For Ben Bernanke, characterizing a successful tenure is exceedingly hard. Afterward writing a memoir about his time at the Fed, however, made such a task a necessary one. Given so few options from which to define his legacy, the former Chairman decided very carefully about how to frame his efforts. And still all he could come up with was a [...]
If you are an enterprising financial firm with spare cash toward the end of the business day, you have several options for it. Primary among them is the Fed’s Reverse Repo (RRP) desk which will pay you 50 bps interest with your cash secured by both the reputation of the Federal Reserve as well as UST collateral. Given that option, [...]
Nowhere is the “dollar’s” effects more damaging than in any real economy dependent upon it. It is quite fitting that on a day when the PBOC surprises with a desperate move to reduce the RRR for big banks, who have already been for some time the outlet for massive RMB liquidity, Chinese officials release economic statistics that show little or [...]
The amount of liquidity being added to the big Chinese banks has been astounding. The vast majority of it is coming from the PBOC itself. In July 2015, just before everything broke, PBOC funding of the Big 4 State-Owned Banks was less than RMB 100 billion. As of the latest figures for December 2016, it was RMB 1.17 trillion. In [...]
Industrial production rose year-over-year in December 2016, the first plus sign in more than a year. For the month, IP was up 0.5% from the same month in 2015, following declines of 0.7% in each of the prior two months. In seasonally-adjusted, month-over-month terms, IP increased by 0.8% in December after being essentially flat for four months before. Under normal [...]
It may sound overly basic, but the times being what they are there is a very well deserved need to be elementary about certain things again. That starts with banks and really defining what is and is not one. When money was money, banking was a very simple procedure, though not quite so stylized and rudimentary as it is often [...]
November was the month where global bonds, particularly sovereign bonds, were routed in synchronized liquidation. As such, we would expect to find among various data sources evidence to suggest a monetary “dollar” background consistent with that fact. What that has meant in the months (and last several years) leading up to it was the foreign official sector in overdrive “selling [...]
For the first time since 2014, the CPI was above 2% in December. Unlike the PCE Deflator, the CPI has been above 2% on other occasions after the 2012 slowdown, notably in mid-2014 when policymakers were making the same extrapolations as to its meaning. The inflation index had been as high as 2.13% in May 2014, before the economy of [...]
Earned income rates adjusted for inflation have been near zero growth for two months in a row. Real average weekly earnings were revised significantly lower in November 2016, turning a small 0.5% gain into just 0.2%. The latest figures for December estimate the same lack of growth to end the year. In seasonally-adjusted terms, weekly earnings did not keep pace [...]
Let the fussin’ and cussin’ begin. You’re about to embark on the annual pilgrimage to income tax purgatory and will spend several weeks gathering proof of your deductions. In that process, remember the words of a wise tax sage, “Loopholes aren’t illegal. Anything in the IRS code is there to use.” In other words, don’t give more to the government [...]
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