Monday, November 17, 2008
Well, that was exciting.
The weekend G20 meeting was evidently highly successful, at least if we are to judge by the length of the statement the resulted from the meeting. G7 statements are usually short and (relatively) punchy, and able to fit on a single printed sheet.
The G20 statement, on the other hand, was long and expansive, filling a full eleven pages when transposed onto Microsoft Word. If it were full of detailed policy prescriptions, the length could perhaps have been justified. As it was, Macro Man tried to read the whole thing but failed out of sheer boredom.
The sentence that did it for him was the following:
"Further, we shall strive to reach agreement this year on modalities that leads to a successful conclusion to the WTO's Doha Development Agenda with an ambitious and balanced outcome."
Macro Man has very few hard and fast rules in life. One of them, however, is that any document containing the word "modalities" is a complete and utter waste of time and space.
Moving away from the world of political junkets and grandstanding (come on down, Gordon Brown!), the world still looks like a complete mess. The deterioration in US consumption continues apace, as Friday's retail sales figures figures were execrable.
Meanwhile, Japan registered its second consecutive quarter of negative growth, joining the Eurozone in achieving that dubious feat. It's amazing to think that it was only a few quarters ago that "decoupling" was a popular market theme. A quick check of Google Trends offers a reasonable list of those economies most badly affected by global re-coupling: South Korea, India, Singapore, Taiwan, and Hong Kong comprise the top 5 sources.
Elsewhere, it's perhaps a tad ominous that LIBOR has started to edge higher again. Macro Man has previously observed the tendency of LIBOR spreads to widen into the end of the quarter; now that Q4 is half over, will this be the next thing to turn the screw on risky assets?
It remains to be seen (though there has been a massive squeeze in Russian yields today), but Macro Man is pretty sure of one thing. If there is indeed a relapse into the next leg of the financial crisis, the ultimate solution will come from a source other than a multilateral boondoggle like the G20.