A deep dive -- a really deep dive some might say -- into the IMF's new External Sector Report. It is a step in the right direction, but the IMF is still understating the scale of global trade imbalances and the scale of China's surplus. 1/

Great chart.

There's been a lot of Schadenfreude out of Europe about a supposed capital flows exodus from the US. Here's the thing. There is no exodus. May saw the biggest inflow in foreign portfolio flows into the US ever. Markets really don't think the US "exceptionalism" story is over...

When times are good and global risk appetite is healthy, foreign investors pile into the US (blue) and US residents send money abroad (red). That's exactly what happened in May after "Liberation Day" turbulence in April. Markets have a short memory. They forgive and forget...

After foreign investors pulled money out of the US in April (after "Liberation Day" chaos), long-term portfolio inflows recorded their strongest showing EVER in May. There never was a threat to US reserve currency status and the Dollar is on a rising - NOT falling - trajectory...

Fair, but couldn’t this be US importers using transshipment to circumvent tariffs on China? These countries, even EU members, still face lower effective tariffs than China, so it would make sense...

If China's exports show a sharp rise to one country, that could be for idiosyncratic reasons. But if China's exports rise to all kinds of places right after the imposition of big US tariffs, that's a sign China is scrambling to find new export markets. That's what's happening...

Si sumamos está dinámica global deflacionaria de los bienes chinos en el contexto de guerra comercial de 🇺🇸al contexto de apreciación cambiaria y de eliminación de barreras comerciales en Argentina,es de esperarse un fuerte aumento de importaciones desde China en el H2 del 2025

I’ll be doing a live stream with @tashecon on Russia sanctions this Friday (Jul 25) at 8 am (ET). Tim coined the term “Fortress Russia” many years ago. We’ll see if he still thinks it’s still a fortress. Photo is from a summit in Uludag in Turkey in 2019.

last week the EU sanctioned 105 tankers to bring the total sanctioned to 440-plus. Today the UK added another 135 ships to its list, as well as the UAE-based subsidiary of Litasco, linked to Lukoil, one of the major oil exporters in Russia and Intershipping Services (the flag registry for Gabon, and Comoros). The Comoros flag registry arrangements aren't particularly transparent. there seem to be deputy maritime commissioners appointed for the Union of Comoros elsewhere besides India (which is where Intershipping Services is basing its Comoros operations). The alignment of the EU and UK only serves to highlight sanctions divergence with the US, which last took major action against Russia in January, under the Biden administration. Very interesting to see Lukoil targeted on top of Coral Energy. the bifurcation of a once-global oil market continues.