The IMF becomes the latest mainstream organization to abandon the recovery. It wasn’t really much of one to begin with, mostly just the hope that an uptick in growth would lead to the long sought, and necessary, completion. Globally synchronized growth in 2017 was supposed to mean a plausible pathway toward it. The IMF’s World Economic Outlook (WEO) said in [...]
It’s the forward-looking indicators right now that look the worst. This is why we think Euro$ #4 is still closer to its beginning than its end. Even though it may be entering its fifth quarter of existence here in Q2 2019, these things are long processes that take a lot of time to fully play out. Euro$ #3, for example, [...]
Japan is the very model of fiscal irresponsibility. If ever there was a bond vigilante, surely they would have a Japanese address. At the end of what was the Bank of Japan’s 133rd fiscal year, on March 31, 2018, Japan’s central bank reported total assets of ¥528,285,679,854,140. Of which, ¥448,326,107,324,120 was Japanese government bonds (JGB). Officials became increasingly confident these [...]
It isn’t just US or European banks which are shrinking. The nature of this post-August 9, 2007, world is just that – global. Sure, there are regulations which have made investment banking more expensive. But there isn’t a rule or law that Wall Street (really Lombard Street) wouldn’t “discover” a way to circumvent it if they all thought it was [...]
Critics of government debt, a group which really should include every taxpayer, like to point out how governments prefer to pay back that debt with hugely inflated currency. You don’t pay it off so much as inflate it away. Change the convertibility number for your local currency and, voila, a much more manageable credit profile emerges. Only, there are often [...]
Milton Friedman was right about a lot of things. He was wrong about quite a bit, too. The stuff where he erred is what central banks now do in his name. The activist central bank is an outgrowth of monetarism, the academic approach to rethinking the Great Depression after Friedman and Anna Schwartz published A Monetary History. Toward the end [...]
The Reserve Bank of India (RBI) cut its benchmark money rate for the second straight meeting. Reducing its repo rate by 25 bps, down to 6%, the central bank once gripped by political turmoil has certainly shifted gears. Former Governor Urjit Patel was essentially removed (he resigned) in December after feuding with the federal government over his perceived hawkish stance. [...]
On August 12, 1985, Japan Airways flight 123 left Tokyo’s Haneda Airport on its way to a scheduled arrival in Osaka. Twelve minutes into the flight, the aircraft, a Boeing 747, suffered catastrophic failure when an aft pressure bulkhead burst. The airplane had been improperly repaired from a tailstrike (the tail of the aircraft actually hitting the runway pavement) seven [...]
Those were the days. The minivan was king, a relatively new phenomenon that domestic automakers were hoping would help them stave off increasing import pressure. In 1990, Chrysler, for example, had used the success of its Dodge Caravan and Plymouth Voyager, along with the introduction of its Town & Country luxury (I suppose) model, to maintain its number three spot [...]
Over the last several years, we’ve been bombarded with mainstream stories about how interest rates have nowhere to go but up. Inflation, recovery, and most of all fundamentals. Who in their right mind is going to buy all this government debt! The supply is rising and, according to these people, the demand can only be falling. There is nothing in [...]
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