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Jens Nordvig 🇩🇰🇺🇸🇺🇦 Profile picture
@jnordvig
Oct 1, 2020 • 4 tweets • 1 min read • Read on X
The most important chart of 2020 continues to evolve. We had the incredible situation that incomes spiked in a depression, because government transfers were so big. Now that transfers are declining, incomes are coming down, but spending is still on an uptrend via past savings. Image
This is why the fiscal stimulus debate remains the hottest issue of the day, as well as more strategically. The cut in Federal unemployment subsidies are feeding directly into this. So that piece is key, although maybe the aid for states is what the negotiation is more focused on
2020 is not like any other year. The aggressiveness of fiscal policy, in the US and globally, is different. And the interplay between fiscal policy & QE is also different. "FisQEl Policy", if you will... (as opposed to the pure asset swap QE of the 2008-2014 period).@TheStalwart
White line is 'personal disposable income, SAAR', yellow line is 'personal spending, SAAR'

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More from @jnordvig

Jens Nordvig 🇩🇰🇺🇸🇺🇦 Profile picture
Feb 21
Nvidia $NVDA is hardly a cheap stock. But you often hear the comparison to Cisco $CSCO in the bubble. Is that fair?dot.com
Here are the (most) basic Cisco stats from 1997-2002.

The stock peaked in 2002 at 23 x Revenue
- margin was 64%
- rev. growth was 55% Image
Nvidia is trading at 27 x Revenue (more expensive than Cisco at the peak)

BUT
- margin is at 73%
- rev growth is at 126% Image
Read 5 tweets
Jens Nordvig 🇩🇰🇺🇸🇺🇦 Profile picture
Dec 16, 2023
For those thinking that the inflation experiences in the 1970s and the 1980s are instructive to this cycle...

Just a few background charts...

(mini-THREAD I guess)
The US economy is way more open. Hence, a lot of price dynamics are a function of the global economy, not just what is happening at home

imports to GDP were just 5% in the early 1970s, for example. Now >15% of GDP... Image
Unions played a much bigger role in the economy (>20% in the 1970s vs <10% now), and wage growth will therefore not be determined in the same way Image
Read 7 tweets
Jens Nordvig 🇩🇰🇺🇸🇺🇦 Profile picture
Dec 12, 2023
Everybody knows the details of US used car prices, the technicalities of the rent calculation, and even the oddities around obscure CPI components such as medical services...

but perhaps it is better to look at the big picture (global trends and China)...

- just a few of charts Image
The trend in global core inflation is almost back to normal (chart above)

And when you look at China, you think; should we not worry about deflation?

Headline CPI is as negative as in the covid shock, and almost as negative as in the CFC shock Image
And when you look at the latest China data, things are getting worse (assuming that you do not like deflation)

Despite the re-opening in 2023, the Chinese economy is observing greater deflationary effects, with momentum getting incrementally more severe in recent months. Image
Read 5 tweets
Jens Nordvig 🇩🇰🇺🇸🇺🇦 Profile picture
Nov 29, 2023
The higher for longer narrative is looking increasingly stale

(a few big picture charts)
First, the global trend in core inflation momentum is very clear. The worst is certainly behind us... Image
Second, while some economies have shown greater resiliency to higher rates than expected, global credit is very weak, especially vs 2022, but also vs pre-covid trend. Image
Read 9 tweets
Jens Nordvig 🇩🇰🇺🇸🇺🇦 Profile picture
Nov 26, 2023
I spoke this weekend at the Euro conference hosted by @AlbertoBagnai in Pescara, Italy (along with @EuroBriefing @borghi_claudio and others)

A few key points from my speech... Image
The Euro-crisis climaxed about 10-years ago, and the challenges for the Eurozone have been hotly debated since Image
Since the Euro-crisis (2010-2013) there have been steps towards more integration on a number of fronts:

- NextGenerationEU has facilitated temporary fiscal transfers.
- More active CB policy (QE, PEPP etc) entailed more support for peripheral bonds Image
Read 12 tweets
Jens Nordvig 🇩🇰🇺🇸🇺🇦 Profile picture
Nov 8, 2023
I have been travelling, so only commenting on the terrible Chinese FDI data with a few days delay, even if it one important topic I care a lot about

Thread...
First, net FDI flows (counting both inflows and outflows) are now sharply negative, and it is the Chinese liabilities (the investment by foreigners into China, that is driving the swing)

- $66bn now
vs
+$100bn in Q1 2022

MASSIVE swing Image
Second, digging into the inflows, we can break the data into Greenfield FDI and reinvested earnings by combining SAFE and MOFCOM data.

The negative reinvested earnings (multinationals repatriating their earnings out of China, rather than reinvesting) is a key factor... Image
Read 7 tweets

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