JRG

The Euro zone trade deficit for August was published today. It's a monster. We've never before had sustained deficits of this size. When you're tempted to think the Euro has fallen too much, keep this picture in mind. The shock hitting Europe is massive. Euro will keep falling...

Suggested opening statement for every Italian populist in their campaign speeches: "Big thanks to the ECB for buying our debt for so many years & giving us low interest rates. We are grateful to northern Europe for its patience with us. Thank God we're not a monetary sovereign!"

The ECB is at a turning point 1. ECB QE has always been about everyone 2. The ECB bought sovereign bonds everywhere 3. But that is no longer true now: a turning point 4. Germany and Netherlands are getting QT 5. Italy and Spain continue to get QE 6. This isn't monetary policy

The Euro will fall far below parity. Russia's invasion of Ukraine is a hammer blow to the economy and German data are now collapsing, even as Putin keeps cutting gas flows via Nordstream. The Euro zone is going into deep recession and global markets are not yet pricing this...

Global recession is coming. It's becoming increasingly clear that important Euro zone economies like Germany (blue) and Italy (orange) are heading for recession. What is a surprise is that US data are falling also (pink). We're in a synchronized slowdown, heading for recession...