Because the prevailing theory behind the global slowdown is “trade wars”, most if not all attention is focused on China. While the correct target, everyone is coming it at from the wrong direction. The world awaits a crash in Chinese exports engineered by US tariffs. It’s not happening, at least according to China’s official statistics. The reported numbers aren’t good [...]
The key has always been the first part of the word rather than the more common focus on the second. A eurodollar is more about the “euro” than the more obvious monetary denomination. Since it began decades before Europe created its common currency, the eurodollar has nothing whatsoever to do with the euro. But those four letters mean absolutely everything. [...]
The year 2015 started out very rough. While the mainstream tried very hard to make the oil crash into a supply glut and Janet Yellen kept referring to the “best jobs market in decades” as if it that specific combination of words was some sort of incantation, the early months of that year represented a serious stumble. But almost as [...]
After constantly running through what the FOMC gets (very) wrong, let’s give them some credit for what they got right. Though this will end up as a backhanded compliment, still. After having spent all of 2018 forecasting accelerating inflation indices, from around New Year’s Day forward policymakers notably changed their tune. Inflation pressures that were in December 2018 building underneath [...]
There is no doubt that US tariffs on Chinese goods have negatively impacted US imports of Chinese goods. According to this week’s updated estimates from the Census Bureau, imports from China were down 13.9% in August 2019 compared to August 2018. That was the fourth straight month of double-digit year-over-year declines, and six of the last seven months that bad. [...]
There will be more opportunities ahead to talk about the not-QE, non-LSAP which as of today still doesn’t have a catchy title. In other words, don’t call it a QE because a QE is an LSAP not an SSAP. The former is a large scale asset purchase plan intended on stimulating the financial system therefore economy. That’s what it intends [...]
I’ve said all along that they would be dragged into them kicking and screaming. After all, the Federal Reserve undertook its last rate hike in December 2018 – just as the markets were making clear he was completely mistaken in his view of the economy. What followed was the ridiculous “Fed pause” which pretty much everyone outside of the central [...]
One year ago, last October, the IMF published the update to its World Economic Outlook (WEO) for 2018. Like many, the organization began to talk more about trade wars and protectionism. It had become a topic of conversation more than concern. Couched as only downside risks, the IMF still didn’t think the fuss would amount to all that much. Especially [...]
They remain just as confused as Richard Fisher once was. Back in ’13 while QE3 was still relatively young and QE4 (yes, there were four) practically brand new, the former President of the Dallas Fed worried all those bank reserves had amounted to nothing more than a monetary head fake. In 2011, Ben Bernanke had admitted basically the same thing. [...]
Europe’s QE, as noted this weekend, is off to a very rough start. In the bond market and in inflation expectations, the much-ballyhooed relaunch of “accommodation” is conspicuously absent. There was a minor back up in yields between when the ECB signaled its intentions back in August and the few weeks immediately following the actual announcement. Other than that, and [...]
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