Welcome to Macro Is Dead
Welcome to ‘Macro Is Dead’, a newsletter which is an obituary in memory of macro trading, detailing when, why and how it died.
Macro markets were, once upon a time, freely traded and were broadly left to adjust to the prevailing economic reality. Not to say that things were perfect, and it would be naive to ignore that private individuals manipulated select markets, sometimes in ways that were clearly illegal.
These manipulations pale in comparison to those happening in plain sight today, with most of these manipulations occurring due to perverse incentives created by legislation.
These trends are preventing most equity, interest rate, currency and commodity markets from trading with the volatility that amount of leverage underlying modern economies are running.
This is not a newsletter with political opinions. I believe that politics just represents the wants and desires of the population in democratic societies and as such isn’t worth directly getting upset about, but it is important to understand the reasons why people are making the choices they do, which leads to the outcomes and inevitabilities which affects everything.
Rather, the newsletter will concentrate on how large-scale macro tools affect the ability for markets to clear risk properly. The biggest of these is debt, whether at the government, corporate or household level.
Debt has created and simultaneously papered over economics and market issues. This newsletter will spend most of its time understanding this.