“…don’t speak too soon for the wheel’s still in spin, and there’s no telling who that it’s naming. For the loser now will be later to win, cause the times they are a-changing” Bob Dylan (Lyrics) As November 8th approaches, our newly minted Noble Prize winner, Bob Dylan’s song, “The Times They are A-Changin” is right on the money. At [...]
As with last month, I delayed this update a few days to see if we might gain some clarity that would warrant some change in our allocation. Alas, no such clarity has emerged and so, as it has been since August, the risk budget remains unchanged this month. Indeed, as last month, the entire portfolio is unchanged. For the moderate [...]
Where do we go from here? If the monetary system is broken, how do we fix it so that the global economy can be mercifully released from the “dollar’s” gripping vise? The short answer is that it is too complicated to contemplate in this setting. A better answer is that I don’t know because there is a great deal that [...]
The ultimate lesson for learning not to rely on one quarter of GDP growth was actually two quarters. In the middle of 2014, GDP posted back-to-back gains that at the time seemed nothing less than fantastic. Even with residual seasonality revisions and new benchmarks, those two quarters remain prominent landmarks in an otherwise bleak landscape. And that is the whole [...]
Last year, the usual rebound in GDP was flipped. Q1’s are, or were before “residual seasonality”, the low mark followed by some surge at some point. In 2015, it was Q2 that originally jumped, hitting almost 4% in the original estimates. What followed in Q3 was frustration, as GDP was first figured to be only 1.5%. It was disappointing but [...]
Durable goods continue to show that there is no difference between the economy of 2015 and the one being described by these numbers in 2016. To the “transitory” narrative, it is the death blow, which is why so many central banks and central bankers are busy exploring other options (while as quietly as they can writing down the future economy). [...]
There is a growing body of public work that suggests Federal Reserve officials are prepared now for a very different sort of normalization than what had been envisioned up until this year. That comes, as noted earlier, with the realization that the economy is not just in rough shape but likely to remain that way for the foreseeable future. The [...]
It has been my contention for some long while that one of the biggest parts of this “rising dollar”, that is, again, nothing more than a euphemism for the various ways in which there is a “dollar” shortage, is balance sheet math. The problem in as simple terms as perhaps possible is that positions were taken, balance sheets constructed, and [...]
It is a long road to recovery, an actual one, if we are to be left to the pace of economists struggling to make sense of the analog world. They are truly digital creatures, who would look at information and make no judgment until the models tell them what to think. You or I would find troubling data and seek [...]
In early July, the Bank of Japan may or may not have contemplated the mother of all “stimulus.” Rumors began to fly that the Japanese central bank was, in fact, seriously considering an actual monetary helicopter as a way to boost flagging confidence rightly suspicious of any more QQE (or NIRP). We won’t know for some time (when the meeting [...]
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