China’s slowdownLet’s start with China today because yesterday the Chinese released their worst growth figures in 28 years. The 6.4% growth number was expected. Even so, the problems are large. Here’s how Reuters described it yesterday:China’s economy cooled in the fourth quarter under pressure from faltering domestic demand and bruising U.S. tariffs, dragging 2018 growth to the lowest level in nearly three decades and pressuring Beijing to roll out more stimulus to avert a sharper slowdown.
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A couple of things today.The default is no-deal, the base case is extension of article 50I waited until the bust settled on the no-confidence vote before I decided to write again about Brexit. It was clear that the fear of Corbyn as PM would cause Conservative MPs to hold together. And the DUP has long said they would back May in a no-confidence vote. But, notice that May would have lost the no-confidence vote without their support. So, it is vital now that she return the favor by working on a…

It’s coming down to the wire for British Prime Minister Theresa May now. Starting at about 1900 GMT, parliament is to vote on the Leave Agreement she secured from Brussels. Theresa May has been making last ditch attempts to win over MPs in her own party, with Brussels producing a 1600-word letter promising the Irish backstop would be temporary and "not a threat or a trap."
Nigel Dodds, leader of the DUP upon whose support the May minority government depends said about the assurances from Donald…

Happy Monday!
Let’s take a break from all of the angst about Brexit, about the US shutdown, and slowing global growth and look at some overarching macro policy debates that are relevant to this economic cycle. I’ve put forward my own views on those three topics. And specifically I see a delayed Brexit as a base case, the shutdown sapping Q1 growth, eventually leading to a potential emergency declaration and growth leading to pressure on equities due to a worsening outlook amid already hard to b…

Two issues I mentioned yesterday need some clarification.Trump will declare a state of emergency for the WallThe first is the shutdown. It’s this quote that needs clarification:The longer the shutdown goes on, the more damage it will do. I see Trump caving eventually. If he doesn’t, he will take huge knocks for his economic stewardship. And while the Congressional Democrats will also get some of the blame, it is Trump who has most to lose here, since the economy is his best issue.Trump doesn…

Today’s daily post is going to a true daily, covering a wide range of market and political economy news.Forcing government to rule out no dealAnd I want to start with Brexit because I think this is one of the most pressing issues in the political economy in the last decade.
In terms of the House of Commons, what I see happening is a coalition of forces joining, from the opposition parties led by Labour and joined by rebel Conservative MPs. Their collective aim is two-fold: to make the governm…

On today’s market actionToday saw the S&P 500 rise for the fourth straight day, the longest up-streak since September. And that puts us up 10% since Christmas Eve. Crude is rallying too , with WTI gaining almost 5% on the day to $52.18. What’s more, yesterday, investors rotated $745 million out of from Vanguard’s $27.2 billion short-term bond ETF. That’s the fund’s biggest one-day withdrawal ever – and it tell you the bulls are back.
I told you there were no signs of recession anywhere on …

The Brexit news is coming hot and heavy now. The latest out of the UK is that House of Commons Speaker John Bercow has allowed an attempt to force Prime Minister Theresa May’s hand on the Brexit deal.The Commons Speaker will allow MPs to vote this afternoon on an amendment saying that Mrs May must return to the Commons for another vote within three days if her Brexit deal is voted down on Tuesday. The amendment was tabled by Dominic Grieve, the former Conservative attorney-general who has repea…

After I wrote today’s post on Brexit, the following news came out – and I think it’s significant:Theresa May faces a concerted campaign of parliamentary warfare from a powerful cross-party alliance of MPs determined to use every lever at their disposal to prevent Britain leaving the EU without a deal in March.
Former staunch loyalist Sir Oliver Letwin signalled that he and other senior Conservatives would defy party whips, repeatedly if necessary, to avoid a no-deal Brexit, as the government s…

The trading day is over in the US and the numbers look good. Equity markets have recovered smartly from last weeks nosedive, with all major US indices up about 1%. Notable for me is the fact that WTI is trading close to $50 a barrel and the euro has trade up to over $1.14 as the Dollar Index has declined.
The composite picture is of a market that seems more or less convinced that the Fed will now stand down. The result: Oil, measured in dollars is more expensive, as are foreign currencies. And risk assets are rallying as a result.
In Treasuries, yields have risen. But the fundamental inversion remains in place. 1-year Treasuries are still trading for more than 5-year Treasuries. And the one-year is also yielding more than the two-year, which in turn is yielding more than the three-year.

I’ve been thinking about how to write this piece on the outlook for the political economy in the UK for a number of days. I had it teed up to finish yesterday. But I have left it until today. Apologies
I still have the bias that economics drives politics and not the other way around. But, increasingly, both in the UK and the US, we are seeing extreme political situations that will have an impact both over the longer-term and the shorter-term. And the situation with Brexit is a textbook case of …

When I ended my newsletter a few years ago, I ended up using the pro site for all new blog posts. And so when I started up the newsletter again this year, all the content got smashed onto the pro site – both subscription content and blog posts alike. That’s ending today because Credit Writedowns is back.
The creditwritedowns.com site will be where you can go for the free stuff and not have to worry about a paywall.  The paid content will be available as before on pro.creditwritedowns.com for supporters from Patreon. But soon, we will be taking subscribers on Credit Writedowns Pro. So, if the Patreon price point is too rich for you right now, hold on. I have a new offering coming.
It’s now been over 10 years and 10,000 posts on Credit Writedowns! Thanks for reading.
Best
Ed

[unable to retrieve full-text content]I am now stuffed with Turkey after days sitting around eating for the Thanksgiving holiday here in the US. Today is Black Friday, the biggest day of the year for retail sales. And so it makes sense to write this newsletter post today.  I have had this post teed up since Monday. But I just […]
The post The credit cycle is now turning down appeared first on Credit Writedowns Pro.

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

[unable to retrieve full-text content]The bear steepening from late August was a head fake. We went from about 18 basis points between the 2- and the 10-year on August 27th to 34 on October 10th. That’s when the equities market threw a tizzy as the ten-year reached the 3.25% threshold. And just as when, we had a similar dynamic […]
The post Countdown to inversion: US Treasury curve flattening has resumed appeared first on Credit Writedowns Pro.

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

[unable to retrieve full-text content]The bear steepening from late August was a head fake. We went from about 18 basis points between the 2- and the 10-year on August 27th to 34 on October 10th. That’s when the equities market threw a tizzy as the ten-year reached the 3.25% threshold. And just as when, we had a similar dynamic […]
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[unable to retrieve full-text content]The impression you get from a recent piece in Politico is that, yes, the Trump economy is in for tough sledding ahead: President Donald Trump, already in a grumpy post-midterm mood, faces a growing list of economic problems that could irritate him even more next year. Chief among them is a withdrawal from the economy’s […]
The post Is Trump’s goose cooked on the economy? appeared first on Credit Writedowns Pro.

[unable to retrieve full-text content]The impression you get from a recent piece in Politico is that, yes, the Trump economy is in for tough sledding ahead: President Donald Trump, already in a grumpy post-midterm mood, faces a growing list of economic problems that could irritate him even more next year. Chief among them is a withdrawal from the economy’s […]
This website is now reader-supported via Patreon. Full-text emails are available on that platform, including the new daily and weekly newsletter posts. Become a Patron!

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

[unable to retrieve full-text content]We’re getting to the point now where something very bad is going to happen. Someone is losing his shirt in the oil markets right now. And the question is whether that somebody impacts the US oil sector and oil capital expenditures. As I write this, WTI is quoted at $56.23 and Brent at $65.94. When […]
The post More on the meltdown in oil (and a cut in oil capex) appeared first on Credit Writedowns Pro.

[unable to retrieve full-text content]We’re getting to the point now where something very bad is going to happen. Someone is losing his shirt in the oil markets right now. And the question is whether that somebody impacts the US oil sector and oil capital expenditures. As I write this, WTI is quoted at $56.23 and Brent at $65.94. When […]
This website is now reader-supported via Patreon. Full-text emails are available on that platform, including the new daily and weekly newsletter posts. Become a Patron!

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

[unable to retrieve full-text content]In recent months, I have mostly written about short-to-medium term outlooks. Part of that is because making medium-to-long-term predictions is hard. But I just saw three tweets on the political economy of 2018, each making a case for how to view the likely political backdrop for 2020’s presidential election in the US. So, I want […]
The post Predicting the political economy for the 2020 US presidential election appeared first on Credit Writedowns Pro.

[unable to retrieve full-text content]In recent months, I have mostly written about short-to-medium term outlooks. Part of that is because making medium-to-long-term predictions is hard. But I just saw three tweets on the political economy of 2018, each making a case for how to view the likely political backdrop for 2020’s presidential election in the US. So, I want […]
This website is now reader-supported via Patreon. Full-text emails are available on that platform, including the new daily and weekly newsletter posts. Become a Patron!

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

[unable to retrieve full-text content]The big picture: deflation is back There was a global growth slowdown that I flagged late in 2014. And it came to the fore in 2015, derailing the US economy and pushing the Fed’s rate hike timetable back. Here we are with another one. I flagged it earlier this year in March and April and […]
The post Confirming a second global growth slowdown as Trump tries to consolidate power appeared first on Credit Writedowns Pro.

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.