The Great "Recession" was never a recession. It was a monetary event first and foremost, and it continues to be eleven years later. That means by and large it has been a failure of imagination. Central bankers say they've done this and that, but what they've never done, apart from actually succeed, is examine the way money actually works in [...]
This year is just different. Increasingly so. Not just in one or two places, either, but in way too many places. In Japan, for instance, real Household Spending rose by the smallest amount in July, according to the latest estimates from Statistics Japan. In 2017, this would have been a worrisome sign. In 2018, it counts as one of the [...]
The ritual of Payroll Friday is not strictly a sorry American phenomenon. It is one shared by our neighbors to the north. The Canadian version, thanks to M. Simmons filling in the gaps of my limited experience with it, doesn’t typically sink into the depths of silliness to which its US cousin explores. At least not in as many months. [...]
Payroll Friday continues to be among the more absurd rituals of the finance industry. That’s saying something because in this business there are many that in any other context would be laughed out of the discipline. Never mind the impropriety of attempting to use a single monthly yardstick for economic progress, over the last four years the payroll report has [...]
Liquidity preferences are one of the least discussed economic concepts. There are several channels into which monetary instability can hamper the real economy. A “dollar” squeeze doesn’t just impact banks, they often pass it along further down the economic chain. In its most extreme form, we had something like 2009. Some of the best companies all over the world found [...]
One year ago today, something broke. It wasn't a big thing, practically a footnote seemingly not worth mainstream attention. Out of nowhere, the 4-week T-bill yield spiked. On Friday, September 1, 2017, the equivalent interest rate for the instrument was steady at 96 bps. That was already a problem because the Federal Reserve’s RRP was at the time set for [...]
You get the impression often that these guys have no idea what drives the dollar. They cling to all sorts of theories, of course, from interest rate differentials to perceptions of economic strength. That seemed to be the case in 2017 and its “weak dollar” environment. Globally synchronized growth would mean potency pretty much everywhere, thus, in this view, a [...]
On November 7, 1973, President Richard Nixon addressed the nation via a broadcast television appearance. The topic wasn’t what you might think. Rather than trying to reassure Americans about the unfolding Watergate scandal, Nixon instead attempted to encourage the country about its energy situation. The month before, Egypt and Syria had launched a surprise attack against Israel. Arab members of [...]
These things are processes. They take time, a lot of time. Given that, I keep coming back to what might otherwise seem an absurd idea. The best-case scenario for all of us just might be a global crash, one that would make 2008 blush. At least then it might afford the world the benefit of unambiguousness. We almost got there [...]
Private US businesses are not building new facilities, or renovating old ones, at a rate that suggests the economy is doing well. Let alone booming. For more than two years now, the aggregate level of Private Non-residential Construction Spending has been flat. According to the Census Bureau in figures released today, construction capex in July 2018 (seasonally adjusted) was less [...]
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