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Zero Equilibrium Profile picture
Zero Equilibrium
@0Equilibrium
Macroeconomics || Markets || Fixed Income || Commodities. Views are Independent and Intellectually Genuine. DM for Academic & Non-Academic Research Assistance
Sep 6 • 7 tweets • 3 min read
Financial Markets and Macro Weekly
(Zero Equilibrium for the Week Ending September 6, 2025):

This week was eventful in the markets as we looked at market expectations of Central Bank policy decision in September, France's fiscal fragility, crypto and commodity market moves and market reactions to US Jobs Numbers.

1/7 Central Banks: September Policy Outlook:

• ECB & BoE are expected to hold rates steady this September amid sticky inflation and slowing growth. UBS sees the ECB’s easing cycle concluded, while the BoE is seen pausing at 4% before a 25 bps cut in November.

• Fed is widely expected to cut rates at its September FOMC meeting (16–17th), reinforcing a weaker USD outlook.

• SNB likely to hold, while Riksbank could deliver a final 25 bps cut.

• CBN: Zero Equilibrium expectations for the central bank of Nigeria interest rate policy is to hold Monetary Policy Rates, but a cut will not be surprising if the federal reserve cuts.

ZE View: A Fed cut alongside steady ECB/BoE policy stances points to a weaker dollar, firmer EURUSD and GBPUSD, and bullish momentum for Treasuries, gold, and EM assets. But Eurozone tariff risks could cap EUR upside, or even create a bearish situation.

2/7
Sep 4 • 9 tweets • 2 min read
Certain Economic Truths A Politician cannot be Caught Dead Saying: 🧵

1. “There's always going to be a portion of the labor market that will be unemployed at every point in time”

It’s called natural unemployment. Even in the healthiest economies, people change jobs, industries shift, and skills mismatch.

1/9 2. Inflation isn't always bad, and could be necessary to grease the wheels of capitalism.

Moderate inflation keeps money moving, makes debt easier to manage, and prevents wage stagnation. Zero or negative inflation can stall growth, as it would mean demand is failing or stagnant.

2/9
Jun 30 • 30 tweets • 5 min read
A Review of Human Minsky's Financial Instability Hypothesis in 'Can it Happen Again' 🧵 2/2;

An Effective Monetary Policy Constraint:
Given the threat of a run of deposits from savings and loans companies,....
1/29 Image He states that "the one effective constraint upon the Federal Reserve policies is the need to maintain interest rates on secure assets available to households in the neighborhood of the rates which savings and loans associations and mutual savings banks can afford to pay."
2/29
Jun 30 • 19 tweets • 3 min read
A Review of Human Minsky's Financial Instability Hypothesis in 'Can it Happen Again' 🧵 1/2

Chapter 8: The New uses of Monetary Powers.

Here Minsky talks about the changes in the markets due to strains and stresses.

1/19 Image And as a result of this, "market instruments, institutions and usages have undergone marked changes, as well as the Federal Reserve System as well as other agencies of the peculiarly decentralized central bank of the United States [Fed],...
2/19
Jun 26 • 8 tweets • 2 min read
'Oil climbs as investors shift focus to demand signals, dollar weakens'

By - Nicole Jao for @Reuters

Crude Oil inventories not the war is driving oil prices. The U.S. demand as well as refining challenges...

1/8
reuters.com/business/energ… ... coupled with a weaker dollar are also factors that seem supportive of Oil.

Per @Reuters; "The market is starting to digest the fact that crude oil inventories are very tight all of a sudden".

2/8
Jun 26 • 11 tweets • 2 min read
On Milei’s “New Feat”: Why the dust Has not Settled.

A lot has been said about the Argentine economic growth, as they return to positive territory leaving out the hidden conjectures as economists on tos X space seem focused on the surface data.
1/11 This misses the broader context that challenges the narrative around the Milei turnaround.

The 5.8% growth is nothing but a marginal improvement at grave costs with sustainability in doubt, and the countries economic situation is just as precarious and unstable as before.
2/11
Jun 15 • 11 tweets • 2 min read
The Iran-Israel War: What It Means for Oil & Gold Prices 🧵.

The war between Iran & Israel aren't just geopolitics, they ripple through global markets. Oil and gold are first responders. We outline how the war affects both commodities.
#OilPrices #Gold #MiddleEast
1/11 #OilPrices:

Volatility is on high alert
as the Middle East holds over 30% of the world’s oil. Any threat to shipping lanes like the Strait of Hormuz (which Iran borders) sends oil prices climbing, due to supply fears and risk premium attached to the commodity.
#OilPrices
2/11
May 30 • 26 tweets • 4 min read
Chapter 7 Central Banking and Money Market Challenges 🧵 4/4:
Limited Scope of Action:

Unless the Central Bank acts strongly to decrease money supply, monetary policy has only a limited domain of effectiveness in controlling inflationary pressures."
1/26 Still, he maintains that monetary policy has "very limited effectiveness both in controlling inflation and in counteracting a depression".

A reverse side to the increase in velocity is that "every institutional innovation which results in both new ways to finance...
2/26
May 27 • 14 tweets • 3 min read
Chapter 7 Central Banking and Money Market 🧵 3/4:

Considerable Dangers and the Complexities of Minsky's Proposed Solution to problems raised by Nonfinancial Corporations:

In pointing out the dangers of nonfinancial corporations finding government bond houses,...
1/14 ...Minsky asserted that "once nonfinancial corporations are habituated to making "loans" with government debt as collateral, the possibility exists that collateralized loans using nongovernmental paper will develop".
2/14
May 26 • 22 tweets • 4 min read
Chapter 7: Central Banking and Money Market Challenges 🧵 2/4:

The financing of government bond houses: Sales and repurchase agreements with Nonfinancial corporations:

Repurchase agreements with nonfinancial corporations were a major source of funds...
1/22 ..for government bondhouses in mid-1956. In a repurchase agreement, the lending entity receives a stated contractual interest rate in he future, on the bond he purchased from the borrower, upon whom the payment liability lies.
2/22
May 26 • 21 tweets • 4 min read
Chapter 7: Central Banking and Money Market Challenges 🧵 1/4:

In this chapter, Minsky analyses and discussed the effects (and relationship) between Central banks and the money market and how it affects the overall economy. As well as the role/ aims of the central bank.

1/21 Image The ability of the Central Bank to achieve it's aim is greatly dependent on how it's policies and operations affect various aspects that make up the money market. "Hence the efficacy of any particular technique of monetary policy depends upon...
2/21
May 23 • 26 tweets • 5 min read
Chapter 6 Financial Instability Revisited: The Economics of Disaster. 🧵 6b/b/6;

In this last thread 🧵 Minsky we present Minksy's thoughts on Unit and System Instability and Central Bank Policy as it in the face of financial crisis.
1/26 Unit and System Instability:
Financial instability occurs when the tolerance of the financial system to shocks has been tested and decreased significantly. This is usually over phenomena that accumulate over a prolonged boom. These are;

2/26
May 22 • 21 tweets • 4 min read
Chapter 6 Financial Instability Revisited: The Economics of Disaster. 🧵 6a/b/6:

The Banking Theory for all Units:

Here Minsky analyses all economic units as though they were banks. With the "essential characteristic" being that...
1/21 ...these units finance their positions by "emitting liabilities". He says! "A financial institution doesn't expect to meet the commitments stated in its liabilities by selling out its position, or allow f it's portfolio to run off",...
2/21
May 21 • 26 tweets • 4 min read
Chapter 6: Financial Instability Revisited: The Economics of Disaster 🧵 5/6:

The Workings of Tight Money:

Here Minsky discusses how tight money can work to restrain demand. Tight Money here is defined as "rising nominal interest rates associated with...
1/26 ...stricter terms of contracts".

This he says may work to restrain demand in two ways;

- The Conventional View; here "tight money operates through rationing demand by means of rising interest rates."
2/26
May 6 • 21 tweets • 4 min read
Liberal and Doctrinaire Socialism: The Difference.
Response to @PerBylund II.

One common misconception about Keynes is that he had a socialist ideology. This is ra half-truth.

There's a difference between liberal socialism and doctrinaire socialism. Back to the paper;
1/21 On the "declaration" 119 days after the publication of the General Theory that;
"Until recently events in [Soviet] Russia were moving too fast and the gap between the paper professions and the actual achievements was too wide for a proper account to be possible."
2/21
May 6 • 17 tweets • 3 min read
Re: Was Keynes a Socialist?
Reasons to @PerBylund

Keynes obviously had an admiration for the Bolsheviks, that can't be denied. But did that make him a Socialist by the traditional definition? No.

To understand why I said know you'd have to look at his home politics,...
1/17 ...and policies he advocated for, but more importantly why.

Keynes was a pragmatist politically and a realist, in his economics. He'd obviously seem the merits ND demerits of both systems —the begining of the evolution of his thought process.
2/17
May 4 • 25 tweets • 4 min read
Chapter 6 Financial Instability Revisited The Economics of Disaster 🧵 4/6:

Financial Instability and Asset Prices/Valuation:

Here Minsky explains the role of uncertainty and liquidity preferences in asset pricing and by extension income determination.
1/25 Keynesian Economics and Uncertainty:

"The essential difference between Keynesian and both classical and neoclassical economics is the importance attached to uncertainty." The Keynesian proposition with respect to money,...
2/25
May 2 • 11 tweets • 2 min read
Chapter 6 Financial Instability Revisited The Economics of Disaster 🧵 3/6:

Cash Flows:

Financial crises, he says, occurs "because units need or desire more cash than is available from their usual sources". They then "resort to unusual ways to raise cash".
1/18 Minsky examines various types of cash Flows, the relationship among them and with other characteristics, in this section.

The "varying reliability of sources of cash flow is a well-known phenomenon in banking theory".
2/18
May 1 • 14 tweets • 2 min read
Chapter 6 Financial Instability Revisited: The Economics of Disaster 🧵 2/6;

Financial Institutions as both Demanders and Suppliers of Capital:
Minsky points that Financial Institutions are "simultaneously demanders in one and suppliers in another set of financial markets."
1/13 Once euphoria sets in, they accept liability structures of borrowers they would not have accepted in "a sober expectational climate".

Money and Treasury bills become expensive to hold (ie have a high opportunity cost), in relation to riskier higher yielding...
2/13
May 1 • 22 tweets • 4 min read
Can It Happen Again Chapter 6:
Financial Instability Revisited: The Economics of Disaster 🧵 1/6

Here the repeated occurrences of financial crises is discussed and analysed in detail. He looked to answer the questions whether; the fundamental changes...
1/22 ...in the US economic system can prevent another great depression or whether "our knowledge and power is still inadequate as that crises and deep depressions are still possible."

Minsky argues here that, "fundamentals are unchanged" and "sustained...
2/22
Apr 25 • 6 tweets • 1 min read
Chapter 5: The Financial Instability Hypothesis: A Restatement 🧵 4(b)/4:

It's been established that the government intervention could lead to instability blurring the the lines between growth and crisis.

1/6 Minsky ends with a note that;
"the "foolishness" of bankers, businessmen, and government guarantors is floated off by massive government deficits that lead to profits which validate aggregate past investment and overall business liabilities,...
2/6