{"id":32898,"date":"2018-03-28T11:02:00","date_gmt":"2018-03-28T16:02:00","guid":{"rendered":"http:\/\/olduvai.ca\/?p=32898"},"modified":"2018-03-28T12:20:24","modified_gmt":"2018-03-28T17:20:24","slug":"macquarie-this-is-the-end-of-the-liberal-order-but-at-least-no-wars-yet","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=32898","title":{"rendered":"Macquarie: “This Is The End Of The Liberal Order… But At Least No Wars Yet”"},"content":{"rendered":"
\n

Macquarie: “This Is The End Of The Liberal Order… But At Least No Wars Yet”<\/a><\/span><\/h3>\n<\/div>\n
\n
\n
\n
\n

One week after Council on Foreign Relations president Richard Haass wrote an op-ed in which he waved farewell to the world he helped create, saying “Goodbye, Liberal World Order<\/a>.”<\/strong> Then overnight, one of Wall Street’s most original, if underappreciated analysts, Macquarie’s Victor Shvets, gave his own unique take on this increasingly sensitive topic, injecting a dose of his unique pragmatism, in a note that one could say has a silver lining based on the title: “The end of liberal order: De-globalization drift; but no wars, yet<\/em>.” Unfortunately, in a world in which almost every analyst sounds increasingly as skeptical as this website has been for the past 9 years, that’s as far as the optimism goes, as the following note reveals.<\/p>\n

* * *<\/p>\n

The end of liberal order: De-globalization drift; but no wars, yet<\/strong><\/u><\/p>\n

Investors continue to search for order; there is none<\/strong><\/p>\n

Investors seem to be striving to find order and pattern in a world that has neither. <\/strong><\/em>It is only human to search for patterns as without some order, there are no investment strategies. Instead, it becomes a world dominated by noise<\/strong>. Whether it is Trump tariffs, CBs (incessant debate \u2013 \u2018too dovish or too hawkish?\u2019) or Facebook and the role of social media, investors embark on a fairly meaningless task of calculating likely damages while trying to rationalize these actions within confines of conventional economic theory (trade is good; lack of it is bad). As a result, there is a growing chorus of shrill voices about onset of trade wars and\/or need for deep regulatory changes. <\/strong>Similarly, any widening of spreads (however small) is almost immediately interpreted as the onset of major liquidity contraction. In a modern world of signals, noise & AIdriven re-pricing, reality is just \u2018fake news\u2019 <\/strong>(or basically facts you don\u2019t like).<\/p>\n

De-globalization is a fact of life; both trade & capital<\/strong><\/p>\n

Amongst all the noise, it is still useful to examine the latest trade news with some degree of realism. <\/strong><\/em>First, de-globalization has been a fact of life for more than a decade. There are already ~50,000 cases outstanding with WTO<\/strong>, with members introducing various anti-dumping duties & non-tariff measures. This is more than double the case load of \u201908, and it is bound to grow exponentially; the US is not even the greatest offender. The liberal trade order had died at least a decade ago. Second, global economy is no longer driven by conventional trade, with elasticity close to one (trade to incremental GDP) vs. ~2x in \u201880s-90s.<\/p>\n

<\/a><\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Macquarie: “This Is The End Of The Liberal Order… But At Least No Wars Yet” One week after Council on Foreign Relations president Richard Haass wrote an op-ed in which he waved farewell to the world he helped create, saying “Goodbye, Liberal World Order.” Then overnight, one of Wall Street’s most original, if underappreciated analysts, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,5],"tags":[953,370,482,9132,19517,19518,862,4318],"class_list":["post-32898","post","type-post","status-publish","format-standard","hentry","category-economics","category-geopolitics","tag-council-on-foreign-relations","tag-globalization","tag-liberalism","tag-macquarie","tag-richard-haass","tag-victor-sheets","tag-war","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/32898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=32898"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/32898\/revisions"}],"predecessor-version":[{"id":32900,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/32898\/revisions\/32900"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}