Housing construction continues to lag in 2017. Total permits in July fell on a seasonally-adjusted basis to 1.22 million. While not a huge decline, it continues to undershoot the post-taper trend that began in 2013 (after the mini-bubble wave crested from the trough of the housing bust). The break in that trend dates, unsurprisingly, to late 2015 and the near-recession [...]
The markets actually turned before the Fed minutes were released, but once in the public (assuming they weren’t leaked again) the anti-“reflation” direction was amplified. Bonds have rallied as have eurodollar futures (near Friday’s recent high), JPY dropped (so you know gold was up, too), and even stocks shifted. As usual, it is being characterized as a “dovish” statement which [...]
Last week the Commerce Department reported wholesale sales in June 2017 had risen by 5.6% year-over-year (unadjusted). Having increased by nearly 10% in May, and by the most in five years in January, 5.6% was instead the same kind of 2014 disappointment that is becoming far too common. These growth figures include petroleum sales on the wholesale level, meaning that [...]
When the Federal Reserve was founded in 1913, there was no role for it in the marketing and selling of government debt. This wasn’t an oversight on the part of Congress. For more than two years before the Fed, the Treasury Department hadn’t issued any marketable instruments at all. In those days it just didn’t seem a necessary function. World [...]
The Asian flu of the late 1990’s might have been more accurately described as the Asian dollar flu. It was the first major global test of the mature eurodollar system, and it was a severe disruption in the global economy. It doesn’t register as much here in the United States because of the dot-com bubble and the popular imagination about [...]
In October 2015, Federal Reserve Vice Chairman Bill Dudley admitted that the US economy might be slowing. In the typically understated fashion befitting the usual clownshow, he merely was acknowledging what was by then pretty obvious to anyone outside the economics profession. Dudley was at that moment, however, undaunted. His eye was cast toward the unemployment rate and that was [...]
If “reflation” was born last year in Japan, and I think it was, it was surely given its most tangible dimensions in China. The idea that the Bank of Japan was going to do something magnificent was perhaps always a longshot, but enough given the times for people to hope (sentiment) they might try (helicopter). The Chinese, however, have been [...]
The oil effect continued to recede in late spring for more than just WTI prices or inflation rates. US trade on both sides, inbound and outbound, while still positive has stalled since the winter. Exports grew by just 6.2% year-over-year (NSA) in June 2017, about the same pace as estimated in December 2016. After contracting for nearly two years, twenty-two [...]
Brexit, Trump’s election, even the Bank of Japan rumored to be thinking helicopter. Last year was the year of thinking differently and therein was hope. No matter how many times some markets and especially media blindly accepted the “stimulus” or “recovery” judgments of economists over the years, by 2016 and the near-recession globally that accompanied a “rising dollar” that nobody [...]
In the early throes of economic devastation in 1931, Sweden found itself particularly vulnerable to any number of destabilizing factors. The global economy had been hit by depression, and the Great Contraction was bearing down on the Swedish monetary system. The krona had always been linked to the British pound, so that when the Bank of England removed gold convertibility [...]
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