JohannesBorgen Profile picture
Nov 5, 2020 9 tweets 3 min read Read on X
An update post lockdown. Unfortunately, we don't have Google mobility data post-Oct 30th (start date of the lockdown) yet, so let's look at how hospital data changed since then. Quick thread.
From worse to better, let's start with ICU. Incidence and non-parametric fit.

I certainly can't see any change. Image
Confirmed by the statistical analysis of "R" for ICU data which is still hovering around 1.2 Image
Hospital incidence now.

Same, conclusion: the curve looks the same. Image
Confirmed again by R estimate still around 1.2... BUT we can see a tiny little improvement in R. Image
Now if you remember the original thread, I found that cases and ICU/Hospitals were lagged vs. cases and also that any impact on mobility would need 8-14 days to show in hospital data. So we should see more effects of lockdown in cases. What do we have? This. Image
Ok, I realise it's not obvious, but the ugly exponential now looks slightly more like an ugly straight line. Not great, but is it better? R estimates for cases confirm it's better. Image
R is only slightly above 1 now.

BUT - and this is a BIG BUT (!) the drop in R is almost perfectly synchronized with school closures due to the school holidays.

So you have two ways of seeing this.
1) the lockdown is working and we just need to wait a bit to see the impact on hospital data

2) the schools closing drove R down... reopening it during the lockdown means the whole thing will fail.

For now, I can't tell from the data which is right. Maybe Google data will help

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More from @jeuasommenulle

Jun 11
If you're following French politics, you'll probably hear about a weird theory soon, as it's likely to go mainstream: Macron could resign, call for new presidential elections and run again, effectively bypassing the 2-term limit.

Is it credible? I don't think so and here's why.
The Constitution bans more than two consecutive terms.

Everyone pretty straightforwardly understands this as "Macron can't run again in 2027" (but could pull a Putin & come back in 2032.)
However the exact wording mentions "mandats consécutifs" which, some suggest, implies that if someone is a temporary president after Macron resigns (even for a few weeks) then a 3rd Macron term wouldn't be "consecutive." Image
Read 6 tweets
Jun 10
By now you've probably read 10 times that Macron called parliamentary elections to put RN/Le Pen in power & wait for them to mess up so much that Macron's heir will win in 2027.

I think that's a possible scenario but not his goal at all. It misses Macron's real target.

Thread.
Many reasons why it's probably not his goal.

1.- The main negative for Le Pen is that she (&her father) have always been seen as incapable of governing. They’re a protest party, nothing more. Break that taboo and you could actually help them.
2. A majority for Le Pen not certain. They've got 88 MPs, majority is 289. They scored 19% at last parliamentary elections vs 33% yesterday but were at 23% previous European elections. The two-round system makes the votes/ seats relationship highly non linear. Forecast is v hard.
Read 15 tweets
May 30
The headlines that grabbed attention yesterday was this: "ECB to Impose First-Ever Fines on Banks for Climate Failures."

But the climate and bank headline that was actually important is a totally different one.

An (important?) thread.
An “ECB” working paper (so in theory just academic work, but, errr.) published 2 days ago discussed capital buffers for climate risks. T

he basic idea makes sense: an increased pace in energy transition is good for the climate but could hurt the credit profile of some companies.
How is this assessed?
The ECB has built a macro model that’s mostly based on energy prices, spillovers & leverage / profitability that ultimately leads to probabilities of default. A neat model but tbh I’m always dubious – unfortunately macro models can’t even forecast 6mo infla
Read 10 tweets
May 13
Is another (what ?! not again!) Italian bank going to be bust?

The price action of BFF certainly doesn’t inspire much confidence.

What happened? Simple: the Bank of Italy did an inspection and suspended dividends (but not AT1 coupons.)

But why? Now, that’s a funny story. Image
The bank’s called BFF – no, it’s not your teenager’s best friend, it’s the old Banca Farma Factoring.

They have a very odd business model: they buy commercial claims on public administrations.

Because PA are so late in payments, cash strapped SME go to BFF to get their money.
On average, the Italian situation doesn’t look THAT bad (chart below). But this hide huge differences & peak delays can be extremely high.

In fact, it was so bad that the European commission decided to refer Italy to the court of justice because of it (in 2017.) Image
Read 14 tweets
Feb 20
Interesting note this morning from DB about ECB policy review and money market rates. Let me summarize it.

ECB has de facto moved from a corridor system to a floor system with unlimited MRO + QE.

But as QE etc unwind, there’s a big risk lurking. A thread
For those unfamiliar with the jargon, a corridor means that the market rate (EONIA) is stuck between two policy rates, the deposit facility rate (DLF) and the marginal lending rate (MLF.)

That’s what it looked like before 2008 & the GFC.

(Market rate is yellow) Image
After all hell broke loose in '08, the ECB flooded the market with money and this is what it looked like: market rates were stuck at ECB deposit rates because there was too much money in the system and it had to be deposited back at the ECB (ECB money is just doing round trips). Image
Read 10 tweets
Nov 24, 2023
My 2 favorite docs are the Jap & Ger financial stability reports because they give a glimpse at the horror of small unlisted banks😁(don’t sue me, I’m just kidding).

What did we get from the new German one ?

Buckle up, as they say in 10,000$ a year doomsday newsletters.
You won’t believe it: CRE is in trouble – but tbh office is surprisingly resilient so far. Image
Ok, CRE is fun, but have you tried interest rates risk and bn of securities unrealized losses in the balances sheet?

Realised is 25.8bn so total is around 70bn€. Tbh this is also not that much compared to the US shitshow. Image
Read 14 tweets

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