Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, June 28, 2023

AI Summary. The Congressional Budget Office projects the US government will need to sell an average of $2tn of Treasuries annually over the next decade, with Federal Reserve holdings of Treasuries rising to $7.5tn by 2033 from nearly $5tn. The author argues those spending projections are too low, implying holdings of at least $10tn.

Michael Howell Financial Times
Date Posted:

.@crossbordercap argues that quantitative easing will soon return as central banks in advanced economies will be needed to help fund deteriorating fiscal positions that will be driven by defense spending, demographics, and entitlements.

Will rising Treasury issuance force the Fed to expand its balance sheet?

Core argument: The US government will need to sell an average of $2tn of Treasuries annually over the next decade, and the Congressional Budget Office estimates Fed holdings of Treasuries must rise to $7.5tn by 2033 from nearly $5tn currently.

Quantitative easing is coming back. The US government will need to sell an average of $2T of Treasuries each year over the next decade. And according to latest Congressional Budget Office forecasts the Fed will be required to chip in. The CBO estimates that Fed holdings of US Treasuries will have to rise to $7.5T by 2033 from current levels of nearly $5T. No QT here, but worse, these CBO spending projections are likely too low — especially for defence outlays. More realistic numbers point to required Fed Treasury holdings of at least $10T. That translates pro rata into a doubling of its current $8.5T balance sheet size and will mean several years of double-digit growth in Fed liquidity.

Takeaways by Macro Roundup® AI

  1. The US government will need to sell an average of $2tn of Treasuries annually over the next decade, and the Congressional Budget Office estimates Fed holdings of Treasuries must rise to $7.5tn by 2033 from nearly $5tn currently.
  2. CBO spending projections are likely too low, especially for defence outlays, and more realistic numbers point to required Fed Treasury holdings of at least $10tn.
  3. Holdings of $10tn would translate pro rata into a doubling of the Fed's current $8.5tn balance sheet and mean several years of double-digit growth in Fed liquidity rather than quantitative tightening.

Related Articles:

  • Government Debt and Debt Servicing Costs Rising — 25% of all outstanding US government debt has been added since the start of 2020, and with higher debt levels and higher interest rates, debt servicing costs have risen from about $1bn per day to nearly $2bn per day.
  • American Gothic — US tax increases since 1950 of 2% of GDP or more occurred when overall tax receipts were a much smaller share of GDP than today. Restoring the ratio of entitlement to non-defense discretionary spending to its earlier level of 2.2x would require tax increases larger than those historical precedents.

AI Summary. Harmonized inflation measures use the same consumer basket across countries, allowing closer apples-to-apples international comparisons. On this basis, U.S. inflation rose and peaked earlier in the pandemic than in the rest of the Group of Seven, and the U.S. has the lowest 12-month harmonized inflation in the group for both overall and core measures.

CEA Staff Council of Economic Advisors
Date Posted:

.@ernietedeschi @WhiteHouseCea argues that on the basis of “harmonized inflation” that uses the same consumer basket in all countries, the US now has the lowest 12-month inflation in the G7 advanced economies, both overall and by core.

Does the U.S. have the lowest inflation in the G7?

Core argument: The U.S. has the lowest 12-month harmonized inflation in the G7, for both overall and core inflation, though inflation remains elevated across all countries in the analysis.

Put simply, “harmonizing” means using the same consumer basket in all countries. The result is close to a truly apples-to-apples inflation concept that allows for international comparisons. Harmonized inflation generally rose and peaked earlier in the pandemic than the rest of the G7, measured on a 12-month basis. Though inflation remains elevated across all countries in this analysis, the U.S. now has the lowest 12-month harmonized inflation in the G7, both for overall and core inflation. That said, inflation going forward remains considerably uncertain across all G7 nations, including the U.S.

Takeaways by Macro Roundup® AI

  1. The U.S. has the lowest 12-month harmonized inflation in the G7, for both overall and core inflation, though inflation remains elevated across all countries in the analysis.
  2. Harmonizing inflation measures by applying the same consumer basket across countries yields a near apples-to-apples concept that allows international comparisons of inflation rates.
  3. U.S. harmonized inflation generally rose and peaked earlier in the pandemic than in the rest of the G7 on a 12-month basis, and inflation going forward remains considerably uncertain across all G7 nations.

AI Summary. Inflation has negated many benefits of a tight US labor market, rising from 2% before the pandemic to a 9.1% peak before retreating to 4%, though underlying inflation persists around 4% to 5%. Polling identifies inflation as the main reason voters disapprove of the president's handling of the economy by two-to-one.

Greg Ip Wall Street Journal
Date Posted:

.@greg_ip argues that despite recent declines in inflation, private wage and salary growth has failed to keep up with rising consumer prices.

Does inflation explain voter disapproval despite a tight labor market?

Core argument: U.S. inflation rose from 2% just before the pandemic to a 9.1% peak last year as gasoline prices leapt after Russia's invasion of Ukraine, and has since retreated to 4% as gasoline prices dropped.

Many of the benefits of that tight labor market have been negated by inflation. It soared from 2% just before the pandemic to a peak of 9.1% last year as gasoline prices leapt in the wake of Russia’s invasion of Ukraine. It has since retreated to 4% as gasoline prices dropped, but underlying inflation persists around 4% to 5%. Inflation is the main reason voters disapprove of Biden’s handling of the economy by a two-to-one ratio, according to a May poll by the Associated Press and NORC Center for Public Affairs Research. If inflation doesn’t fade of its own accord, the Federal Reserve might have to raise interest rates further and push the economy into recession, which won’t help Biden’s approval ratings.

Takeaways by Macro Roundup® AI

  1. U.S. inflation rose from 2% just before the pandemic to a 9.1% peak last year as gasoline prices leapt after Russia's invasion of Ukraine, and has since retreated to 4% as gasoline prices dropped.
  2. Underlying inflation persists around 4% to 5%, and inflation has negated many of the benefits of the tight labor market.
  3. Inflation is the main reason voters disapprove of Biden's handling of the economy by a two-to-one ratio, according to a May poll by the Associated Press and NORC Center for Public Affairs Research.

Related Articles:

  • Jason Furman On Employment Cost Index — The Employment Cost Index shows private wages and compensation rising at annual rates of roughly 4.7%–5.1%, higher than any point in the previous cycle, supporting the argument that wage growth is not slowing and that the measured slowdown in average hourly earnings reflected shifts in workforce composition. Real wages and salaries remain 5% below their pre-pandemic trend.
  • Real Wage Growth at the Individual Level In 2022 — Both the mean and median worker saw wages fail to keep pace with prices in their consumption baskets, a decline in real wages affecting 54% of workers. Workers under 25 saw real wage growth of 4.3%, while older age groups saw declines that grew larger with age.

AI Summary. Cross-border lending and investment involving the U.S., China, and the euro area have contracted, with the gross value of such transactions falling from about $7.9tn to roughly $2.8tn in a single year. Relative to the three economies' combined output, international financial transaction volumes are smaller than at any point other than the trough of the financial crisis.

Matt Klein The Overshoot
Date Posted:

International financial transactions among the US, China and Euro Area are smaller relative to their combined output then at any point other than the trough of the financial crisis. @M_C_Klein

Are cross-border lending and investment among the largest economies shrinking?

Core argument: The gross value of cross-border financial transactions involving the U.S., China, and the euro area fell from about $7.9 trillion in 2021 to $2.8 trillion in 2022.

Americans, Chinese, and Europeans have curtailed their lending and investing abroad—while also selling commensurately fewer financial claims to foreigners. In 2021, the gross value of cross-border financial transactions involving the U.S., China, and the euro area was worth about $7.9 trillion. In 2022, that figure was just $2.8 trillion. U.S. data for the first three months of this year suggest that cross-border transactions volumes have continued to shrink. International financial transactions involving the world’s three largest economies are smaller relative to their combined output than at any point other than the trough of the financial crisis.

Takeaways by Macro Roundup® AI

  1. The gross value of cross-border financial transactions involving the U.S., China, and the euro area fell from about $7.9 trillion in 2021 to $2.8 trillion in 2022.
  2. Americans, Chinese, and Europeans have curtailed lending and investing abroad while selling commensurately fewer financial claims to foreigners.
  3. International financial transactions involving the world's three largest economies are smaller relative to their combined output than at any point other than the trough of the financial crisis, and U.S. data suggest volumes have continued to shrink.

AI Summary. Goldman Sachs forecasts that China's energy policies open up energy storage as part of a more than $7tn infrastructure investment opportunity through 2040, with China requiring about 520 gigawatts of storage by 2030, up to 410GW of it from batteries. The number of Chinese registered energy storage companies has more than doubled to nearly 109,000.

Edward White and Gloria Li Financial Times
Date Posted:

Goldman Sachs forecasts there will be $7T of energy infrastructure investment in China through 2040 with a growing share related to energy storage.

Is China's energy overhaul driving a battery storage investment boom?

Core argument: Goldman Sachs forecasts that energy storage, opened up by China's energy policies, will form part of a more than $7tn infrastructure investment opportunity through 2040.

Goldman Sachs forecasts that energy storage, opened up by China’s energy policies, will be part of a more than $7tn infrastructure investment opportunity through to 2040. Goldman forecasts that China requires about 520 gigawatts of energy storage by 2030, with as much as 410GW coming from batteries. That reflects a 70-fold increase from battery storage levels in 2021.  The number of Chinese enterprises registered as energy storage companies has more than doubled in the past three years to nearly 109,000, according to data from Chinese companies information provider Aiqicha.

Takeaways by Macro Roundup® AI

  1. Goldman Sachs forecasts that energy storage, opened up by China's energy policies, will form part of a more than $7tn infrastructure investment opportunity through 2040.
  2. Goldman Sachs forecasts China will require about 520GW of energy storage by 2030, with as much as 410GW from batteries — a 70-fold increase from 2021 battery storage levels.
  3. The number of Chinese enterprises registered as energy storage companies has more than doubled in three years to nearly 109,000, according to Chinese company information provider Aiqicha.

AI Summary. The computer and electronics segment is the dominant component of U.S. manufacturing facility construction, and its boom has not come at the expense of other segments, with chemical, transportation, and food and beverage construction also up, though by much less. Roughly comparable data show no similar surge in other advanced economies.

Eric Van Nostrand, Tara Sinclair and Samarth Gupta U.S. Department of the Treasury
Date Posted:

Biden’s Treasury Department notes that the US is experiencing a much larger surge in real manufacturing construction than other advanced economies.

What is driving the surge in US manufacturing facility construction?

Core argument: The computer/electronic segment is the dominant component of U.S. manufacturing construction, and its boom has not been offset by declines elsewhere, with other segments largely consistent with long-term levels.

Today, the computer/electronic segment is the dominant component of U.S. manufacturing construction. Importantly, the boom in this segment has not been offset by reduced spending on other manufacturing construction segments, which are largely consistent with long-term levels. In fact, construction for chemical, transportation, and food/beverage manufacturing is also up from 2022, albeit much less than the computer/electronic sector. The same surge in manufacturing construction is not apparent in other advanced economies. No harmonized data series provides an exact comparison to the United States, but comparable data indicators help unveil the relevant trends. Other advanced economies have not experienced similar increases, according to roughly analogous data sets measuring some concept of real construction for manufacturing purposes.

Takeaways by Macro Roundup® AI

  1. The computer/electronic segment is the dominant component of U.S. manufacturing construction, and its boom has not been offset by declines elsewhere, with other segments largely consistent with long-term levels.
  2. Construction for chemical, transportation, and food/beverage manufacturing is also up from 2022, though by much less than in the computer/electronic sector.
  3. Other advanced economies have not experienced similar increases, according to roughly analogous data sets measuring some concept of real construction for manufacturing purposes, as no harmonized series permits an exact comparison with the United States.

Related Articles:

  • Making Manufacturing Great Again — US manufacturing construction spending has more than doubled over the past year and risen as a share of gross domestic product, a surge attributed to two laws: the Inflation Reduction Act, whose core is green energy subsidies, and the CHIPS Act, which promotes domestic semiconductor production.

AI Summary. US artificial intelligence venture investment totaled $26.6bn in a year, versus about $4bn in China, according to data collated by consultancy Preqin. By deal count the gap is narrowing: Chinese AI venture deals equaled more than two-thirds of the US total of about 447, up from roughly 50% in the prior two years.

Jane Zhang and Sarah Zheng Bloomberg
Date Posted:

China’s government is mobilizing their tech sector in an effort to keep pace and eclipse the US in the artificial intelligence race. American investment in AI in 2023 was $26.6 billion in mid-June relative to China’s $4 billion.

Is China closing the gap with US AI venture investment?

Core argument: US AI investment totaled $26.6 billion in the year to mid-June versus China's $4 billion, according to previously unreported data collated by consultancy Preqin.

AI investments in the US dwarf that of China, totaling $26.6 billion in the year to mid-June versus China’s $4 billion, according to previously unreported data collated by consultancy Preqin. Yet that gap is already gradually narrowing, at least in terms of deal flow. The number of Chinese venture deals in AI comprised more than two-thirds of the US total of about 447 in the year to mid-June, versus about 50% over the previous two years. China-based AI venture deals also outpaced consumer tech in 2022 and early 2023, according to Preqin.

Takeaways by Macro Roundup® AI

  1. US AI investment totaled $26.6 billion in the year to mid-June versus China's $4 billion, according to previously unreported data collated by consultancy Preqin.
  2. Chinese venture deals in AI numbered more than two-thirds of the US total of about 447 in the year to mid-June, up from about 50% over the previous two years.
  3. China-based AI venture deals outpaced consumer tech deals in 2022 and early 2023, according to Preqin.

Related Articles:

  • The Race of the AI Labs Heats Up — Almost all recent artificial intelligence breakthroughs have come from large companies, largely because they hold the computing power. Amazon and Meta each produce two-thirds and four-fifths as much AI research as Stanford University respectively, while Alphabet and Microsoft produce considerably more, excluding their affiliated labs DeepMind and OpenAI.

AI Summary. Inflation-adjusted US house prices are 3.8% below their peak. Historically, periods of poor affordability were followed by strong 5-year real returns on home purchases, while the weakest 5-year real returns came in the runup to and during the housing bubble; unaffordability and low inventory now push prices in opposite directions.

Bill McBride Calculated Risk
Date Posted:

.@calculatedrisk notes affordability is low, which has been associated with low returns going forward. However, in this cycle many owners have low interest mortgages, restricting available inventory.

Does poor housing affordability predict strong future real returns?

Core argument: Inflation-adjusted U.S. house prices stand 3.8% below their peak.

Here is a graph showing affordability, and the 5-year real return (red) on the house purchase (annualized). The 5-year real return is the future return on the Case-Shiller index, adjusted for inflation. When affordability was poor in the early ‘80s, it was actually a good time to buy (and that was before refinancing!). Another good time to buy was in the mid-to-late ‘90s. And another good time was around 2011 or 2012 and also the next several years. The worst time to buy (using a 5 year real return) was in the runup to and during the housing bubble. Since the real return is based on 5 years, we don’t know the return after April 2018. Unaffordability and the low level of inventory are pushing prices in opposite directions!

Takeaways by Macro Roundup® AI

  1. Inflation-adjusted U.S. house prices stand 3.8% below their peak.
  2. Unaffordability and low inventory are pushing house prices in opposite directions, and because the real return is measured over five years, returns after April 2018 are unknown.

Thursday, June 29, 2023

AI Summary. The Congressional Budget Office projects the federal deficit falls from 5.8% of gross domestic product to 5.0% before rising every year to 10% of GDP over three decades, a level exceeded only during World War II and the pandemic. Federal debt held by the public is projected to reach 181% of GDP.

CBO Staff Congressional Budget Office
Date Posted:

.@USCBO projects a deficit of 5.8% of GDP in 2023 which will decline to 5% by 2027 and then accelerate to 10% of GDP by 2053 when federal debt will be 181% of GDP.

How high are federal deficits and debt projected to rise?

Core argument: CBO projects the federal deficit falls from 5.8% of GDP in 2023 to 5.0% by 2027, then grows every year to 10% of GDP in 2053, a level exceeded over the past century only during World War II and the coronavirus pandemic.

In CBO’s projections, the deficit equals 5.8% of gross domestic product (GDP) in 2023, declines to 5.0% by 2027, and then grows in every year, reaching 10% of GDP in 2053. Over the past century, that level has been exceeded only during World War II and the coronavirus pandemic. The increase in the total deficit results from faster growth in spending than in revenues. The primary deficit, which excludes interest costs, equals 3.3% of GDP in both 2023 and 2053, but the total deficit is boosted by rising interest costs. By the end of 2023, federal debt held by the public equals 98% of GDP. Debt then rises in relation to GDP: It surpasses its historical high in 2029, when it reaches 107% of GDP, and climbs to 181%% of GDP by 2053.

Takeaways by Macro Roundup® AI

  1. CBO projects the federal deficit falls from 5.8% of GDP in 2023 to 5.0% by 2027, then grows every year to 10% of GDP in 2053, a level exceeded over the past century only during World War II and the coronavirus pandemic.
  2. CBO projects federal debt held by the public rises from 98% of GDP at the end of 2023 to 107% in 2029, surpassing its historical high, and reaches 181% of GDP by 2053.
  3. The primary deficit, which excludes interest costs, equals 3.3% of GDP in both 2023 and 2053 in CBO's projections, with rising interest costs boosting the total deficit as spending grows faster than revenues.

Related Articles:

  • The Return of Quantitative Easing — The Congressional Budget Office projects the US government will need to sell an average of $2tn of Treasuries annually over the next decade, with Federal Reserve holdings of Treasuries rising to $7.5tn by 2033 from nearly $5tn. The author argues those spending projections are too low, implying holdings of at least $10tn.

AI Summary. Annual inflation running near 5%, well above the Federal Reserve's 2% target, is expected to keep interest rates and the cost of capital elevated. Rising bank borrowing costs correspond to the equivalent of a 200 basis-point rate hike for regional banks and 50 basis points for large banks, or a bit more than 100 basis points economy-wide.

Torsten Sløk Apollo
Date Posted:

Torsten Sløk writes that the failure of SVB and First Republic led to tightening financial conditions, and the full impact of those tighter conditions has not been felt. He forecasts a 60% chance of a hard landing. @apolloglobal

Will inflation above target keep the cost of capital elevated?

Core argument: Annual inflation running near 5%, still well above the Federal Reserve's 2% target, is expected to keep rates higher for longer and the cost of capital elevated through the remainder of 2023 and well into 2024.

While we may have turned the corner on inflation, it continues to prove much “stickier” than most market watchers expected. As of this writing, inflation was around 5% annually, still way above the Fed’s 2% target. In our view, that means higher rates for longer, and an elevated cost of capital through the remainder of 2023 and well into 2024. The increase in borrowing costs since SVB failed corresponds to a 200-basis-point Fed hike for regional banks and a 50-basis-point increase for large banks. Weighing these estimates together using the shares of loans and leases accounted for by small and large banks, respectively, gives an economy-wide Fed tightening equivalent of a bit more than 100 basis points for the entire banking sector.

Takeaways by Macro Roundup® AI

  1. Annual inflation running near 5%, still well above the Federal Reserve's 2% target, is expected to keep rates higher for longer and the cost of capital elevated through the remainder of 2023 and well into 2024.
  2. The rise in borrowing costs since Silicon Valley Bank's failure corresponds to an estimated 200-basis-point Fed hike for regional banks and a 50-basis-point increase for large banks.
  3. Weighing those estimates by the shares of loans and leases accounted for by small and large banks yields an economy-wide Fed tightening equivalent of a bit more than 100 basis points for the entire banking sector.

AI Summary. An investment framework holds that markets and economies are driven by three equilibriums — spending in line with output and capacity, incomes in line with debts, and normal risk premiums across assets — interacting with two policy levers, monetary and fiscal policy. When these conditions are absent, the resulting social, political, and business strains produce changes until equilibrium is restored.

Bob Prince, Aaron Goone, Shane Murphy, and Gurchit Chatha Bridgewater Associates
Date Posted:

Bridgewater argues the United States is in a bearish disequilibrium which is associated with a -2.4% return on equities in the subsequent 12 months.

Are most economies out of equilibrium, requiring policy action?

Core argument: The authors argue most global economies remain in disequilibrium on three conditions: spending in line with output and capacity, incomes in line with debts, and normal risk premiums across assets.

We believe that there are three major equilibriums and two major policy levers that interact to drive markets and economies: 1) Spending in line with output, which is in line with capacity. 2) Incomes in line with debts. 3) Normal risk premiums across assets If these conditions don’t exist, intolerable circumstances will ensue that will drive changes toward these equilibriums being reached. For example, if an economy’s usage of capacity (e.g., labor and capital) remains low for an extended period of time, that will lead to social and political problems as well as business losses, which will produce further changes until these equilibriums are reached. The two levers are monetary policy and fiscal policy.

Takeaways by Macro Roundup® AI

  1. The authors argue most global economies remain in disequilibrium on three conditions: spending in line with output and capacity, incomes in line with debts, and normal risk premiums across assets.
  2. Monetary policy and fiscal policy are the two levers that interact with the three equilibriums to drive markets and economies.
  3. The authors contend that prolonged low usage of capacity such as labor and capital leads to social and political problems as well as business losses, producing further changes until the equilibriums are reached.

AI Summary. The U.S. was missing an average of about 1.39m foreign workers relative to the pre-pandemic trend, a shortfall that has since recovered. Across industries and states, the authors find no statistically significant relationship between the number of missing foreign workers as a share of employment and changes in job vacancy rates.

Hannah Rubinton and Maggie Isaacson Federal Reserve Bank of St. Louis
Date Posted:

.@hannahrubinton @stlouisfed found only limited support for the hypothesis that the recent labor market tightness was driven by the shortfall in immigration.

Did missing foreign workers tighten the U.S. labor market?

Core argument: The U.S. was missing an average of about 1.39 million foreign workers in 2021 relative to the level expected from the pre-pandemic trend, and the number of foreign workers recovered in 2023.

The U.S. was missing an average of about 1.39 million foreign workers in 2021 relative to the expected level based on the pre-pandemic trend. The number of foreign workers has recovered in 2023. The percentage point change in vacancy rates between 2019 and 2021 versus the number of missing workers as a share of employment for industries and states. In neither case is there a statistically significant relationship between the change in vacancy rates and the number of missing workers. (Though the line of best fit is upward sloping for the industries case, it is not statistically significant, meaning that, on average, the industries with more missing workers did not see larger increases in the vacancy rate.)

Takeaways by Macro Roundup® AI

  1. The U.S. was missing an average of about 1.39 million foreign workers in 2021 relative to the level expected from the pre-pandemic trend, and the number of foreign workers recovered in 2023.
  2. Comparing the change in vacancy rates between 2019 and 2021 with missing workers as a share of employment shows no statistically significant relationship, for either industries or states.
  3. For industries, the line of best fit relating missing workers to vacancy-rate changes slopes upward but is not statistically significant, meaning industries with more missing workers did not on average see larger vacancy-rate increases.

Related Articles:

AI Summary. Institutions reporting to China's central government likely hold closer to $6tn in foreign assets than the $3.12tn officially reported as reserves, with the state banking system the main vehicle for holding these uncounted foreign currency assets. China remains a massive global creditor whose foreign exchange accumulation is felt worldwide.

Brad Setser The China Project
Date Posted:

.@Brad_Setser finds China has been parking foreign assets off the PBoC’s balance sheet. He estimates China has close to $6 trillion in foreign assets.

Does China hold far more foreign reserves than officially reported?

Core argument: Institutions reporting to China's central government probably hold closer to $6 trillion in foreign assets than the $3.12 trillion in reserves SAFE reported in December 2022.

All told, institutions that report to China’s central government probably have closer to $6 trillion in foreign assets than the $3.12 trillion SAFE reported in December 2022. The scale of these hidden reserves — foreign current currency assets that aren’t formally counted as “reserves” — also highlights an important fact that is often forgotten amid all the talk of China’s domestic debt problems. The main way China has hid its reserves has been its big state banking system. Globally China is still a massive creditor, and the weight of China’s massive accumulation of foreign exchange is still felt around the globe.

Takeaways by Macro Roundup® AI

  1. Institutions reporting to China's central government probably hold closer to $6 trillion in foreign assets than the $3.12 trillion in reserves SAFE reported in December 2022.
  2. China's large state banking system has been the main vehicle for holding foreign currency assets not formally counted as official reserves.
  3. Despite attention to China's domestic debt problems, China remains a massive global creditor whose accumulated foreign exchange is felt around the globe.

AI Summary. Astronomers have detected a low-frequency gravitational wave "hum" pervading the universe, showing that very large ripples in space-time are constantly reshaping space, with single waves taking years or decades to pass rather than vibrating hundreds of times a second. The finding opens a new observational window on phenomena such as orbiting black holes with the mass of billions of suns.

Jonathan O'Callaghan Quanta Magazine
Date Posted:

The shape of space-time is in constant flux due to gravitational waves. The most likely cause is supermassive black holes, but some scientists argue that these waves represent the first empirical observations of cosmic strings. @QuantaMagazine

Have astronomers detected a low-frequency gravitational wave hum across the universe?

Core argument: Astronomers announced the detection of an extra-low gravitational "hum" pervading the universe, showing that extra-large ripples in space-time are constantly squashing and changing the shape of space.

Astronomers have found an extra-low hum rumbling through the universe. The discovery, announced today, shows that extra-large ripples in space-time are constantly squashing and changing the shape of space. These gravitational waves are cousins to the echoes from black hole collisions first picked up by the Laser Interferometer Gravitational-Wave Observatory (LIGO) experiment in 2015. But whereas LIGO’s waves might vibrate a few hundred times a second, it might take years or decades for a single one of these gravitational waves to pass by at the speed of light. The finding has opened a wholly new window on the universe, one that promises to reveal previously hidden phenomena such as the cosmic whirling of black holes that have the mass of billions of suns, or possibly even more exotic (and still hypothetical) celestial specters.

Takeaways by Macro Roundup® AI

  1. Astronomers announced the detection of an extra-low gravitational "hum" pervading the universe, showing that extra-large ripples in space-time are constantly squashing and changing the shape of space.
  2. A single one of these gravitational waves might take years or decades to pass by at the speed of light, whereas the waves LIGO first detected from black hole collisions in 2015 might vibrate a few hundred times a second.
  3. The finding opens a new window on the universe that promises to reveal previously hidden phenomena such as the cosmic whirling of black holes with the mass of billions of suns, or more exotic hypothetical objects.