PPI comes in at 1.1% YoY. Again 60% of this is weighted services. Not like CPI which is 40% services guesswork. What do I mean by that? Deposit rates increasing the BLS counts as “Financial Service inflation.” PPI showing massive easing within services.

For uncertain matters there are no calculable probabilities whatsoever. We simply do not know. -Keynes

@wabuffo @RadicalAdem The father of western wisdom

Odd trends underway usually as ratio of consumer spending to inventories increases we see an increase in imports. As this raises inventories to match demand. However we are now seeing the two move in opposite directions. This lack in imports for US will hurt many surplus nations.

With CPI out today lets disaggregate some narratives. "FED has a long way to go." PPI which is 60% services and one of the biggest factors deflating is freight and transportation rates are plunging. The PPI has collapsed almost in line with Feds target.

Canada wage growth most likely reach a peak in next 1-2 quarters. As inflation expectations have eased drastically, expectations tend to lead wage growth. That will help bring down wage inflation as itll narrow spread between productivity and nominal wages = lower unit labor cost

ISM services vs Marginal propensity to consume. Service sector is the largest sector of economy, as this is easing this has historically followed slows in consumption for each dollar of additional income. This will allow for readjustment of supply-side, which helps output gap.

ISM services vs Marginal propensity to consume. As service sector starts to slow, marginal propensity to consume for US consumer is also easing. This can actually be a net positive for inflation. As some easing of demand will help supply side readjust to more normal equilibrium.

Canada economy is roughly two-thirds service based, and consumption is a main driver As the marginal propensity to consume decreases, absent encore from the FEDs, service industry will start to feel pinch of less consumption. This passes through to employment, the gap will close.

Tickets for Morocco secured. Always love visiting Morocco one of my favorite countries I’ve visited. Tons of natural beauty, culture, and rich in history. -photo credits aren’t mine.

Net dollar liquidity worsening, with the most recent debt ceiling debate closing. I expect liquidity to worsen which has normally coincided with a widening of the cross-currency basis. Funding in dollar funding could start to tighten again.

Canada marginal propensity to save vs total debt payments. As Canadians are saving less of their additional disposable income, this is going to make it harder for them to service debt. This is not good for future debt service capacity.

@Rory_Johnston Sounds like someone who is uncertain of themselves, and sees OPEC importance dwindling and desperately trying to hold on. Saudi account balance and fx reserve situation is getting into dangerous territory and I’m sure they are worried.

بزن ازون حرفا من با تو کنار دریا صبح تو مو‌هات باد بزنه باز یه ذره رو شونه‌م خوابت ببره بذار دلت واسه خودم واشه گلم هروقت دلت گرفت واسه تو من گل بیارم هر شب بذار دلم تو بغلت جون بگیره پاشه بذار سند قلب من واسه تو امضا شه

Even with China exports slowing, steel production out of China has risen slightly as of late. So while I do believe China is slowing, it is not yet the end of the world.

In theory savings is equal to investment. Looking at the marginal propensity to save, in the US it has become deeply negative. This has correlated with changes in the Solow Growth Model. Thus lower savings, means less investment. This means structural inflation to stay.

US marginal propensity of consumption vs imports. As fiscal and monetary tailwind pass, and absent an encore additional income spent on consumption is dwindling. Thus decreases US imports, which will be a constraint on nations that run surpluses. Thus excess supply will build.

Saudi Arabia is experiencing capital outflows, looks like flows could go negative as investors pull money from the nation. This has also coincided with rising credit default swap, and compressed oil prices.

Canada credit issuance still positive on a YoY basis. One of the factors that changes in marginal propensity to consume is credit. When credit is loose it increases MPC, now MPC tends to lead. As credit has tightened it has flowed through in consumption trends.

@SpecialSitsNews Jay wait until you find out our new president of the central bank was, co-chief executive officer of First republic and obviously left recently is now managing monetary affairs. What could seriously go more wrong.

Turkeys new president of Central Bank was ex Co-CEO of First Republic… let’s just all have a moment of silence for Turkey.

Canada consumption has been pulled forward. As fiscal and monetary tailwind are in the rearview. Canadians are spending less of their income and in a service based economy this has historically tracked GDP. This could constrain economic growth.

@ericnuttall This is quantifiable exports. Now the question is how do we quantify the black market exports, for those from the region it’s no surprise. As Iran “GDP from oil” has declined over the years, however this is assuming all is done legally.

"Houston we are going to need additional cuts" Prisoners dilemma wins again, Saudis are loosing market share at a rapid pace. But everyone swore this time would be different @RadicalAdem