Category: Macro Posts

This is from IMF

“Large denomination banknotes pose institutional risks. First, they are an important vehicle for money laundering. The larger value of the banknote makes it easier to transport larger amounts of money. As an example, US $1 million in currency in $100 bills weighs 22 pounds, where as one million dollars in €500 notes would weigh less than 3 pounds. Second, large denomination banknotes are more often forged. The U.S. Treasury considered re-issuing a US$500 banknote when the Euro 500 banknotes began circulating.However, after the recognition that such a banknote would fuel worldwide criminals, it was decided not to pursue this option. Third, high denomination banknotes are most likely used for overseas circulation with no supervision from the respective central bank. One estimate for the United States suggests that about 65 percent ($580 billion) of all banknotes are in circulation outside of the U.S. There are a number of countries which are officially dollarized, which could in part explain this high percentage”

This is what WSJ writes in an editorial “cash is dead long live cash ”

The most likely reason for the cash paradox, analysts say: a thriving global underground economy of tax evasion, organized crime and terrorism financing. Digital payments may be faster and more efficient, but cash cloaks transactions in privacy.In a 2015 report titled “Why Is Cash Still King?” Europe’s police agency, Europol, concluded that “while cash is slowly falling out of favor with consumers, it remains the criminals’ instrument of choice.”

And this one from Vivek Kaul ……Since January 2017, the currency in circulation has been increasing every week. This has been happening with the printing presses of the Reserve Bank of India and the government, printing and pumping money into the financial system through banks. Take a look at Figure 1.

As can be seen form Figure 1, the currency under circulation has been going up from January 6, 2017, as the RBI and the government have printed and pumped money into the financial system.

Take a look at Figure 2. It plots the rate at which currency circulation has been increasing week on week since January 6, 2017.

Figure 2 makes for a very interesting reading. The highest increase in the rate of increase in currency circulation came in the period of one week ending January 13, 2017, at 5.9 per cent. Since then the overall trend has been down, with jumps in between. Having said that, the rate of increase in currency circulation has seen a downward trend between March 10 and March 31, 2017.

The rate of increase in currency in circulation for the week ending March 31, 2017, was at the lowest level since January 2017, at 1.7 per cent. What does this mean? It means that the RBI is not releasing currency to the banks at the same pace as it was in the past ( not that cashless transactions have suddenly gone up). The rate of currency release at RBI’s level has come down. And that basically means banks don’t have enough currency/cash to load into ATMs as they had in the past.

This explains why there has been shortage of currency at ATMs. It could also mean that the RBI and the government printing presses are not printing as much currency as they were doing in the past. Why is this happening is something only the central bank and the government can explain.

We know cashless economy has not taken off in the way our government envisaged but by restricting the supply of currency,govt is not going to achieve cashless economy. On the contrary business actitvity could slow down further. The IMF paper makes a case against large denomination notes and that is why I am still not clear of the rationale for issuing high denomination (2000 rupee) note in India ,but I am getting increasingly convinced that the authorities might restrict the printing and use of 2000 rupee note in near future.

 

 

 

Following chart depicts the literal meaning of Indian States

 

Source: @onlmaps, @josephncohen

80% of Indians consider religion as most important (for rest it is cricket and bollywood)

The changing global religious landscape

Russell is one of my favorite economists and this post is heavy on economic fundamentals. He talks about a new and emerging world . A world in which companies having dollar liabilities will find it difficult to pay back their Dollar loans as US look to reduce its current account deficit .This will lead to much higher Dollar v/s other currencies. This post ties up with what Peter Zeihan writes on world without US protection in “The accidental Superpower”. After all if the only bully in class leaves then everybody wants to be a bully

By Russell Napier

The USD will rise as US growth slows. That is clearly not a consensus view. The consensus believes that the strength of the USD rests largely, if not solely, on the prospect for increasing interest rate differentials between the US and other key jurisdictions. Most investors expect that this has to be higher growth in the US, leading to higher interest rates that must underpin a further rise in the USD. Almost always investors seeking to profit from exchange rate movements focus on growth/inflation/interest rate differentials in planning where to place their bets. Thus, in recent weeks the USD has fallen on the international exchanges as concerns have grown about the President’s ability to deliver on his growth agenda. It is almost always correct to focus on growth/inflation/interest rate differentials in assessing the outlook for exchange rates, though it is a pursuit fraught with difficulties. Sometimes, if rarely, it is the wrong business to be in and the consequences are disastrous. Those who spent 1970 speculating as to whether the newly appointed Fed Chairman, Arthur Burns, was brewing one or two rate rises are not remembered kindly by history. That myopia led them to miss an event that determined investment returns for at least the next decade – the collapse of the global monetary system/Bretton Woods Agreement. Investors focusing on growth/inflation/interest rate differentials today are missing the fact that, once again, the global monetary system is breaking down. The continuing breakdown of our current system, driven by the inability or unwillingness of developed world nations to run current account deficits, will continue to push the USD higher as growth in the US falters.

In previous quarterly reports The Solid Ground has focused on the key structural changes that have led to a US economy that grows without a worsening current account deficit. These key forces include a shift in the consumption of services from goods by the baby boom generation, a rising savings rate – albeit rising at a glacial pace – and the shale oil and gas boom. These three factors are pushing the US economy towards a current account surplus even as the economy grows. Should the economy slow, then the normal cyclical forces would rapidly quicken the pace of that current account contraction. Based on recent market reaction, some investors would sell the USD as US growth slows and the likelihood of interest rises decline. However, this Pavlovian reaction ignores the fact that such a growth slowdown would further reduce the US current account deficit with profound negative impacts for Emerging Markets (EMs) and the stability of the current global monetary system.

A profound US economic reality has changed without investors paying it much attention. From 1992 to 2006 there was one economic certainty – if the US economy grew, the country’s current account deficit, relative to GDP, would also increase. A growing economy combined with a current account deficit that grew even more quickly produced large and growing current account surpluses elsewhere. Where those surpluses occurred in countries managing their exchange rates relative to the USD, they forced domestic liquidity creation through the process of the accumulation of foreign exchange reserves. Of course the capital account, whether in surplus or deficit, also played a role in determining the scale of liquidity creation in those jurisdictions managing exchange rates. As we have now seen in many cycles, capital, particularly short-term capital, is pro-cyclical in nature and tended to flow towards those countries witnessing high growth, boosted by their success in trade. The alchemy forced money creation in EMs while their central banks financed the US current account deficit by buying ever more Treasury securities. This ability of the US to run ever larger current account deficits as it posted high levels of domestic growth was the cornerstone of a global monetary system that was stitched together post the Asian economic crisis. That cornerstone has now collapsed, as the US current account deficit has collapsed, and that is the key to calling a bull market in the USD. That is a bull market that intensifies as US growth slows, the current account contraction accelerates and the stress on the current global monetary system becomes ever more apparent.

Our current monetary system, based upon EMs managing their exchange rates relative to the USD, was constructed in a very different age. It was an age when higher US growth meant higher US current account deficits but that age is over. The last US economic contraction ended in June 2009 – almost eight years ago. By June 2009 the US current account deficit had already collapsed from 5.94% of GDP in 3Q 2006 to just 3.6% of GDP. In 4Q 2016 the US current account deficit was just 2.55% of GDP. After almost eight years of growth the US current account deficit, relative to GDP, is smaller than it was when the economic expansion began. This is a new way for the US to grow and it has profound impacts on global financial stability and the outlook for the USD. With Euroland and Japan also running surpluses, the global monetary system, as currently constituted, is bringing tighter monetary policy to EMs and, more importantly, is structurally redundant. This matters in a world where EMs accounted for 79% of world GDP growth from 2010-2015 and the world’s debt to GDP ratio has reached new all time highs. The prospects that the lack of developed world current account deficits creates a global growth slowdown and a debt crisis are thus high.

That tightness of monetary policy in EMs is not necessarily steadily applied as sometimes EMs receive bursts of net capital inflows that offset the problems associated with the lack of developed world current account deficits. Sometimes it works the other way, as net capital outflow exacerbates the tightening of EM monetary policy as central banks act to defend their exchange rates. However, the condition of EM current account deficits goes to the robustness of the system and determines the extent to which EMs are impacted by shifts in capital flows. The deterioration in EM current accounts since 2009 has been marked. In 2009 EMs posted combined current account surpluses of US$238bn, but by 2016 this had become a combined current account deficit of US$79bn. That combined deficit stops the creation of more EM money through the mechanism of foreign exchange intervention, unless they are recipients of more than offsetting net capital inflows. As the US produces an annual current account deficit close to US$500bn, any contraction in that deficit can lead rapidly to major EM current account deteriorations and a further monetary squeeze. From 2008 to 2009 the US current account deficit shrank by US$306bn in what was obviously a severe recession. While a US growth slowdown is unlikely to have such a dramatic impact on the current account today, it will come at a time when EMs are in current account deficits and not the huge surpluses reported the last time US economic growth began to slow during 2008. Now that Ems’ large current account surpluses have been eradicated, they are much more vulnerable to any contraction in the US$500bn current account deficit.

A move to an even smaller US current account deficit, hastened by a US growth slowdown, all but guarantees that our current global monetary system, dominated by EMs’ insistence in managing their exchange rates primarily relative to the USD, would be further tested and result in either devaluations or deflation. Either form of adjustment, in a world where debt-to-GDP ratios have reached all-time highs, would produce debt defaults and a rush to de-gear. As we saw in 2H 2008, any move to a de-gearing results in a rise in the USD as a world repaying debts is a world that is a net buyer of USD. The Bretton Woods system collapsed as the US ran ever-larger current account deficits, undermining faith in their ability to maintain the dollar’s link to gold. Today the failure of the current monetary system is due to the inability of the US and other developed world nations to run sufficiently large current account deficits. This breakdown in the system comes in a very different world from the late nineteen- sixties, when the global monetary system was last breaking down. Today EMs account for 56% of global GDP and 79% of the growth in global GDP; a monetary tightening in those jurisdictions has profound impacts for global growth and inflation.

Creating insufficient monetary growth, due to lack of developed world deficits, in the EMs managing their exchange rates relative to the USD forces them to either devalue or deflate.Most politicians chose the path of devaluation rather than the pain of internal deflation and the USD moves ever higher as the USD price of exports from EMs moves ever lower. When the Bretton Woods system collapsed, inflation erupted as the fetters on money creation in the US and elsewhere were lifted. As our current monetary system collapses, through major devaluations relative to the USD, we should initially expect deflation as the USD price of globally traded goods collapses and as some EMs are crushed under their huge foreign currency debt obligations. With interest rates and inflation at such low levels, faith in the ability of central bankers to summon a cure for this deflationary shock will likely be very low.

Subscribers to The Solid Ground will have read about the key structural forces that are undermining the value of the Yen (insufficient savings to fund the state), the RMB (the end of mercantilism), the Euro (a recognition that the political union to support the currency union cannot progress) and the currencies of key EMs that have seen insufficient improvement in their external accounts to make their foreign currency debt burdens sustainable. It is these structural problems outside the US that will fundamentally drive the USD higher, putting ever further pressure on those whose currencies are linked to the USD. Adding a US growth slowdown and an even smaller US current account deficit to this equation will only act to push the USD higher.

Of course, the forecast for a continuation of the USD bull market could be wrong. The route to a weaker USD is a scale of US economic acceleration that produces a rapid widening of the current account deficit. The failure of the US current account deficit to widen throughout the 2009-2017 economic expansion provides significant evidence that no such blow-out in the US current account deficit is likely. It seems that the President would be minded to take direct action to attack any such deterioration in the US current account as he seeks to put ‘America First’. So of course a weaker USD is possible, but it remains not probable. It is also worth remembering that even during such periods of growth before, the USD still managed to rise from 1982-1985 and 1995-2001. So the USD can rise if US growth slows or if it accelerates! That will sound too good to be true but it is based upon the fact that the US economy has changed for the first time since the end of Bretton Woods. This is a country that can grow without increasing the size of its current account deficit. That one fact changes the world and changes the USD.

There has been a very dramatic change in the consensus on markets since February 2016. Even before the election of President Trump the market had changed to reflect reflation and discount deflation. This analyst sees no reason for such optimism unless there is a rapid and material deterioration in developed world external accounts and, in particular, in the US external accounts. China has been the seat of global reflation since February 2016 but its policy makers’ ability to dictate higher back lending and money growth must ultimately be entirely incompatible with its commitment to manage its exchange rate. That incompatability is evident in the surge in key RMB interest rates since the election of President Trump. Across EMs the stark choice remains for either deflation or devaluation and both are entirely contrary to consensus thinking. Those betting on accelerating global growth and a higher USD are missing the key problem that developed world growth is seemingly incapable of producing worsening external accounts. Until that changes, it is better to expect deflation than inflation and any slowing of US growth will increase deflationary forces and push the USD higher. The more that happens, EMs face a simple choice regarding their exchange rate management regimes – ‘cut it loose or let it drag em down’. They’ll ‘cut it loose’ and the chaos associated with the political necessity of formulating a new global monetary system will begin. Then the answers to all the questions that count can only be found not in growth/inflation/interest rate differentials but in the political system that for all investors is ‘the darkness on the edge of town’.

‘Tonight I’ll be on that hill `cause I can’t stop

I’ll be on that hill with everything I got

With our lives on the line where dreams are found and lost

I’ll be there on time and I’ll pay the cost

For wanting things that can only be found

In the darkness on the edge of town

In the darkness on the edge of town’

An excellent presentation on global markets by Kevin duffy outlining  bull and bear case

“We must not forget that, for the last six or eight years monetary policy all over the world has followed the advice of the stabilizers. It is high time that their influence, which has already done harm enough, should be overthrown.”
~ Friedrich Hayek, 1932

www.grantspub.com/files/presentations/Kevin Duffy Presentation.pdf

China House Prices and what a bounce in last 18 months

This is not Vancouver or Australia house price ….. this is San Francisco

But nobody is taking loans for business.For a contraction to start, banks don’t have to call loans.
All that is needed is that bankers become nervous and stop making them.

US Shale Oil is Killing OPEC. US now exports oil and is no longer interested in the security of middle east or its oil

“At the peak of the 2014 boom, the break-even cost of U.S. shale oil was $60. Today, the figure is nearer to $30. In some places, the breakeven cost is just $15 a barrel.”- The Times, March 20.

This one is of ART.The chart is of sales volume.Double Top with 2007 and 2014.At the tops,there must have been a lot of certainty.

Check out the followingThe art piece, “My Bed”was originally sold by the artist for £150,000 in 1999 to an art dealer, for display. In 2015 it was sold at auction for £2.5 million.

Small Business optimisim is soaring. Post Trump Optimism is in Red.Real Earnings are in Black.

JP Morgan believes that used car prices will crash by upto 50%.

China has a huge shadow banking system .China has been responsible for 50% of global credit growth in since last 5 years and china shadow banking aided by cheap liquidity has played a big role in this growth

 

Total global debt (govt+corporate+household) stands at $230 trillion which is more than 300% of total annual Gross Domestic Product (GDP) of the entire world. The United States recorded a government debt equivalent to 104.17 percent of the country’s GDP. If we look at the US debt and narrow the focus to just government debt, then we find that the US accounts for $20 trillion out of nearly $59 trillion or about 1/3rd.

There is too much focus on this $ 20 trillion of US govt debt and less focus on debt owed by emerging market which stands at about 50% greater than that figure. Emerging Market corporate debt share of the global credit market has been increasing and now accounts for about 18% of all U.S. dollar-denominated corporate debt in the world. Emerging Market debt has increased 300% since 2005 alone. The USA has the biggest, most viable economy and reserve currency of the world. If US is the core then rest of the world is Periphery.  The foreign bond defaults in 1931 is what created the Great Depression and it did not NOT because the US defaulted, but because the USA adopted AUSTERITY and allowed deflation to dominate – the same mistake made in Europe today.In absence of global growth pickup ,I see defaults outside of US and it can originate from Europe or emerging markets corporates who have borrowed heavily leading to more capital outflows from rest of the world into US creating huge demand for US dollar. 

In times of crisis Capital always shifts back from periphery to core

Raoul Pal is a great macro thinker and is author of Global Macro Investor ,a highly acclaimed institutional newsletter. Raoul identifies big trends ahead of time and has 24000 twitter followers . His next big call is

INDIA
By Raoul Pal
March 2017

I’m going to blow your mind with this following article. My mind is still reeling from my discovery and from writing this piece.

Let me enlighten you…

Companies that create massively outsized technological breakthroughs tend to capture the investing population’s attention and thus their share prices trade at huge multiples, as future growth and future revenues are extrapolated into the future.

From time to time, entire countries re-model their economies and shift their growth trajectory. The most recent example was the liberalisation of China’s economy and massive spending on infrastructure, which together created an incredibly powerful force for growth over the last two decades.

But it is very rare indeed that a country develops an outsized technological infrastructure breakthrough that leaves the rest of the world far behind.

But exactly this has just happened in India… and no one noticed.

India has, without question, made the largest technological breakthrough of any nation in living memory.

Its technological advancement has even left Silicon Valley standing. India has built the world’s first national digital infrastructure, leaping at least two generations of financial technologies and has built something as important as the railroad was to the UK or the interstate highways were to the US.

India is now the most attractive major investment opportunity in the world.

It’s all about something called Aadhaar and a breathtakingly ambitious plan with flawless execution.

What just blows my mind is how few people have even noticed it. To be honest, writing the article last month was the first time I learned about any of the developments. I think this is the biggest emerging market macro story in the world.

Phase 1 – The Aadhaar Act

India, pre-2009, had a massive problem for a developing economy: nearly half of its people did not have any form of identification. If you were born outside of a hospital or without any government services, which is common in India, you don’t get a birth certificate. Without a birth certificate, you can’t get the basic infrastructure of modern life: a bank account, driving license, insurance or a loan. You operate outside the official sector and the opportunities available to others are not available to you. It almost guarantees a perpetuation of poverty and it also guarantees a low tax take for India, thus it holds Indian growth back too.

Normally, a country such as India would solve this problem by making a large push to register more births or send bureaucrats into villages to issues official papers (and sadly accept bribes in return). It would have been costly, inefficient and messy. It probably would have only partially worked.

But in 2009, India did something that no one else in the world at the time had done before; they launched a project called Aadhaar which was a technological solution to the problem, creating a biometric database based on a 12-digit digital identity, authenticated by finger prints and retina scans.

Aadhaar became the largest and most successful IT project ever undertaken in the world and, as of 2016, 1.1 billion people (95% of the population) now has a digital proof of identity. To understand the scale of what India has achieved with Aadhaar you have to understand that India accounts for 17.2% of the entire world’s population!

But this biometric database was just the first phase…

Phase 2 – Banking Adoption

Once huge swathes of the population began to register on the official system, the next phase was to get them into the banking system. The Government allowed the creation of eleven Payment Banks, which can hold money but don’t do any lending. To motivate people to open accounts, it offered free life insurance with them and linked bank accounts to social welfare benefits. Within three years more than 270 million bank accounts were opened and $10bn in deposits flooded in.

People who registered under the Aadhaar Act could open a bank account just with their Aadhaar number.

Phase 3 – Building Out a Mobile Infrastructure

The Aadhaar card holds another important benefit – people can use it to instantly open a mobile phone account. I covered this in detail last month but the key takeaway is that mobile phone penetration exploded after Aadhaar and went from 40% of the population to 79% within a few years…

The next phase in the mobile phone story will be the rapid rise in smart phones, which will revolutionise everything. Currently only 28% of the population has a smart phone but growth rates are close to 70% per year.

In July 2016, the Unique Identification Authority of India (UIDAI), which administers Aadhaar, called a meeting with executives from Google, Microsoft, Samsung and Indian smartphone maker Micromax amongst others, to talk about developing Aadhaar compliant devices.

Qualcomm is working closely with government authorities to get more Aadhaar-enabled devices onto the market and working with customers – including the biggest Android manufacturers – to integrate required features, such as secure cameras and iris authentication partners.

Tim Cook, CEO of Apple, recently singled out India as a top priority for Apple.

Microsoft has also just launched a lite version of Skype designed to work on an unstable 2G connection and is integrated with the Aadhaar database, so video calling can be used for authenticated calls.

This rise in smart, Aadhaar compliant mobile phone penetration set the stage for the really clever stuff…

Phase 4 – UPI – A New Transaction System

But that is not all. In December 30th 2016, Indian launched BHIM (Bharat Interface for Money) which is a digital payments platform using UPI (Unified Payments Interface). This is another giant leap that allows non-UPI linked bank accounts into the payments system. Now payments can be made from UPI accounts to non-UPI accounts and can use QR codes for instant payments and also allows users to check bank balances.

While the world is digesting all of this, assuming that it is going to lead to an explosion in mobile phone eWallets (which is happening already), the next step is materializing. This is where the really big breakthrough lies…

Payments can now be made without using mobile phones, just using fingerprints and an Aadhaar number.

Fucking hell. That is the biggest change to any financial system in history.

What is even more remarkable is that this system works on a 2G network so it reaches even the most remote parts of India!! It will revolutionise the agricultural economy, which employs 60% of the workforce and contributes 17% of GDP. Farmers will now have access to bank accounts and credit, along with crop insurance.

But again, that is not all… India has gone one step further…

Phase 5 – India Stack – A Digital Life

In 2016, India introduced another innovation called India Stack. This is a series of secured and connected systems that allows people to store and share personal data such as addresses, bank statements, medical records, employment records and tax filings and it enables the digital signing of documents. This is all accessed, and can be shared, via Aadhaar biometric authentication.

Essentially, it is a secure Dropbox for your entire official life and creates what is known as eKYC: Electronic Know Your Customer.

Using India Stack APIs, all that is required is a fingerprint or retina scan to open a bank account, mobile phone account, brokerage account, buy a mutual fund or share medical records at any hospital or clinic in India. It also creates the opportunity instant loans and brings insurance to the masses, particularly life insurance. All of this data can also in turn be stored on India Stack to give, for example, proof of utility bill payment or life insurance coverage.

What is India Stack exactly?

India Stack is the framework that will make the new digital economy work seamlessly.

It’s a set of APIs that allows governments, businesses, startups and developers to utilise a unique digital infrastructure to solve India’s hard problems towards presence-less, paperless and cashless service delivery.

Presence-less: Retina scan and finger prints will be used to participate in any service from anywhere in the country.
Cashless: A single interface to all the country’s bank accounts and wallets.
Paperless: Digital records are available in the cloud, eliminating the need for massive amount of paper collection and storage.
Consent layer: Give secured access on demand to documents.
India Stack provides the ability to operate in real time, transactions such as lending, bank or mobile account opening that usually can take few days to complete are now instant.

As you can see, Smart phones will act as key to access the kingdom.

This is fast, secure and reliable; this is the future…

This revolutionary digital infrastructure will soon be able to process billions more transactions than bitcoin ever has. It may well be a bitcoin killer or at best provide the framework for how blockchain technology could be applied in the real world. It is too early to tell whether other countries or the private sector adopts blockchain versions of this infrastructure or abandons it altogether and follows India’s centralised version.

India Stack is the largest open API in the world and will allow for massive fintech opportunities to be built around it. India is already the third largest fintech centre but it will jump into first place in a few years. India is already organizing hackathons to develop applications for the APIs.

It has left Silicon Valley in the dust.

Phase 6 – A Cash Ban

The final stroke of genius was the cash ban, which I have also discussed at length in the past. The cash ban is the final part of the story. It simply forces everyone into the new digital economy and has the hugely beneficial side-effect of reducing everyday corruption, recapitalising the banking sector and increasing government tax take, thus allowing India to rebuild its crumbling infrastructure…

India was a cash society but once the dust settles, cash will account for less than 40% of total transactions in the next five years. It may eliminate cash altogether in the next ten years.

The cash ban digitizes India. No other economy in the world is even close to this.

Phase 7 – The Investment Opportunity

Everyone thinks they know about the Indian economy – crappy infrastructure, corruption, bureaucracy and antiquated institutions but with a massively growing middle class. Well, that is the narrative and has been for the last 15 years.

But that phase is over and no one noticed. So few people in the investment community or even Silicon Valley are even vaguely aware of what has happened in India and that has created an enormous investment opportunity.

The future for India is massive technological advancement, a higher trend rate of GDP and more tax revenues. Tax revenues will fund infrastructure – ports, roads, rail and healthcare. Technology will increase agricultural productivity, online services and manufacturing productivity.

Telecom, banking, insurance and online retailing will boom, as will the tech sector.

Nothing in India will be the same again.

FDI is already exploding and will rise massively in the years ahead as technology giants and others pour into India to take advantage of the opportunity…

***Hot off the press***

I decided to test the waters on Twitter on Sunday and Monday to find out how many non-Indians were aware of India Stack/Aadhaar. I have 24,000 followers on Twitter, many of which are you guys, and hosts of others heavily engaged in financial markets i.e. it’s a decent data sample.

In the 12 hours since the survey began, around 900 people have responded. It appears that 90% of the investment world knows absolutely nothing about the biggest IT project ever accomplished and have never even heard of it.

Now, that is an informational edge.

BACKGROUND

Raoul Pal has been publishing Global Macro Investor since January 2005 to provide original, high quality, quantifiable and easily readable research for the global macro investment community hedge funds, family offices, pension funds and sovereign wealth funds. It draws on his considerable 26 years of experience in advising hedge funds and managing a global macro hedge fund.

Global Macro Investor has one of the very best, proven track records of any newsletter in the industry, producing extremely positive returns in eight out of the last twelve years.

Raoul Pal retired from managing client money at the age of 36 in 2004 and now lives in the tiny Caribbean island of Little Cayman in the Cayman Islands.

He is also the founder of Real Vision Television, the world’s first on-demand TV channel for finance: www.realvisiontv.com

Previously he co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world.

Thousands of mall-based stores in US are shutting down in what’s fast becoming one of the biggest waves of retail closures in decades.More than 3,500 stores are expected to close in the next couple months.Department stores like JCPenney, Macy’s, Sears, and Kmart are among the many companies shutting down stores, along with middle-of-the-mall chains like Crocs, BCBG, Abercrombie & Fitch, and Guess.Some retailers are exiting the brick-and-mortar business altogether and trying to shift to an all-online model.For example, Bebe is reportedly closing all 170 of its stores to focus on growing online sales, according to a Bloomberg report . The Limited also recently shut down all 250 of its stores , while still selling merchandise online.

As stores continue to close, many shopping malls will be forced to shut down as well.When an anchor store like Sears or Macy’s closes, it often triggers a downward spiral in performance for shopping malls.

There has to be a winner in all this misery and that is JEFF BEZOS of Amazon who leapfrogged Warren buffet and spanish fashion tycoon ortega to become the second richest person in world yesterday.The Bloomberg Billionaires Index shows Bezos is now worth $75.6 billion. His worth jumped by nearly $1.5 billion dollars on Wednesday, powered by a record high for Amazon’s stock.