Point being that the China shock has reduced Europe's non pharma (ex Ireland) surplus &Germany's fiscal shift is already poised to support a reduction in Europe's surplus. Imbalances really reduce to China (plus Korea and Taiwan) on one side and the US/UK on the other 7/7
Original source ↗  |  February 12, 2026 at 20:27 UTC  |  Twitter - @brad_setser

IDEA 1 TICKER: SPY (or S&P 500 index) DIRECTION: short THESIS: Historical patterns suggest a significant market drawdown (average 34%) after 115 S&P 500 stocks decline 7%+ in 8 sessions, despite the index being only 1.5% below its all-time high. SPEAKER: @michaelbatnick TIMEFRAME: medium-term

IDEA 2 TICKER: CNY, KPW, TWD (or related FX pairs/ETFs) DIRECTION: short THESIS: Despite China's massive and growing trade surplus, the yuan and other major Asian surplus country currencies show persistent weakness in broad real terms, suggesting a continued

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