Global Trade: Fading To Black

26-Oct (TalkMarkets) — Rarely does an idiom manifest itself in as many mediums as does the seemingly ubiquitous “Fade to Black.”

Spreading far from its beginnings as the director’s call to slowly dim the lights, end the scene and fade away, it runs the gamut from dark beer, to mystery novels to documentaries, from slasher films, to music, lots and lots of music. And, with the music there can be darkness, perhaps even the darkness of suicide. Dire Straits’s self-titled cut is a bitter rebuke to a wicked woman with black widow tendencies. Tommy Cash chose the idiom but not the darkness in his 2008 album, “Fade to Black: Memories of Johnny,” a tribute to his older brother, “The Man in Black.”

Urban lore consigns to Metallica, the thrash metal band formed in 1981 Los Angeles, the honor of bringing the most darkness and crossing the boundaries of metaphorical meaning in its version of “Fade to Black.” Have a listen: “I have lost the will to live, Simply nothing more to give, There is nothing more for me, Need the end to set me free.” Now, you may think there’s no gray area in those words, but you would be wrong. Rather than suicidal tendencies, the song was written by James Hetfield, the group’s lead singer, after the band’s van was broken into leaving him robbed of his favorite Marshall Amp. Call that a really bad day for the lead of one of the 80’s “big four” thrash metal bands.

And for us, is there a fading to black that could bring us a really bad day? Miles of airwaves have been devoted to the vulnerable state of an enormous economic engine. Will the backlash against globalization and the rise of protectionism herald the death of global trade as we’ve known it for most of our adult lives? Late last month, the World Trade Organization (WTO) dramatically decreased its forecast for the growth in the trades of goods in 2016 to 1.7 percent from 2.8 percent. The implication was that trade would grow at a slower pace than global gross domestic product for the first time in 15 years. The outlook beyond year end is no more uplifting. The WTO lowered its 2017 forecast to between 1.8 percent and 3.1 percent from a previous 3.6 percent.

PG View: This is a terrible harbinger for the global economy; suggesting that the über-accommodative policy stances of world central banks is likely here to stay.