Wednesday, February 18, 2009

Fun With Acronyms

Macro Man is having fun with acronyms today. It started with a visit to the hospital this morning, where he got an MRI scan on his injured knee.

Upon his return, he saw his email inbox full of comments on currency weakness in Russia, India, Brazil, and even China; it seems as if the Big Bad Wolf has managed to huff and puff and blow down even the House of BRICS.

And what of the four little PIGS? German finance minister Peer "there's no crisis in Europe" Steinbrueck admitted this morning that Germany and France may have to bail out entire countries, rather than just dodgy banks.

If the periphery of Europe is looking like a vegetable, it should come as no surprise. One analyst that clearly has too much time on his hands recently suggested grouping Russia, Hungary, Ukraine, the BAltics , Romania, and Bulgaria together into one big RHUBARB pie. Needless to say, the pie is looking badly burned at the moment.

All of this got Macro Man thinking. Regular readers will know that one of his favourite themes of the past several months has been the collapse in global trade, and particularly its impact upon Asia. It would be nice to come up with a snappy, apt acronym for vulnerable Asian nations, wouldn't it?

Just look at Singapore, where all manner of statistics, including y/y GDP growth (pictured below) have fallen off a cliff.
And what of Hong Kong, which has benefited from liquidity, property, and China bubbles over the past few years? Prime real estate on the Peak has already fallen some 20% from, but could easily drop another 30% if not more. Ouch!

Indonesia is rarely too far from any regional tempest, and this time is no exception. Overall economic activity has started to tail off badly, local currency asset markets look vulnerable, and Indonesian trade has collapsed. Exports (pictured below) have fallen 50%, but the trade balance has actually improved, because imports are falling close to 60% y/y. Observe how the export figures are worse than anything observed during the last recession, or even the Asian crisis.
And finally, special mention should be made of Taiwan, which this morning released Q4 GDP figures showing an 8.36% y/y decline. Not only is that the world's worst (non-Zimbabwe division), it's also the worst that Taiwan has seen since at least 1962, the first year of Bloomberg data. (In fairness, there's only another baker's dozen of possible years in any event!) It's amazing to think that it was only three quarters ago that market punters, including Macro Man, were bullish on Taiwan's growth prospects as economic ties to Beijing strengthened. It seems like half a lifetime ago....
So there you are: Singapore, Hong Kong, Indonesia, and Taiwan. Four Asian economies in a world of hurt. But for the life of him, Macro Man cannot think of any sort of acronym that could possibly highlight the state of the economy in SE Asia. Gee, maybe some things just aren't meant to have an acronym. Then again......


Anonymous said...

Didn't Japan recently report -12.7% y/y for Q4?
I submit, to appease both the geeks (I assume that constitutes the majority of readers) and the civil (the remainder): The SITH.

Matador said...

Nice one MM, back in form.

Bloomberg also has a function giving "invaluable" insight in gold, just type in BULLSHIT.



Macro Man said...

Anon, that -12.7 was q/q, annualized. The y/y was down 3.8%.

Matador, that is SENSATIONAL. How is is that I never heard of that before?

Adrem said...

Nice one MM it TISH?

How much of the Asian setbacks simply reflect the gravitational effects of that great planet in their midst - China? Coastal China reacts to the collapse in its export business, and bang, bang, like a trainload trucks, the rest of the Asians get hit. But as the Wizard of Oz might have said: You might be on your knees now but there is one thing you have that the West doesn’t have - flexibility. Knowing the Chinese I wouldn’t mind betting they spring back to life far quicker and sooner than America and Europe. The latter have an unnerving habit of sitting around expecting their governments “to do something” , which they do, and probably get it wrong.
Perhaps the West suffers from intellectual overload. It takes a supposedly unintellectual woman like Ms Palin to say Obama should veto the spending bill so that everyone can take a look at its 1,000 pages and give some input, instead of having a coterie of Democrats cook it up behind closed doors. It is hard to asses the likely impact of what has been done on the markets but it is difficult to think it is good.

Anonymous said...

Entertaining column, thanks as always. My interests are primarily with all things Ukraine, where I suppose the only question is when default will come. Office pool says by month end. Re the US stimulus bill, my machine received a robo call from ACORN, a group that has a piece of $2 billion to buy up foreclosed properties and reduce mortgage principal for homeowners who are under water. Their sales pitch was an angry rant about predatory lenders and bad banks. It is perahps revealing that the government has chosen them as its community voice and dispenser of cash.

Matador said...

It's a prop indicator that's why ;-)
It's amazing what you can find out with a Bloomberg machine and time in your hands ...


SFOT said...

Matador, this is amazing, and BULLSHIT2, 3, 4 and so on. Brilliant.

MM, great post on the asian economies. Just led to me thinking asian related oil and possibly other commodities are not going to recover anytime soon. See singapore exports are down its most ever yyoy at -34.8%.

Anonymous said...

How about SHITAKE? or shit-take? LOL.



Vandalsstolemyhandle said...

Poland, Hungary, Ukraine, Korea, Taiwan...

Michael Garcia said...

How about HITS? Convergence/Divergence on macro dislocations - HITS as a thematic play.

Current Thematic HITS cross asset class opportunities"

1) Macro dislocations - currency and Fixed Income
2) Real Assets - distressed
3) Global Trade - equities - currency

Vandalsstolemyhandle said...

I'm reasonably sure that back in the day, BULLSHIT used to take you to a Credit Lyonnais Research page

graz-111 said...

You're a freaking genius. You have peceived a new coupling phenomonon(sp)

Poland, Italy, Ireland, Greece and Spain have now coupled with Singapore, Hong Kong, Indonesia and Taiwain to form:

P.I.I.G. S.H.I.T.

I'm all in.

jonathan said...

Being in Britain, you could / should add an "e" at the end. Maybe adding "Everyone else" would do it.

okl said...

I prefer PIG'S SHIT


Hong Kong