3:55: In this latest issue of my weekly podcast, I discuss the future of the yield curve. Since a week ago, the yield curve has flattened by 16 bps. There's now only a 6 bp spread left between the 10Y and the 3M. Over the last 5 days, the 10Y is down 17 basis points--and once again the 3M isn't budging: It dropped only 1 bp.
6:20: Another FOMC meeting set to take place. It will be interesting how Powell frames his long-term goals at Wednesday's press conference. The Fed may not think its "no QE" QE is influencing the market, but a lot of investors do.
8:30: Let's compare the coronavirus with SARS of 2003. A positive spin would be to say that authorities are responding the disease more quickly this time. A negative spin would be to say that, if the disease is still four and a half months away from its peak infection date, then it is on a much more destructive path than SARS was. If that mood turns to panic, the PRC leadership may have trouble mustering enough stimulus to keep the economy firing on all cylinders.
17:05: In France, President Emmanuel Macron refuses to back down. But in the last couple of weeks, even as the severity of the strikes begins to let up, the mood of French public opinion has been turning against Macron. A majority now want him to give it up.
18:40: In Italy, Salvini and his right-wing alliance fell short. In the Emilia-Romagna regional election Salvini failed to overtake the Democrats. It was widely believed that a Salvini victory would trigger a new national election. The response of financial markets to Salvini's defeat was immediate. Stocks on Milan's Borsa Italiana surged, and Italian public debt yields dropped. Yet in national polls Salvini remains at least 10 percentage points more popular than the ruling Democrats.
21:55: Poland is gripped in political and legal uncertainty. The leaders of the ruling PIS party have been trying to implement their long-term plan to overhaul Poland's judicial system. What they really want to do is to get rid of judges who criticize their party or who try to block their party's legislation. The EU Commission and the EU's highest court have declared many of PIS' reforms to be invalid and contrary to EU norms. PIS leaders are rallying Poles against the EU with nationalist battle cries.
24:45: In Washington, DC, the Senate has been staging its formal impeachment trial. The ultimate verdict is pretty much a foregone conclusion. The only suspense, therefore, is over which political party will benefit from the whole show.
29:35: China’s birth rate has dropped to an all time low. Five years after lifting its one-child policy, China is mired in a demographic conundrum. Despite the government's growing efforts to encourage bigger families, the birth rate continues to tick downward.
32:25: Putin's new pro-natalism policy promises a cash bonus to every new mom. Putin has been grappling with a demographic challenge--even with a rising fertility rate, a shrinking number of young Russian adults is resulting in fewer births. While Putin's new policy measures are a logical extension of his past pro-natalism initiatives, the statistics he cited have discrepancies.
37:00: 72% of China’s 12- to 14-year-olds have myopia. Rates of myopia are increasing rapidly in every economically developing society. In the United States, the prevalence of myopia in young adults has roughly doubled since the 1970s. What’s causing this? Researchers are finding that the growing eye needs sun exposure.
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