Deer Point Macro (@deerpointmacro) / X

Deer Point Macro

15.2K posts

Deer Point Macro

@deerpointmacro

Macroeconomics, emerging and developed markets, FX, covered interest rate parity, and cross-currency basis swaps.

United States

Joined August 2019

Deer Point Macro
@deerpointmacro
Jul 30, 2022
Liquidity is starting to deteriorate, and a great insight into this is the Repo market. Failures to deliver (Bonds used as collateral in Repurchase agreements) have been elevated and are up 22% on a WoW basis. This is a sign of liquidity event brewing.
Deer Point Macro
@deerpointmacro
Apr 5, 2024
Canadas rapid decline in productivity has been face ripping. In the early 80s Canada was 5th in output per hour against its OECD counterparts. Today Canada is 27th out of 32. Output per hour has deteriorated rapidly. When you favor housing over real economic assets this is
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Deer Point Macro
@deerpointmacro
Apr 16, 2024
Increase in taxes on capital gains for the wealthiest .13 per cent. This seems like the wrong policy decision. This can create what in economics jargon is known as lock in effects. Where assets are held, and capital is constrained from flowing to places with higher ROI and
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Deer Point Macro
@deerpointmacro
May 24, 2021
Housing prices to disposable income ratio has completely diverged. There is now no way a future income can justify these fundamentals until there is some return to the mean. The fact 90+% of Canadian net worth is tied to RE is worrying. Remember increase in cost reduces liquidity
Deer Point Macro
@deerpointmacro
Jun 30, 2023
Canada can now only generated .32 cents of GDP for everyone 1 dollar of debt. Let that sink in, the decline comes from how rapid Canada has expanding financialization relative to productive parts of the economy.
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Deer Point Macro
@deerpointmacro
May 29, 2021
Canada is the only country in the G7 where R&D as a % of GDP has been on the decline over the passed 10 years. Canada has a massive innovation hole. This leads to a decrease in business investment
Deer Point Macro
@deerpointmacro
Feb 7, 2022
Canada still the most indebted household sector in the G7. Most of this high indebtedness to no surprise comes on the back of mortgage debt. None of this debt is productive, or can lead to sustained economic growth.
Deer Point Macro
@deerpointmacro
Oct 13, 2022
Swiss National Bank access largest dollar swap of 6.27B in the history of the data set. This comes on the back of massive widening within the CHF-USD cross-currency basis swap. IMO Dollar shortage + counterparty risk has locked the swiss out of the wholesale $ funding mrkt.
Deer Point Macro
@deerpointmacro
Jan 20, 2024
Canada Economic History: In the 90s John Crow (BoC) took the interest rate up to 13% to fight inflation. At that time roughly 12 cents of every after tax dollar was going to service debt. When this happened it took Canada into a deep recession. Today: Interest rates are 5%, and
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Deer Point Macro
@deerpointmacro
Apr 1, 2024
Canada problem in a nut shell can be explained by the capital/output ratio. Canada now has to invest almost 37% of GDP to generate a single % of GDP. This is a large function of inefficiency. 5x higher to maintain same economic growth rate (from the late 70s), and 2x to maintain
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Deer Point Macro
@deerpointmacro
Dec 18, 2022
Canada interest rate futures continue to price downwards, showing essentially rates have peaked, and cuts should begin close to Q1 of next year.
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Deer Point Macro
@deerpointmacro
Mar 3, 2025
This is a nothing burger: The problem is how Atlanta Fed is arriving at this estimate. An increase in M raises C (consumption) or I (investment). Inventories are being accumulated (tariff front running), at least according to expectations, which is part of investment. However,
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Deer Point Macro
@deerpointmacro
Jun 12, 2022
We get an inflation reading of 8.6% and BTC sells off… that makes it a true inflation hedge, and few understand this.
Deer Point Macro
@deerpointmacro
Feb 2, 2025
New Substack on Tariffs just dropped.
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