Apricitas Economics

Apricitas Economics provides data-driven analysis on trends in economics, finance, and public policy, with a focus on monetary policy, banking crises, inflation, labor market dynamics, and the geopolitical implications of trade disputes. It explores the effects of these elements on the global economy and financial stability, leveraging current data and forecasting to outline economic outlooks and policy impacts.

Inflation and Disinflation Banking Crises and Financial Stability Trade Wars and Semiconductor Industry Economic Outlook and Growth Trends Labor Market Dynamics Real Estate and Housing Market Technological Advancements and AI Monetary Policy and Central Banking Entrepreneurship and Business Formation Geopolitical Economics and Sanctions

The hottest Substack posts of Apricitas Economics

And their main takeaways

Core Inflation is (Finally) Cooling

46 implied HN points • 13 May 23
💰 Finance Inflation Monetary Policy
  1. Core inflation is cooling, signaling a potential slowdown in inflationary pressure.
  2. Data shows a decline in core services inflation and rent prices, indicating progress in curbing inflation.
  3. Businesses and markets expect inflation to remain above 2% in the near future, but long-run inflation expectations are stable.

The Risks Still Lurking in the Banking System

42 implied HN points • 08 May 23
💰 Finance Banking Interest Rates Deposits Market Dynamics
  1. The American banking system is facing increased risks with several banks failing and many regional banks under pressure
  2. Market movements for surviving banks show negative excess returns, with declining valuations particularly for mid-sized regional banks
  3. Understanding rates risk in the banking system requires looking at exposure to long-term assets, especially in real estate lending, and the impact on uninsured deposits

Have Rising Mortgage Rates Frozen the Housing Market?

25 implied HN points • 17 Aug 23
  1. Rising mortgage rates have made it harder for new buyers to finance home purchases.
  2. Locking in low-rate mortgages of 2021 may keep existing owners in their homes, affecting housing inventory.
  3. Mortgage rate lock-in is not the sole reason for low housing inventory; other factors like economic uncertainty play a key role.
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What Killed Signature Bank?

39 implied HN points • 01 Apr 23
💰 Finance Banking Crypto Regulation Assets Risk
  1. Signature Bank faced a severe bank run due to rapid withdrawal of deposits, leading to its collapse.
  2. The bank's heavy reliance on uninsured deposits, especially from crypto-related sources, contributed to its downfall.
  3. Regulators stepped in to prevent further financial contagion, highlighting the need for managing risks of fast-paced bank runs.

Did the Energy Crisis Accelerate The Energy Transition?

37 implied HN points • 23 Apr 23
🌞 Climate & Environment Energy crisis Renewable Energy Carbon Emissions Fossil fuels
  1. The global economy heavily relies on fossil fuels despite efforts to transition to cleaner energy sources.
  2. Efficiency gains and investment due to the recent energy crisis accelerated the growth of wind and solar energy.
  3. Different countries responded to the crisis in diverse ways, with some increasing reliance on coal, hindering the energy transition.

How the Banking System Changed Post-SVB

32 implied HN points • 05 Jun 23
💰 Finance Banking System Economic Analysis Financial Institutions Risk management Monetary Policy
  1. After the collapse of Silicon Valley Bank, the American banking industry is adapting by relying less on uninsured deposits and more on alternative funding methods like borrowings.
  2. Deposits have restabilized post-SVB crisis, but banks are facing challenges with tight lending standards due to renewed economic pessimism and liquidity concerns.
  3. Banks are cautiously navigating post-SVB crisis by reducing reliance on uninsured deposits, managing securities losses, and addressing liquidity worries amid tighter monetary policy.

The Road to Disinflation

35 implied HN points • 15 Feb 23
💰 Finance Inflation Market Economy Consumption
  1. US inflation is slowing down, especially in energy and core goods sectors.
  2. There is expected disinflation in housing and services, like rents.
  3. Financial markets anticipate longer and bumpier road to disinflation, with high growth indicators.

The US Labor Market Was Stronger Than We Thought

35 implied HN points • 04 Feb 23
  1. Updated labor market data shows strong employment and payroll gains
  2. Unemployment rate in the US is at its lowest since 1969
  3. Wage growth is decelerating in the US labor market

Supply, Demand, and Today's Inflation

28 implied HN points • 30 Mar 23
💰 Finance Inflation Supply Chains Global Economy
  1. US inflation is mainly driven by demand-side pressures due to excess money chasing limited goods
  2. Supply chain issues, like shortages and constraints, are significant contributors to persistent inflation globally
  3. Businesses are struggling to balance market demand with their production capabilities, resulting in ongoing supply chain challenges

Russia's New Friends

31 implied HN points • 18 Feb 23
🌍 World Politics Russia China Turkey Sanctions Global Trade
  1. Russia is turning to new friends like China and Turkey due to being cut off from trade with the US, EU, Japan, and others.
  2. China is a key partner for Russia in trade, particularly in oil and natural gas, machinery, electronics, and vehicles.
  3. Turkey is also becoming a significant trade partner for Russia, showing a strong growth in exports and imports, especially in manufacturing and gold.

Canada's Balancing Act

29 implied HN points • 11 Feb 23
  1. Canada's economy entered 2023 strong despite pandemic challenges and slower growth than the US.
  2. Inflation in Canada has surged, but recent data shows a possible slowdown, easing concerns.
  3. Canadian labor market shows strong recovery, with diverse job growth, rise in immigration, and low wage pressures.

Germany's Industrial Slowdown

15 implied HN points • 11 Aug 23
  1. Germany's economy has been experiencing low growth for the last 5 years, with output barely above pre-pandemic levels.
  2. Businesses in Germany are expecting layoffs across various sectors, especially in manufacturing.
  3. High prices and shortages due to the energy crisis are pressuring German manufacturers, leading to declines in critical industrial sectors.

The Case for a Fed "Skip"

19 implied HN points • 12 Jun 23
  1. The Federal Reserve may choose to skip a rate hike due to falling core nominal growth and normalized inflation expectations.
  2. Central banks globally are adopting a 'skip' approach to monetary policy, pausing rate hikes to evaluate data and balance inflation risks with other mandates.
  3. Despite concerns about inflation, the Fed is observing deceleration in labor income growth, indicating a potential easing of cyclical inflationary pressures.

The Housing Credit Crunch

20 implied HN points • 31 May 23
  1. Buyer sentiment for buying houses in the US is low due to high prices and interest rates.
  2. The pandemic mortgage boom caused a surge in housing starts and construction employment.
  3. The credit crunch is impacting American home prices with declines being regionally concentrated and affecting urban cores differently than suburbs.

Russia's Recession

32 implied HN points • 03 Dec 22
  1. Despite severe sanctions, Russia's economy has shown more resilience than expected.
  2. Sanctions have led to a significant decline in Russian manufacturing output and key industries.
  3. The economic repercussions of Russia's invasion of Ukraine have been detrimental to both countries, with Ukraine experiencing a significant economic downturn.

The Tech-cession

33 implied HN points • 19 Nov 22
  1. Tech industry experiencing declines in valuations and massive layoffs
  2. Tech layoffs may not have a significant impact on broader economy
  3. Factors like e-commerce adoption and stable ad prices offer optimism for tech industry

Tepid Optimism for a Soft Landing

17 implied HN points • 16 Jun 23
  1. The Federal Reserve is more optimistic about economic outlook, expecting lower unemployment and positive GDP growth.
  2. Short-term inflation outlook is improving, with lower CPI and core inflation rates.
  3. Businesses are also becoming optimistic, with lower inflation expectations and labor market resilience supporting economic growth.

Germany's Slowdown

17 implied HN points • 12 Apr 23
  1. Germany's economy has been falling behind, facing challenges like the energy crisis and manufacturing pressures.
  2. The energy crisis, with rising natural gas prices, has hit Germany hard, leading to significant cutbacks in energy consumption.
  3. While overall German manufacturing has shown some recovery, energy-intensive manufacturing sectors have faced drastic production cuts.

Car Inflation is Back—Don't Panic!

17 implied HN points • 17 May 23
  1. Car inflation due to chip shortage is temporary and will likely not lead to long-term price increases.
  2. Used car prices are rebounding due to strong demand and some declines in motor vehicle production.
  3. Globally, the semiconductor shortage is easing, car production is improving, and there are signs of used car price rebound already behind us.

Gilt Trip

30 implied HN points • 01 Oct 22
  1. The chaos in British markets reflects a variety of global phenomena beyond just the proposed mini-budget by the new UK prime minister.
  2. The massive movements in gilt yields were triggered by margin calls on pension funds, revealing trade-offs central banks face in setting policy.
  3. Current fiscal policies may risk a recession to combat inflation, reflecting the changing economic landscape with rising interest rates.

A Holiday Dive Into Food and Goods Inflation

24 implied HN points • 26 Nov 22
  1. Holiday season is crucial for US economy with effects on employment and retail sales.
  2. Food prices are surging due to supply chain disruptions, while durable goods prices are stabilizing.
  3. Durable goods prices are decreasing, but nondurable goods prices, particularly in pets and toys, are rising.

Car Markets at the End of the Chip Shortage

4 implied HN points • 24 Nov 23
  1. The semiconductor shortage affecting car production is over, leading to a decrease in vehicle prices.
  2. US car production is returning to pre-COVID levels despite recent strikes affecting output.
  3. Global vehicle output has improved, allowing easier access to foreign-made autos for Americans.

The British Economy Was Stronger Than We Thought

6 implied HN points • 08 Oct 23
  1. The British economy showed stronger performance than expected, with a full recovery by the end of 2021.
  2. Revisions to GDP highlighted the impact of the energy crisis on British industry and real household consumption.
  3. Major increases in output measurements were seen in the services sector, exports, and healthcare services, with downward revisions in the industrial sector.

The EU's Industrial Crunch

23 implied HN points • 24 Nov 22
  1. European industry is facing an energy shortage due to geopolitical factors impacting natural gas supplies.
  2. European manufacturers are responding to the energy crisis by increasing energy efficiency, importing more goods, or accepting lower output.
  3. Certain energy-intensive sectors like metals and chemicals are experiencing significant declines in output amidst the energy crisis.

The Inflation Reduction Act

17 implied HN points • 20 Aug 22
  1. The Inflation Reduction Act focuses on energy abundance and renewable investments to impact energy prices.
  2. The bill's impact on non-energy inflation is expected to be minimal due to delayed effects and small changes in net spending.
  3. The Inflation Reduction Act showcases important achievements in reducing carbon emissions and improving healthcare, but overall effects on inflation are limited.

Financial Conditions Are Tight, But Maybe Easing

8 implied HN points • 08 Feb 23
  1. Financial conditions may be easing due to recent data suggesting improvements in the economic outlook
  2. Although some financial conditions are easing, overall conditions still remain tight compared to normal levels
  3. Businesses are facing tight financial conditions despite credit spreads decreasing, indicating ongoing challenges in borrowing

China's Imbalanced Economy

10 implied HN points • 09 Dec 22
  1. China's economic growth model heavily relies on exports and high investment in infrastructure.
  2. The downside is that this model squeezes household consumption and makes China's economy imbalanced.
  3. China is facing challenges transitioning from an export-driven model to a consumption-driven one, with a struggling property sector and declining GDP growth.

Can Australia Keep the Miracle Going?

7 implied HN points • 24 Feb 23
  1. Australia's economic record is strong compared to other high-income nations.
  2. Australia's recovery from the pandemic has been robust.
  3. The Reserve Bank of Australia is facing challenges with high inflation and forecasts for slower GDP growth.

Are Rising Corporate Profit Margins Causing Inflation?

20 implied HN points • 01 Jan 22
  1. Corporate profit margins are not the main cause of inflation and are not strongly correlated with high inflation.
  2. Antitrust actions may have limited impact on reducing inflation, especially in industries experiencing supply shocks.
  3. Implementing price controls as a tool to combat inflation is not a practical or effective solution, as seen in historical contexts.

The New Geopolitics of American Trade

7 implied HN points • 01 Dec 22
  1. The US trade landscape has shifted due to political tensions with China and Russia.
  2. America has increased its role as a key supplier of energy commodities to Europe.
  3. Trade relationships are evolving, with the US diversifying imports away from China and strengthening ties with other regions.

Banks Face a New Challenge

6 implied HN points • 18 Nov 22
  1. Commercial banks are facing new challenges with high inflation, rising interest rates, and Quantitative Tightening.
  2. Quantitative Tightening by the Federal Reserve is impacting bank reserves, interest rates, and financial conditions.
  3. Commercial banks are adjusting their assets, with a decrease in high-quality liquid assets and a rise in loans and leases.

Life After the Volcano

11 implied HN points • 08 Jan 22
  1. Young people who moved after a volcanic eruption had higher lifetime earnings and more education
  2. The US economy was expected to exit the pandemic stronger, but faced setbacks due to variants and supply chain issues
  3. Government responses to crises, such as the pandemic, led to economic benefits and improvements in state capacity

Korea's Trade Troubles

3 implied HN points • 17 Feb 23
  1. South Korea's economy initially rebounded strongly after the pandemic due to a good response and global demand for its manufacturing industries.
  2. Recent shifts in global demand have caused trouble for South Korea's exports, leading to challenges in international markets.
  3. Rising prices for key imports like energy have contributed to South Korea's trade deficit, impacting its overall economic output.

The Great European Undershoot

14 implied HN points • 07 Aug 21
  1. The EU's economic institutions lean conservative, hindering growth and leading to economic devastation during crises like the 2008 recession and the Euro crisis.
  2. The Maastricht Treaty's restrictive criteria and lack of fiscal risk-sharing impede economic efficiency within the Eurozone, forcing countries into counterproductive austerity measures.
  3. The Euro area faces challenges as an Optimum Currency Area due to lack of fiscal sharing, diverging business cycles, and restrictive monetary policies, hindering economic growth and causing secular stagnation.

The Inflation Outlook

10 implied HN points • 12 Jan 22
  1. Inflation has been high, with CPI increasing 7% year over year in December.
  2. Demand has shifted from services to goods due to the pandemic, impacting prices.
  3. There are signs that inflation may abate, with market-based measures of expectations retreating and aggregate incomes staying on-trend.