Brad Setser

Follow the Money

Cross border flows, with a bit of macroeconomics

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Gone fishing; back in two weeks

by Brad Setser
July 5, 2009

I’ll be away for most of the next two weeks — and do not intend to post from the road. But I have lined up two excellent guest bloggers: Rachel Ziemba of RGEMonitor and Mark Dow of Pharo Management, a hedge fund.

Rachel Ziemba co-wrote several papers on the Gulf’s sovereign funds with me, and has guest-blogged here in the past; and

Mark Dow is a former Treasury and IMF economist who migrated over time to the world of money management. I got to know Mark when he was managing an emerging market bond portfolio, but at Pharo his investments range widely across countries and assets classes — and he has promised to try to help elucidate the sometimes evasive link between markets and economics.



  • Posted by DJC

    Railway Transportation of Cargo across the United States is at DEPRESSION levels. (Year on Year Statistics).

    Only Bernanke keeps repeating the tired mantra of “green shoots”. The green shoots are yellow weeds!

    Auto Shipments Down 51%
    Metals Shipment Down 52%
    Intermodal Shipment Down 21%
    Lumber Shipments Down 35%
    Chemical shipments Down 21%

  • Posted by DJC

    Commercial Real Estate Implosion Is Imminent

    Rising vacancies. Falling rents. Negative absorption. The trend continues …

    The Washington, D.C., area’s commercial real estate market saw a net absorption of negative 726,100 square feet in the second quarter, the third straight quarter of negative absorption … the Washington region’s office vacancy rate has now reached 12.3 percent.

    The vacancy rate for top quality Midtown Manhattan office buildings reached its highest level in 15 years and asking rents fell nearly 11 percent in the second quarter, a Jones Lang LaSalle (JLL.N) report said.

    Many are calling it an industry depression, rather than recession.

  • Posted by FG

    DJC: Railway Transportation of Cargo across the United States is at DEPRESSION levels.

    Good, then the US imports will be less and the need for China to revalue its currency will be less. Depression is your preferred solution apparently.

  • Posted by Claus Vistesen

    Have a nice one Brad … Where have you gone fishing?

    Looking forward to Mark and Rachel.

    best wishes


  • Posted by DJC

    US foreign policy and economic policy both are subject to catastrophic failure:

    If the US economy fails to recover and China has no choice but to develop its internal market, than it will have to finance the internal market in local currency and do everything possible to give it regional and perhaps global status. If other countries in the region re-orient their exports away from the US and to the Chinese (and related) internal market, they will tend to link their currencies to the yuan. This might lead to a regional currency arrangement which well might be commodity based, as I commented a month ago.

    When I speculated on a regional currency, the Asian central banks had passed a milestone in regional cooperation, in the form of a creation of a $90 billion swap line for mutual currency support.

    Yuan settlement of international trade is another milestone.

    A few more milestones, and we will be past the point of no return.

  • Posted by jonathan

    You realize that on the 13th China will suddenly switch their entire portfolio allocation? Just to play with you.

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