The Keynesian Chorus Sings As Krugmania Overtakes Japan

Takeaway: "Krugman calls for 'a big burst of government spending and maybe also cash donations.' Godspeed to free-market capitalists."

The Keynesian Chorus Sings As Krugmania Overtakes Japan - Japan cartoon 05.02.2016


The Keynesian chorus is getting awfully Loud these days.


Paul Krugman joined Ben Bernanke in calling for helicopter money yesterday. Here's the word via Bloomberg:


"Japan should raise its inflation target to 4 percent and embark on a large but temporary fiscal stimulus to boost prices in the economy, Nobel laureate Paul Krugman said.


Speaking at a conference on Thursday in Singapore, Krugman called for 'a big burst of government spending and maybe also cash donations,' though authorities don’t necessarily need to adopt a strategy that involves 'helicopter' money, he said.


'Japan needs to get that inflation rate convincingly high,' Krugman said, adding that worrying about the 'longer-term budget outlook needs to be put on hold.' The Bank of Japan’s current target is 2 percent and consumer prices excluding fresh food, a key benchmark for the BOJ, have fallen for three straight months."


As Hedgeye CEO Keith McCullough wrote earlier today, "Krugman calls for 'a big burst of government spending and maybe also cash donations.' Godspeed to free-market capitalists." In other words, Japan has been pulling out all the stops for some time now to no effect.


Investors are voting with their feet. Take a look at the chart of Japanese equities over the past year:



The central planning #BeliefSystem is breaking down.

CALL INVITE: Brexit Implications – a 360° Analysis

Hedgeye Potomac, in conjunction with the international law firm of Squire Patton Boggs, will be hosting a series of calls on Brexit and will first examine the legal and procedural implications.  


With Prime Minister Theresa May now formally installed at 10 Downing Street, we will discuss with Squire’s Brexit Task Force the events following the UK’s exit vote from the EU and what the outcome of the vote spells for the UK and the rest of the world.


The call will take place on July 22nd at 11:00AM EST with prepared remarks followed by Q&A.



  • The timing and procedure of the withdrawal, and future negotiations between the UK and the EU
  • The consequences for UK, EU and US companies arising from the end of the application of EU Freedoms, Mutual Recognition, Passports and other privileges
  • Consequences under the domestic laws of the UK and the remaining 27 Member States
  • What happens to International Agreements entered into by the EU
  • What you need to know when entering into new contracts after June 23, 2016 and what you should do with respect to existing contracts
  • Labor, Employment and Immigration
  • What alternatives are available to the UK, including WTO, EFTA, EEA, Swiss-Style, Free Trade Agreements



Squire Patton Boggs is a full service global law firm that provides insight at the point where law, business and government meet. Squire Patton Boggs consists of over 1,500 lawyers in 45 offices across 21 countries.

Squire Patton Boggs’ Brexit Task Force is a multi-disciplinary team of lawyers and policy advisers who are uniquely placed to support clients from across the globe on the effects Brexit will have on business.

The Public Policy teams, particularly in Brussels and Washington, D.C., consist of top tier lawyers with considerable public policy experience - which helps them provide seamless and coordinated discussions with the relevant authorities.



Toll Free:


UK: 0

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A Takeaway From Our Institutional Call on Agrium | $AGU

Takeaway: Shares of Agrium have remained comparatively resilient in 2016, a trend which we expect to reverse in 2H16.

A Takeaway From Our Institutional Call on Agrium | $AGU - agu present 


Hedgeye analysts Jay Van Sciver and Ben Ryan hosted an institutional call on Agrium (AGU) earlier this week. Here's the key takeaway:


Shares of Agrium have remained comparatively resilient in 2016, a trend which we expect to reverse in 2H16. As Agrium enters the back half of the year, wholesale margins are likely to see pressure amid lower fertilizer prices and higher input costs. While 1H16 retail margins benefited from early spring 2016 season planting and delayed fall 2015 nutrient application, such support should fade in 2H.


A Takeaway From Our Institutional Call on Agrium | $AGU - agu chart


KEY topics of discussion:

  • Broader Consideration of Retail Cyclicality: Product pricing, margins, and customer credit
  • Fertilizer Prices vs. Input Costs: Nitrogen set-up for 2H16 margin pressure
  • Capacity Growth & Exports: Chinese export trends, additional North American capacity
  • Retail Supplier Consolidation: Merger activity and trends in supplier concentration over time
  • Capital Allocation: Consideration of Agrium's redeployment of cycle peak profits
  • Valuation vs. Cycle: Valuations outside of Ag boom for retail, wholesale; where we expect Agrium shares to trade.


To access our institutional research email

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A Closer Look At European #GrowthSlowing

Takeaway: European equities continue to fall as the #GrowthSlowing data continues to roll in.

A Closer Look At European #GrowthSlowing - economic indicators cartoon 02.24.2016


Below is analysis from Hedgeye CEO Keith McCullough in a note sent to subscribers earlier today: 


"One way to keep US Equity Beta Up = Dollar Down (on the week); but how does that continue (from here)? With GBP/USD signaling immediate-term TRADE overbought at $1.34 and US economic growth (Q2 GDP) not tracking to recession (our Q2 predictive tracking algo currently has 1.5-1.8% y/y)?


The other side of the FX (and relative economic slowing) TREND looks like Euro Down (vs. Dollar Up) to me; EUR/USD top-end of the risk range = $1.12, and as European #GrowthSlowing continues I’m looking for a re-test of $1.05; French stocks down -0.8% have the CAC40 out of “crash” mode at -17% from last year’s high, but still bearish TREND @Hedgeye."


Take a look at the chart below of tumbling European equity markets:


Why such dismal performance?


Europe's #GrowthSlowing data continues to roll in...


Daily Market Data Dump: Friday

Takeaway: A closer look at global macro market developments.

Editor's Note: Below are complimentary charts highlighting global equity market developments, S&P 500 sector performance, volume on U.S. stock exchanges, rates and bond spreads, and key currency crosses. It's on the house. For more information on how Hedgeye can help you better understand the markets and economy (and stay ahead of consensus) check out our array of investing products




Daily Market Data Dump: Friday - equity markets 7 15


Daily Market Data Dump: Friday - sector performance 7 15


Daily Market Data Dump: Friday - volume 7 15


Daily Market Data Dump: Friday - rates and spreads 7 15


Daily Market Data Dump: Friday - currencies 7 15

[UNLOCKED] Keith's Daily Trading Ranges

We've made some new enhancements to Daily Trading Ranges - our proprietary buy and sell levels on major markets, commodities and currencies sent to subscribers weekday mornings by CEO Keith McCullough. Click here to view a brief video of McCullough explaining how to use it most effectively.


Subscribers now receive risk ranges for 20 tickers each day -  the last five of which are determined by what's flashing on Keith's screen and by what names subscribers are asking about. Click here to subscribe.


  • Bullish Trend
  • Bearish Trend
  • Neutral

10-Year U.S. Treasury Yield
1.56 1.31 1.53
S&P 500
2,101 2,177 2,163
Russell 2000
1,202 1,225 1,202
NASDAQ Composite
4,850 5,090 5,034
Nikkei 225 Index
14,919 16,590 16,385
German DAX Composite
9,269 10,105 10,068
Volatility Index
12.24 18.32 12.82
U.S. Dollar Index
95.28 96.92 96.10
1.09 1.12 1.10
Japanese Yen
100.28 106.29 105.44
Light Crude Oil Spot Price
43.09 47.04 45.50
Natural Gas Spot Price
2.61 2.95 2.73
Gold Spot Price
1,315 1,378 1,335
Copper Spot Price
2.08 2.28 2.24
Apple Inc.
94.52 98.99 98.79
720 761 741
Netflix Inc.
90.83 99.14 98.02
Alphabet Inc.
691 745 735
J.P. Morgan Chase & Co.
58.40 64.89 64.12
Infosys Tech.
17.05 18.46 18.44

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