In this latest issue of my weekly podcast, I look at the slowing pace of the global equity bull market: U.S. and Rest of World were barely up amid low volume and plunging volatility. Contrary to expectations, the yield curve keeps flattening. Thus far, the falling long bond has not influenced fed fund futures, though maybe it ought to be on Chairman Powell's mind: After all, the creeping up the of 3M and the sinking of the 10Y--along with a dollar that's stuck pretty high and won't budge--might be telling the Fed that its rate remains too tight.

In a speech last week, Fed Chairman Powell took pride in the economy's ongoing expansion and suggested that employment growth could continue indefinitely. I explain all the reasons why Powell's hopes are ungrounded. In fact, after adjusting for the age structure of the population, employment rates are currently higher than they were in 2007 or 1999. Doesn't the Fed have a demographer on staff? My prediction is that employment growth will continue to slow in the coming months--and slow a lot faster than Powell is anticipating.

Economic news in the U.S., though light, was mostly favorable. In particular, housing is currently the hottest sector going, with housing permits hitting cycle highs and housing starts not far behind.

Abroad, the economic news remains less happy. Economists believe China is locked into GDP deceleration for at least the next two years. Hong Kong "complicates" the Phase One trade deal. India, where the Sensex is soaring, awaits next week's GDP numbers with trepidation. Germany barely missed a recession in Q3 (though the number could still be revised). And economic growth in the Eurozone as a whole--both manufacturing and services--remains barely positive according to November's PMI. Manufacturing is now expanding in only four Eurozone economies: France, the Netherlands, Ireland, and Greece.

In politics, Italy's Matteo Salvini is thriving in opposition--and hopes to chalk up two more regional election victories in January. Meanwhile, Spain's socialist parties form an alliance and hope they can avoid yet another election. Both Italy and Spain are great case studies in how the centrists are being marginalized--in favor of more radical parties with easy-to-understand platforms stressing popular mobilization either on the left or on the right.

In Britain, the polls are looking up for Boris Johnson, who says he wants to “make the country carbon neutral by 2050 and Corbyn neutral by Christmas.” His odds of winning in futures markets are rising.

In American politics, the 2020 Democratic candidates held another debate, which ended up boosting public support for Joe Biden and Bernie Sanders and weakening support for Elizabeth Warren. Meanwhile, Michael Bloomberg made his official entrance into the race. Biden has to be concerned that a guy worth over $50 billion will be gunning for his moderate supporters. Sanders and Warren, on the other hand, have to be delighted that they now have an honest-go-god plutocrat to run against--not just in the other party, but in their own.

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