Great post. In computing an "excess" imbalance, IMF looks at gap btw actual CA position/GDP & a country CA norm. Norm is derived from many factors👇: demographics, institutions, desirable fiscal policy etc. One must also keep an eye on norm factors to avoid staff fiddling.

Goldman Sachs Research highlights Spain as one of Europe’s strongest large economies. Spain is expected to grow at nearly three times the euro area average, supported by stronger productivity growth, record employment, lower energy costs and improving public finances. Public debt has already fallen from around 120% of GDP at the pandemic peak to 100.7% in 2025, while Goldman expects Spain to be the only one of the EU’s four largest economies to reduce debt-to-GDP over the next three years. Spain still faces major challenges, especially unemployment, housing and poverty. But the direction is clear: stronger growth, lower energy vulnerability and improving fiscal credibility are making Spain one of Europe’s most resilient economies. goldmansachs.com/insights/ar…

Hoy sale ‘Las invasiones bárbaras’, un viaje por las crisis del siglo. Del 11-S a Irán, de las milongas de Aznar a los líos de ZP, Rajoy y Sánchez, de la UE al trumpismo. Un libro pesimista y esperanzado: “Parecía que el mundo estaba a punto de acabarse, pero no se acabó”.

HOW TO WIN A TRADE WAR is officially published in the US today!!! Last week was so incredibly amazing but also so busy @SoumayaKeynes and I had some serious Lady Gaga vibes

New @CER_EU policy brief by @SanderTordoir & @Brad_Setser Germany is ground zero of the second #Chinashock, but Berlin is not fighting back, even as the shock erodes the country’s engineering sectors that are vital to its economic security. Read here: buff.ly/2OizisL

Italy could take economic growth lessons from Spain, stats bureau says @Reuters @gavinjones10 @AlviseArmellini @AndreaRoventini reuters.com/business/italy-c…

1/ Art & the European Debt Trilemma @DeShindig and @liberioltre at @Unibocconi asked me to discuss European debt. I like @ojblanchard1 & @AngelUbide @PIIE eurobond paper & was surprised to see suggestions that it would weaken fiscal discipline. My intuition was the opposite🧵

Y añado @judith_arnal: El único bien común 🇪🇺 para el que actualmente se contempla financiación con deuda común es la defensa. Pero cuando el gobierno que con más vehemencia defiende la emisión de nueva deuda común - el de España- solicita solo 1.000 millones de euros del fondo SAFE para compras conjuntas de equipamiento militar, al otro lado de la mesa de negociación muchos se preguntan en qué se gastarían realmente esos nuevos fondos financiados con deuda común. Y la actual ingeniería contable en torno a los fondos NextGen no ayuda.

No quiero opinar sin saber qué versión es cierta. Pero la mujer del César, además de ser honesta, debe parecerlo. Y lo que está claro es que el daño reputacional ya está hecho y a España le va a costar mucho reparar su imagen, sobre todo en debates sobre la deuda europea común.

Merz sets limits on Draghi’s push for an EU revival and common debt bloomberg.com/news/articles/… via @ArneDelfs

The German media are reporting that €10bn of the recovery fund money earmarked for Spain ended up in the country’s pension system. This is how the good idea of a eurobond gets killed. Mistrust is not only present. It is justified. This example also goes to show that a eurobond can only work as a sovereign debt instrument of a unified state. If you really care about a eurobond to fortify a capital markets union and the euro as a global currency, you should talk about political union first. Don’t make this a technical discussion. eurointelligence.com

Spain’s power prices have flipped. A decade ago, Spain was a solar cautionary tale & high-cost market. Now among Europe’s cheapest. Gas decline is part of the story, but not the whole picture. More tomorrow: janrosenow.substack.com/

Some out there might think we have a safe asset called the Bunds.

NEW: @ojblanchard1 & @AngelUbide respond to feedback on their original Eurobonds proposal, clarify what they do & don't actually propose, address criticisms, & even have an FAQ. 💡A year since the proposal, the urgency for Eurobonds has grown. Read: piie.com/blogs/realtime-econ…

Non-pay walled version of my piece

My guest today is Paul Tudor Jones (@ptj_official), one of the greatest macro traders of all time. He correctly predicted the 1987 stock market crash and shorted the Japanese bubble in 1990. For over 40 years, his flagship fund has had a negative correlation to the S&P 500. 100% of his returns are alpha. He says today's market has so many similarities to 2000, "the easiest bear market I've ever seen in my whole life." He makes the case for going long dollar-yen, why Bitcoin beats gold as an inflation hedge, and why he was wrong about Warren Buffett. But what I'll remember most from this conversation is Paul's zest for life. He's 71 and still wakes at 2:30 every morning to trade the London open. He works out for two hours a day. He walks with his wife every evening. He travels the country chasing peak spring and peak fall. He's so excited about the songs picked for his funeral that he wishes he could be there to hear them. Paul has lived five lifetimes in one. He's one of the most entertaining and interesting people I've met, and the conversation will leave you searching to be as passionate about what you do as he is about what he does. Enjoy! Timestamps: 0:00 Intro 1:00 The Kindest Thing 13:19 Trading vs. Investing 17:33 Lessons from Warren Buffet 22:24 The Existential Risks of AI 29:54 The Nature of Trading 31:46 Bitcoin 35:55 Bubbles 42:08 A Day in the Life of PTJ 46:00 Information Overload 47:07 Passion for Markets 50:49 The Robin Hood Foundation 54:18 The Workless World 56:03 Journalism 1:00:00 Principal Components of a Great Life 1:05:06 Kill Them With Kindness