Losing the Plot

Narratives, stocks and flows, zombies and vampires

I have always held that the most important thing in economy-watching is to know what the question is. You have, after all, a decent chance of getting near the answer if you’re clear about what the question is. So it’s both embarrassing and disturbing that I must confess that right now, I’m honestly not sure what the question is for the world economy.

The normal indicators which tip you the wink as to the question are no help right now. For example, my global shocks & surprises index, which takes in approximately 500 datapoints each month, shows almost no underlying dynamic whatsoever. The 12m average has floated back to neutral, and has little prospect of doing much else for the rest of the year. More, the main regional indexes - US, Europe, Asia - all look much the same. If there’s a shared trend, its that there’s no visible trend.