Karthik Sankaran

American agriculture also benefits enormously from free trade and is hit hard by tariffs. Purely on the basis of vulgar economism (NTTAWWT) there should be a soybeans, software, services, aerospace free-trade coaliton that would very well in the Senate/EC but it does not exist.

This is a more joke than market commentary but still.

RIP Jane Goodall, a pioneering theorist of Primacy.

The entire US economy is going to become more data dependent than the Fed will be!

And now that they got rid of the de Minimis exemption, you can’t even console yourself saying “de Cecco’s in the mail.”

This is the greatest Brexit book cover ever insofar as it is a metaphorical representation of both the illusory power of hot air and the willful ignorance of the gravity model.

Just for the record, I voted for the man twice and I’m a fan but my reaction to the 2009 prize was “For doing what, exactly???”

The obvious finesse answer is to give The Art of The Deal the Literature Prize.

Yeah. The natural consequence of a crap liability structure and a productive asset structure for tradeables where that sector is either tiny or where export products have lower FX elasticity.

Bottom of thread here. May be of broader interest.

The tricky question for Argentina is that the capital account response to a weaker currency is to push it weaker, even as the trade account response to a weaker currency may well be insufficiently positive to ouweigh the capital account response. This is the essence of “EMness.”

Post by @rajakorman 💬 0  🔁 0  ❤️ 0 · On spillovers, exchange rates and monetary conditions. · This post is an attempt to formalize what I've come to believe about the relationship among open capital accounts, spillove…

And www.tumblr.com/rajakorman/8...

Post by @rajakorman 💬 0  🔁 0  ❤️ 3 · Things you need to successfully devalue your way to prosperity · Kind of a checklist for anyone making policy prescriptions. A large tradeable sector. Sizeable unutilized capacit…

And www.tumblr.com/rajakorman/6...

How do emerging markets get into trouble? Let me count the ways This is a repost of a piece I did for Matt Klein’s invaluable stack “The Overshoot” in May, but I just wanted to make it available here as well.

And open.substack.com/pub/sankaran...

Rates, credit, and the ‘How Screwed Are You’ diagram An FXplanation

Here. on.ft.com/42hnOpn Rates, credit, and the ‘How Screwed Are You’ diagram

There’s a serious point here about currencies. There will be cases where the demand curve for foreign currencies will be upward sloping (i.e., demand for FX increases with price) and cases where it is downward sloping—demand for LC increases as it weakens. Spent a lot of time thinking about this.

Agree, structural impediments mean the yen will remain a carry funder for some time yet, but public hostility to rising prices is likely to constrain deficit-funded government largesse and limit Takaichi’s sway over the central bank. Could be a reversal after the obligatory tumble at the Asia open.

Mr. Market is usually playing Family Feud, not Jeopardy.

So I am content to leave this as a descriptive statement about the typical reaction function of currency traders instead of a normative statement about relations between fiscal & monetary authorities.

I know you think CBs and fiscs are part of a consolidated public sector, which is true in some sense, but also not the way that most currency traders think about this, believing rather that a fiscal authority leaning on a CB to control rates to stabilize debt/GDP is usually bad for a currency.

One interesting fact related to the above (the secret third button) may be that historically EURJPY has tended to be a pretty well behaved trender?

Consensus seems to like the left button but I’m not convinced.

I've been arguing for like 15 years now that it is utterly crazy from the point of view of risk management for a country that is both as narrowly divided and as deeply polarized as the US is to be this centralized in terms of revenue share/expenditure at sovereign vs. sub sovereign levels.

The obvious thing for Democrats to do now is to insist publicly (and by sponsoring legislation to such effect) that it is indeed the case that the apparatus of the Federal Government can be funded solely by tariffs alone.

Damn, I have some long-standing peeves.

How do they keep the wings connected without a spine?

Please note that it literally says Neoliberal Peacenik on the bio.

The modern GOP has two wings—Heritage Americans and Cato Americans.

Why now, you ask? Owned this forever and finally reading it.