Intrigues & Curiosities
- Japan’s Debt Crisis Visualized
- Market Cycles Delineated
- Visualizing the Keynesian Endpoint
- Mastering Investment Process
- The Keynesian Endpoint in Europe
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Japan’s Debt Problem Visualized
Here we present a short visual explanation of Japan’s debt problem. In just a few short minutes you’ll have a deep understanding of Japan’s (impending) debt crisis. Created by Addogram Inspired by the work of Kyle Bass of Hayman Capital. Music courtesy of DoKashiteru (“Sounds Like A”) [Creative Commons license]. Icons largely courtesy of New Mediators [Creative Commons...
read moreWhy Japan Can’t Fund Itself Any Longer [Global Sectoral Balances Chart]
![Why Japan Can’t Fund Itself Any Longer [Global Sectoral Balances Chart]](http://www.addogram.com/wp-content/uploads/et_temp/sectoral-balances-around-the-world1-210471_184x184.png)
In 2009, the Japanese government’s average debt cost was (at most) 3% away from a rate that would force it to pay interest out of newly issued debt (think: a household paying credit card interest with new credit cards). Today that metric is at best the same and possibly worse. In short, Japan’s fiscal condition is vulnerable to rapid deterioration. This much is clear. Even so; some argue that the likelihood of such a deterioration is small since Japan “funds itself”. Well, here we’ll look at sectoral...
read moreThe Keynesian Endpoint in Europe
The Keynesian endpoint is when the entirety of government tax revenues has to be used for paying interest on the public debt. At this point a sovereign feels compelled to monetize an exponentially increasing debt load and/or default. It may well be that we’re on the cusp of a multi-decade period of sovereigns reaching this point, hence our recent infographic on the US public debt from 1792 to the present day. Here we’ll switch our attention to Europe. See below for an infographic comparing critical metrics (debt-to-revenue and...
read moreMastering Investment Process: How to Set Up and Manage a Portfolio of Asymmetric Trades
(Photo: .pst) Getting your investment process right can be really tricky. If you look for material on the subject you’ll likely find ideal practices (discipline, intellectual independence etc.) but no explanation of how to achieve them. Or if not you’ll probably stumble upon tactics that are so specific to the advice-giver’s circumstances that they’re unintelligible to everybody else (e.g. “always cut your losses at X%” … why X% and not X+1%?). Often you’ll find contradictory...
read moreVisualizing the Keynesian Endpoint
The other day AmeriCatalyst posted an excellent video of Kyle Bass’s keynote speech at their 2012 conference. He spoke lucidly about the “Keynesian Endpoint”, debt super-cycles, the Federal Reserve’s inability to move rates from 0% and the (unintuitive) interconnectedness of sovereign default and hyperinflation. Here we present an infographic plotting the development of these ideas and mechanisms from 1792 to the present day. Click here for enlarged version. Click here for enlarged...
read moreMarket Cycles Delineated
Edson Gould, deceased author of the once-famous Findings & Forecasts investment newsletter often said that “History always repeats, only the details change”. This insight, a handful of carefully chosen technical indicators, and a deep understanding of crowd psychology enabled him to make some remarkable calls during his career. The graphic below plots Gould’s “Sentimeter” (“the market price of $1 of dividends”) the inverse of the US 10-year Treasury yield, the gold price and an index of commodity...
read moreVisualizing the World’s Shifting FX Reserves with “Dynamic” Pie Charts
It’s estimated that the pound sterling made up around 64% of the world’s official FX reserves in 1899. It had fallen to about 48% by 1913. As you’ll likely glean from the graphic below, historic recurrence seems to like operating in base-100 when it comes to reserve currencies. The dollar’s share of global (official allocated) FX reserves has fallen from 72% in 1999 to 62% at present. The center of each “dynamic” pie chart below shows the composition of official (allocated) foreign exchange reserves in...
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