It’s not an exact fit or correlation, but that’s not the point. One follows the other, though the manner in which they relate is outside of any view. The point here is common sense, unclouded by the increasing absurdity with which this simple relationship is denied: Repo fails are an indication of collateral “tightness.” Dealer net long inventory is an [...]
Though the media rushes to defend it as benign but prudent regulatory changes, there is going to be fallout from rising LIBOR “tightness.” And it will likely start where it can be least afforded, especially after last year’s rout. Payments on floating rate loans issued by dozens of companies are set to increase as US dollar Libor for a period [...]
Basic economics has proven that when the supply of something dwindles, absent an offsetting drop in demand the price should rise. When translating these fundamental terms to the labor market especially of the past few years, the supply means “slack” or the available pool of workers not yet working; demand has been, we are told repeatedly, very robust; therefore the [...]
The fact that we are still discussing illiquidity in “dollar” markets everywhere shows just how little has changed despite so much time and effort. It is August 9 again, the ninth anniversary of the day that changed everything. Even though it has been almost a decade, it’s as if “we” learned nothing from the experience. There are indications in 2016 [...]
Wholesale sales for June 2016 declined slightly, -0.6%, year-over-year. Since February, sales have flattened out in unadjusted terms. Seasonally-adjusted, wholesales sales rose nearly 2% from May 2016, and are up $17 billion from February. Of that increase, however, $11.5 billion was petroleum alone. Taking out the volatile swings in oil and oil prices, wholesale sales ex petroleum have been stagnant [...]
On June 6, Janet Yellen spoke to the World Affairs Council of Philadelphia in what were highly scrutinized comments. The occasion was just a weekend in between the May payroll report that clearly unnerved her and the rest of the FOMC. Prior to that BLS publication, it was believed that a rate hike in June was all but set. Afterward, [...]
The Federal Reserve carefully notes that its Labor Market Conditions Index (LMCI) is subject to revisions in as much as its entire history almost every month. That is the nature of the project trying to tie together 19 separate data points into a coherent yet comprehensive whole. Part of the inherent recurrence of revisions, however, is simply the pace of [...]
The mainstream, dominant view of monetary policy remains as if it were “accommodative” or “stimulus.” Low rates and/or balance sheet expansion are treated as one and the same in terms of economic effects. The mountain of economic evidence since the end of the Great Recession, however, argues that that view is backward; starting with the observation that the Great Recession [...]
Under traditional “rules”, devaluing of a currency is supposed to bring about a measurable, even obvious increase in the export sector of the country undertaking the manipulation. The Japanese have been notorious for believing in the paradigm, and not just in the past four years under QQE and the whispers of it. Some people still believe that China is merely [...]
Given it is payroll Friday, it has to be a chart related to the futility of focusing on the headline number. There is any number of ways with which to accomplish this, but it serves well to highlight the relationship already presented in my view of this specific view of the payroll report. Economists often claim that the participation problem [...]
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