When Janet Yellen spoke at her regular press conference following the FOMC decision in September 2017 to begin reducing the Fed’s balance sheet, the Chairman was forced to acknowledge that while the unemployment rate was well below what the central bank’s models view as inflationary it hadn’t yet shown up in the PCE Deflator. Of course, this was nothing new [...]
Just before Christmas 2014, the Bureau of Economic Analysis upgraded Q3 2014 Real GDP to +5.0%. That represented a huge acceleration from earlier that year when during the depths of its Polar Vortex infused winter Q1 2014 GDP had contracted sharply (according to contemporary estimates). One need not be a betting man to hazard a correct guess as to which [...]
The worst aspect of this economy is by far the real effects pressed upon especially American workers. Of that there is no doubt, including young adults who would be working rather than “studying” if the economy was at all like it has been described. The second worst part is watching politicians trade their descriptions for whomever occupies the White House. [...]
Sales of existing homes soared in November 2017, according to the National Association of Realtors (NAR). Up 5.6% in just the one month, at 5.81mm (SAAR) homes sold that’s the highest pace for resales since December 2006. After several months of glaring weakness, either a delayed rebound from hurricane disrupted activity or a burst of renewed optimism has gripped the [...]
With UST yields backing up a little bit after the yield curve collapsed so far so fast, the combination of tax cut and reform “stimulus” juxtaposed with the constant, non-transitory mainstream message of recovery and growth has left us with yet another BOND ROUT!!! It has been somewhat if not completely reminiscent of earlier in 2017 when the mere promise [...]
US homebuilders haven’t been this happy since the dot-com era. Not even the housing mania of the mid-2000’s had builders feeling this good about things. According to the National Association of Homebuilders (NAHB), the trade group that represents firms in the industry, their sentiment index registered a blistering 74 in December 2017. Predictably, that’s got a lot of people excited [...]
If China wishes to ever throw off the shackles of the eurodollar system, and they do, to eventually go out on its own in an RMB dominated world there is a lot to cleanup long before that’s ever an attainable goal. To start with, we don’t know near enough about what’s going on inside that country’s financial and economic system. [...]
Why would any central bank try to disguise the fact that it is being highly accommodative in its own money markets? That would be a strange place to start, made all the more so by the further observation the same central bank is perfectly happy if you thought it was doing the opposite. Cryptic introduction aside, it is obvious I [...]
We ended last week with a clear sign that global “dollars” are in (escalating) shortage. I would write “again” with that sentence but there is every indication that said shortage never really ended. It’s not like last year’s “reflation” was a switch from insufficient supply to sufficient, rather it was a relative change to a degree that isn’t easily established [...]
The Federal Reserve’s Empire State Manufacturing Index fell slightly in its December 2017 estimate. At +18, that’s down from 19.4 in November and a high of +30.2 in October. It’s also nowhere near the low for the year, a -1.0 recorded back in May. This particular PMI is potentially noteworthy for what appears to be a replicating cycle. In a [...]
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