A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
It's important to remember that economists and strategists got it wrong in 2017 while the forecasts for the coming year are being published. TC Global Macro has us covered with a review,
"In 2017, for the first time in years, forecasters underestimated global real GDP growth. Average real GDP growth for the twelve countries we monitor is now expected to be 3.6% compared with a consensus forecast of 3.3% .. Inflation forecasts for 2017 were, once again, too high … for the first time in many years, economists' forecasts of central bank policy rates were too low."
"Biggest Global Macro Misses of 2017" – Ted Carmichael Global Macro
"Fed's Dots Have Lost the Plot as Economists Puzzle Over Outlook" – Bloomberg
"Central banks, trade and bubbles threaten the 2018 status quo" – Reuters
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Can bitcoin be valued like a currency? Morgan Stanley says no,
"Can Bitcoin be valued like a currency? No. There is no interest rate associated with Bitcoin. Like digital gold? Maybe. Does not have any intrinsic use like gold has in electronics or jewelry. But investors appear to be ascribing some value to it… If nobody accepts the technology for payment then the value would be 0."
"@SBarlow_ROB MS: "Can Bitcoin be valued like a currency? No. " (slide presentation excerpt) Twitter
"South Korean bitcoin exchange to file for bankruptcy after hacking" – Report on Business
"Why you can't cash out pt 1: Why Bitcoin's "price" is largely fictional" – David Gerard
"Canada firm plans $200 million coin/share offering for oil and gas" – Reuters
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I didn't think U.S. congress was going to pass that hot mess of a tax bill, but it looks like I was wrong. Comments from left-leaning Paul Krugman and Vox are below, but even rightist economists are wondering why stimulus is happening despite full employment and why corporations are getting the bulk of the tax breaks when they've already been main beneficiaries of Fed monetary policy,
"@nytopinion The Republican tax plan is still going to explode the national debt, so why is Senator Bob Corker now supporting it. nyti.ms/2kgs1UX by @paulkrugman wonders, too." – Twitter
"Historians on the tax fight: "This was manufactured urgency"" – Vox
"@SBarlow_ROB MS: "our original call for a market top the day the tax bill is signed by President Trump still holds" – (research excerpt) Twitter
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U.S. corporate bonds are the asset class to watch in 2018, in my opinion. They are the most exposed to rising interest rates, and are trading at extremely expensive levels relative to government bonds. Cheap money has been a big driver of profit growth on both sides of the border and to a significant degree (for just one example), the U.S. shale boom is the result of the low costs of borrowing to expand production,
"Junk ETF Posts Biggest Weekly Outflow in Seven Months: Chart" – Bloomberg
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Tweet of the day: "@gadfly Peak oil-supply fears have faded and peak demand has entered the conversation bloom.bg/2kixqep " – Twitter
Diversion: "A Genetic Map Of The World" – Gene Expression
Scott Barlow