Essential Reading From November 25

All The Good Macro I Read In November 2025

In this note, I outline the noteworthy macro I read in November, with my summaries. The full reading list is updated regularly here.

Speech To IoD South West and the CBI, 2008 - The BoE’s Mervyn King (speech), January 2008: Interesting speech in the midst of the 2008/09 financial crisis, with the “Minsky Moment” in the rear view mirror but the full implications yet to be grapsed. There has been a realisation that credit had been too cheap, driving risk aversion and expectations of a credit contraction induced slowdown in economic activity. However, policymakers remain torn between whether to attend to weakening demand from the US (disinflationary) or supply pressures emanating from Asia (inflationary). In January 2008, Bank Rate was at 5.25%. By April 2009, Bank Rate had been reduced to 0.50% as it was clear that the demand shock was by far the bigger concern.

How Can Europe Pay for Things That It Cannot Afford? - IMF (Note), November 2025: Europe remains on an unsustainable fiscal path, with the current “muddle through” approach putting countries on risky trajectories.

Abstract: Europe is facing daunting fiscal pressures from new policy priorities (for example, defense, energy security), the escalating costs of population aging (pensions and health care), and a rising interest bill on already high debt. Without prompt policy action, public debt levels could more than double for the average European country in the next 15 years. This could drive up interest rates, slow down already sluggish economic growth, and undermine market confidence. Both structural reforms and fiscal consolidation will be necessary to deliver the difficult policy adjustment, with one-third achieved through a set of moderate reforms and two-thirds coming from consolidation. For high-debt countries, however, this policy package would likely be insufficient to meet the fiscal challenge, leaving no option other than a deeper rethink of the scope of public services and the social contract to fill the gap. Delaying policy action could be costly, as the fiscal position would deteriorate further, and make the task for policymakers even more challenging.

It will take a comprehensive policy response to keep the fiscal situation under control and avoid further damage to growth. We consider policy packages based on three pillars. First, reforms that increase the government’s ability to handle the pressures by boosting economic growth (for example, product market, labor market and governance reforms, and a deeper European Union [EU] single market), tackle some spending pressures (for example, adjusting pension systems to mitigate the cost of aging and increased longevity), and alleviate the burden falling on national budgets (for example, through increased centralization of spending at the EU level, and catalyzation of private investment). Second, medium-term fiscal consolidation measures, both on the revenue and spending sides. This could include revenue mobilization, through tax policy reform and improved revenue administration, as well as stricter spending prioritization and improvements in spending efficiency. Third, a rethink of the role of government may be unavoidable in some countries: if reforms and medium-term consolidation are insufficient, then more radical fiscal measures could include reassessing the scope of public services and other government functions, potentially affecting the social contract.

Failing to act promptly will only exacerbate the problem. The longer that reforms and consolidation are delayed, the more spending pressures will worsen the fiscal position, causing debt to accumulate faster and borrowing costs to rise. This will raise future adjustment needs and make it more likely that the market would eventually force the adjustment that could be disorderly and not reflective of public preferences.

End of The Line: how Saudi Arabia’s Neom dream unravelled - FT (article), November 2025: Neom is clearly an insane vanity project. The details continue to be stunning, and if the project continues, or at least raw materials continue to arrive, it sounds like it could strain global supply:

Size can bring advantages in construction. For The Line, it was an epic burden. Its staggering requirements for materials were enough to overwhelm both the capacity of its local infrastructure, and its pricing power.

One ex-employee who worked on the building’s construction said that to make the concrete for the first 20 modules, the contractors would need a supply of cement every year that would be greater than France’s annual output.

Each 800-metre module required, by design, about 3.5mn tonnes of structural steel, 5.5mn cubic metres of concrete and 3.5mn tonnes of reinforcement steel — the narrow steel bars twisted into cage forms to strengthen the reinforced concrete. “We were going to take something like 60 per cent of the global production of green steel [per year], which causes the price to go up,” said a senior design manager.

To clad them, they would need the equivalent of the entire yearly output of the world’s largest cladding manufacturer. Each module was worth $48bn in construction terms. “If you want to buy all the cladding in the world, the price rises,” said an architect who worked on The Line. “You were going to pay a premium for these buildings,” said a senior construction manager. “You’re taking a huge percentage of the world’s capacity.”

For all the supplies, meanwhile, there was just one small sleepy port 80km to the south of Neom, connected to the construction site by a single dual carriageway, satellite images show.

Barbarians At The Gate: A Short History of Private Equity - A Long Time In Finance (podcast), November 2025: Exploring the history of PE, noting its roots and its terrible returns (flattered by the preference for IRR presentation). Recent returns have been 1-2pp either side of public equities, with the 2 & 20 fee model driving huge fees at the same time (“as of ten year ago, one of the largest private equity investors, which is a Californian pension fund, stated in public that they estimated the average annual all in cost, including everything, was about 7% per annum”.) That means net returns have been poor.

First Principals – Dollars And Sense (Substack), October 2025: Fantastic note on what the US doesn’t understand about China, and how this has led to where we are now. I think this is really excellent, so I’m quoting from it extensively:

America is finally and begrudgingly accepting allowing China into the WTO didn’t make China any more liberal or democratic. It only made China stronger, more aggressive, more authoritarian, and far more capable of overthrowing the current global system with “changes unseen in a century.” The head scratcher is why so many politicians we choose to interact with, negotiate with, or formulate strategy vis-a-vis China know so little about China…

China intends to keep negotiating with the West. They intend to keep winning. They intend to keep decoupling on their terms and at their chosen pace and winning whatever bonuses they can negotiate away. The best time for the US to decouple was twenty years ago. The second best time is today, but our leaders lacked and continue to lack the foresight and the will…

Remember these two core principles when evaluating US-China relations:

1) [The US] economic system is superior. The Chinese, thanks to Deng, recognized and accepted this and partially adapted, though their economy retains multiple fundamental flaws.

2) The Chinese are superior negotiators. The American side, somehow, still fails to recognize this. It doesn’t matter, Democrats or Republicans, every four years China out negotiates the US.

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This newsletter is for informational purposes only. It does not constitute investment advice or an offer to invest. The views expressed herein are the opinions of JB Macro exclusively. Readers should conduct their own research and consult with professional advisors before making any investment decisions.