Globalization fragmenting into rival operating systems
The post-Cold War assumption was that trade integration and technological diffusion would produce convergence under a stable ruleset. The actual path looks roug
Updated today.
Trade
Monthly goods trade deficit — widening deficits signal import dependence; narrowing may reflect reshoring or trade barriers.
$-88.6B
Trend YoY growth is -4.7%, accelerating by 9 bps/year over the last 25Y. Latest: -18.0%, 13.3 pp below trend, a 0.39σ deviation. The latest YoY reading is depressed by 7.3 pp due to an tough comparison base from Jul '25. At current levels, YoY would fall to -137.0% by Sep '26 as comparisons tighten.
Level
YoY %
y = −7.0% + 9 bps/yr · t
Deviation from trend
Total quarterly export volume — tracks whether the U.S. is gaining or losing share in a fragmenting trade system.
$3.8T
Trend YoY growth is +5.3%, accelerating by 1 bps/year over the last 25Y. Latest: +14.8%, 9.6 pp above trend, a 0.98σ deviation. The latest YoY reading is boosted by 2.9 pp due to an easy comparison base from Apr '25. At current levels, YoY would fall to +12.0% by Sep '26 as comparisons tighten.
Level
YoY %
y = 5.0% + 1 bps/yr · t
Deviation from trend
Proxy for China's tech sector accessibility — decoupling shows up as valuation divergence from U.S. tech.
$25.2
Trend YoY growth is -2.7%, slowing by 1.8 pp/year over the last 9Y. Deviations have remained below trend for 105 consecutive periods. Latest: -35.5%, 32.8 pp below trend, a 3.2σ deviation. The latest YoY reading is depressed by 58.4 pp due to an tough comparison base from Sep '25.
Level
YoY %
y = 13.3% − 1.8 pp/yr · t
Deviation from trend
Strategic Buildup
Market pricing of defense spending — rising valuations reflect expectations of sustained military buildup across blocs.
$216.1
Trend YoY growth is +26.1%, accelerating by 2.2 pp/year over the last 9Y. Deviations have remained below trend for 22 consecutive periods. Latest: +6.1%, 20.1 pp below trend, a 1.7σ deviation. The latest YoY reading is depressed by 14.1 pp due to an tough comparison base from Sep '25.
Level
YoY %
y = 6.0% + 2.2 pp/yr · t
Deviation from trend
No data
Broad EM equity basket — underperformance vs. U.S. signals capital retreating from fragmentation-exposed economies.
$68.8
Trend YoY growth is +16.7%, accelerating by 1.7 pp/year over the last 9Y. Deviations have remained above trend for 236 consecutive periods. Latest: +31.7%, 15.1 pp above trend, a 2.2σ deviation. The latest YoY reading is depressed by 9.2 pp due to an tough comparison base from Sep '25.
Level
YoY %
y = 1.5% + 1.7 pp/yr · t
Deviation from trend
Industrial Competition
Domestic industrial companies — outperformance signals reshoring and industrial policy tailwinds.
$170.0
Trend YoY growth is +20.2%, accelerating by 1.3 pp/year over the last 9Y. Deviations have remained below trend for 21 consecutive periods. Latest: +12.4%, 7.8 pp below trend, a 1.4σ deviation. The latest YoY reading is boosted by 2.6 pp due to an easy comparison base from Sep '25.
Level
YoY %
y = 8.3% + 1.3 pp/yr · t
Deviation from trend
New orders for long-lived manufactured goods — leading indicator of industrial investment and reshoring activity.
$339.4B
Trend YoY growth is +5.5%, accelerating by 22 bps/year over the last 25Y. Latest: +12.0%, 6.5 pp above trend, a 0.88σ deviation. The latest YoY reading is boosted by 2.0 pp due to an easy comparison base from Jul '25. At current levels, YoY would fall to +10.3% by Sep '26 as comparisons tighten.
Level
YoY %
y = −0.0% + 22 bps/yr · t
Deviation from trend
Dollar System
The world's reserve currency — sustained weakness may signal erosion of dollar hegemony in a multipolar order.
100.5Index
Trend YoY growth is +0.4%, accelerating by 1 bps/year over the last 9Y. Deviations have remained above trend for 22 consecutive periods. Latest: +3.3%, 2.9 pp above trend, a 1.5σ deviation. The latest YoY reading is boosted by 3.9 pp due to an easy comparison base from Sep '25.
Level
YoY %
y = 0.3% + 1 bps/yr · t
Deviation from trend
Foreign central bank appetite for Treasuries — declining share suggests dedollarization or reserve diversification.
$9.3T
Trend YoY growth is +3.1%, slowing by 51 bps/year over the last 25Y. Deviations have remained above trend for 9 consecutive periods. Latest: +7.6%, 4.5 pp above trend, a 0.68σ deviation. The latest YoY reading is depressed by 5.0 pp due to an tough comparison base from Oct '24.
Level
YoY %
y = 15.8% − 51 bps/yr · t
Deviation from trend
EAFE equity performance — tracks whether capital is concentrating in the U.S. or redistributing across blocs.
$106.1
Trend YoY growth is +16.3%, accelerating by 1.5 pp/year over the last 9Y. Deviations have remained above trend for 245 consecutive periods. Latest: +17.6%, 1.3 pp above trend, a 0.39σ deviation. The latest YoY reading is depressed by 1.6 pp due to an tough comparison base from Sep '25.
Level
YoY %
y = 3.1% + 1.5 pp/yr · t
Deviation from trend
Key Insight
Fragmentation is now more visible in strategic-asset prices than in the underlying trade flows, and that inversion is the signal — capital markets are pricing the new bloc architecture faster than goods markets are re-routing through it.
Globalization fragmenting into rival operating systems
The post-Cold War assumption was that trade integration and technological diffusion would produce convergence under a stable ruleset. The actual path looks roug
Updated today.
Trade
Monthly goods trade deficit — widening deficits signal import dependence; narrowing may reflect reshoring or trade barriers.
$-88.6B
Trend YoY growth is -4.7%, accelerating by 9 bps/year over the last 25Y. Latest: -18.0%, 13.3 pp below trend, a 0.39σ deviation. The latest YoY reading is depressed by 7.3 pp due to an tough comparison base from Jul '25. At current levels, YoY would fall to -137.0% by Sep '26 as comparisons tighten.
Level
YoY %
y = −7.0% + 9 bps/yr · t
Deviation from trend
Total quarterly export volume — tracks whether the U.S. is gaining or losing share in a fragmenting trade system.
$3.8T
Trend YoY growth is +5.3%, accelerating by 1 bps/year over the last 25Y. Latest: +14.8%, 9.6 pp above trend, a 0.98σ deviation. The latest YoY reading is boosted by 2.9 pp due to an easy comparison base from Apr '25. At current levels, YoY would fall to +12.0% by Sep '26 as comparisons tighten.
Level
YoY %
y = 5.0% + 1 bps/yr · t
Deviation from trend
Proxy for China's tech sector accessibility — decoupling shows up as valuation divergence from U.S. tech.
$25.2
Trend YoY growth is -2.7%, slowing by 1.8 pp/year over the last 9Y. Deviations have remained below trend for 105 consecutive periods. Latest: -35.5%, 32.8 pp below trend, a 3.2σ deviation. The latest YoY reading is depressed by 58.4 pp due to an tough comparison base from Sep '25.
Level
YoY %
y = 13.3% − 1.8 pp/yr · t
Deviation from trend
Strategic Buildup
Market pricing of defense spending — rising valuations reflect expectations of sustained military buildup across blocs.
$216.1
Trend YoY growth is +26.1%, accelerating by 2.2 pp/year over the last 9Y. Deviations have remained below trend for 22 consecutive periods. Latest: +6.1%, 20.1 pp below trend, a 1.7σ deviation. The latest YoY reading is depressed by 14.1 pp due to an tough comparison base from Sep '25.
Level
YoY %
y = 6.0% + 2.2 pp/yr · t
Deviation from trend
No data
Broad EM equity basket — underperformance vs. U.S. signals capital retreating from fragmentation-exposed economies.
$68.8
Trend YoY growth is +16.7%, accelerating by 1.7 pp/year over the last 9Y. Deviations have remained above trend for 236 consecutive periods. Latest: +31.7%, 15.1 pp above trend, a 2.2σ deviation. The latest YoY reading is depressed by 9.2 pp due to an tough comparison base from Sep '25.
Level
YoY %
y = 1.5% + 1.7 pp/yr · t
Deviation from trend
Industrial Competition
Domestic industrial companies — outperformance signals reshoring and industrial policy tailwinds.
$170.0
Trend YoY growth is +20.2%, accelerating by 1.3 pp/year over the last 9Y. Deviations have remained below trend for 21 consecutive periods. Latest: +12.4%, 7.8 pp below trend, a 1.4σ deviation. The latest YoY reading is boosted by 2.6 pp due to an easy comparison base from Sep '25.
Level
YoY %
y = 8.3% + 1.3 pp/yr · t
Deviation from trend
New orders for long-lived manufactured goods — leading indicator of industrial investment and reshoring activity.
$339.4B
Trend YoY growth is +5.5%, accelerating by 22 bps/year over the last 25Y. Latest: +12.0%, 6.5 pp above trend, a 0.88σ deviation. The latest YoY reading is boosted by 2.0 pp due to an easy comparison base from Jul '25. At current levels, YoY would fall to +10.3% by Sep '26 as comparisons tighten.
Level
YoY %
y = −0.0% + 22 bps/yr · t
Deviation from trend
Dollar System
The world's reserve currency — sustained weakness may signal erosion of dollar hegemony in a multipolar order.
100.5Index
Trend YoY growth is +0.4%, accelerating by 1 bps/year over the last 9Y. Deviations have remained above trend for 22 consecutive periods. Latest: +3.3%, 2.9 pp above trend, a 1.5σ deviation. The latest YoY reading is boosted by 3.9 pp due to an easy comparison base from Sep '25.
Level
YoY %
y = 0.3% + 1 bps/yr · t
Deviation from trend
Foreign central bank appetite for Treasuries — declining share suggests dedollarization or reserve diversification.
$9.3T
Trend YoY growth is +3.1%, slowing by 51 bps/year over the last 25Y. Deviations have remained above trend for 9 consecutive periods. Latest: +7.6%, 4.5 pp above trend, a 0.68σ deviation. The latest YoY reading is depressed by 5.0 pp due to an tough comparison base from Oct '24.
Level
YoY %
y = 15.8% − 51 bps/yr · t
Deviation from trend
EAFE equity performance — tracks whether capital is concentrating in the U.S. or redistributing across blocs.
$106.1
Trend YoY growth is +16.3%, accelerating by 1.5 pp/year over the last 9Y. Deviations have remained above trend for 245 consecutive periods. Latest: +17.6%, 1.3 pp above trend, a 0.39σ deviation. The latest YoY reading is depressed by 1.6 pp due to an tough comparison base from Sep '25.
Level
YoY %
y = 3.1% + 1.5 pp/yr · t
Deviation from trend