Macro Peek

“The number of Chinese online was already huge, and it’s soared over the past year by more than 50 million thanks to an upsurge in mobile Internet access.”  CNET  “…800 million to 1 billion new consumers around the world will enter the middle class this decade…”  Peter Pham.

“Cash Flow per shares over the past 5 and 10 years has grown at the rate of 5.5% per year and 24.2% per year, respectively. Book Value per share is up nicely over the past 5 and 10 years with growth at 15% and 16% per year, respectively.”  SP Brunner

Increasing the inflation target could lead to a super-boom in hard assets while bonds would get crushed.  WSJ

The credit bubble may have begun a blow-off top.  Leadership has narrowed to US Treasury’s and German Bunds, and investment grade corporates (Bespoke).  The Swiss 5-year has gone negative (Sober Look).  Meanwhile, spreads are rising (Bespoke).  Note “bond prices in free fall” at Reuters.

The financial crisis was entered with government and corporate balance sheets in good shape, while the consumer was a wreck.  The next crisis will occur with business and the improved consumer (Housing Views) much better off than governments.

Highlights of Ray Dalio’s Q2 Bridgewater letter:  Business Insider.  Essential facts about the Federal budget:  WSJ.  Richard Russell bullish on housing at Financial Sense.  Chart-fest by Peter Brandt.