness to continue as America’s frailties have been exposed by the George Floyd protests combined with by far the worst performance of any developed nation tackling the pandemic in terms of per capita infections and deaths while Europe is in the midst of building a cooperative democracy.

China’s equity market bull-run to continue on Pompeo’s failure to build an international coalition.

The key to US equities may be “buy the virus, sell the cure.”

LSE’s Stern made a brilliant point today about the political inevitability of politics coming around to support a sustainable future within the next four years. www.macroESG.com #macroESG

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The market response to these developments have been as would be expected. The Euro is trading well, China rebounded after the tech break, the USD is weakening, and mega cap tech rallies – absorbing all of the world’s liquidity into a mega bubble driven by near zero rates in the US – and negative yields for the first time on US treasuries.

I was completely wrong on Amazon’s share price breaking a while back, but I still see that we are in the pattern of having a large-scale political change like Hoover to FDR in 1932 or Carter to Reagan in 1980 with the November election which likely means that we are going to have a market correction before that which should knock everything over. www.macroESG.com #macroESG

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As the EU failed over the weekend to agree on a Green New Deal and Emerging Markets and the Southern and Western US states continue to deliver higher infections per capita (please see charts below), the question of funding Green New Deal economic recovery plans amidst higher debt levels from further lockdowns becomes pertinent – particularly as Melbourne just launched a mandatory mask requirement in public for a much lower infection count. US and EU public debt as a percentage of national income has lots of borrowing room and is not a problem – the real problem is just whether or not it is invested intelligently – and that is quite a big if. Recent US experiences with increasing the national debt have, on balance, been failures. www.macroESG.com #macroESG

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In 1980, the top decile in China captured 27.2% of national income and by 2018 it had grown 14.2% to 41.4%. In the US, the top decile had 34.2% in 1980 and it grew by 13.7% to 48%.

Inequality in China and the US grew in virtual lockstep over the same time period.

This is a fascinating point to consider. The average person in China probably doesn’t realize that their proportion of the pie shrank by 14% because the overall size of the slice of pie grew so dramatically during the boom years. #macroesg macroESG.com

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