On March 29, 1900, Louis Bachelier successfully defended his doctoral thesis at the University of Paris. It was breathtakingly innovative and complex, so much so that it would take decades for his ideas to be fully understood let alone adopted. This was the case even though his thesis advisor was none other than famed physicist Henri Poincairé and that he [...]
Home construction estimates continue to suggest the same kinds of economic imbalances unchanged from last year. While construction of single family homes had been rising, that increase was not nearly as widespread and voluminous to indicate that the real estate market had been restored by full economic restoration (jobs, jobs, jobs). Apartment construction, on the other hand, has been scaled [...]
There is a great deal that is wrong with mainstream economic commentary, starting with its unwavering devotion to orthodox economics and unshakable faith in their “stimulus.” No matter how little is actually stimulated there is never any doubt that the media will simultaneously forget the last one while lavishing praise on the next one. It is, however, the actual economic [...]
Industrial production contracted for the eighth straight month in April, dropping 1.07% year-over-year. That’s a slight improvement from those prior months but likely only until April’s estimate is revised lower in the coming months. That has been the trend of late in both immediate terms as well as serious long-term revision to benchmarks. As far as the former, it suggests [...]
The US Treasury yield curve is flattening again, with parts finally in 2016 surpassing the bearishness exhibited to start 2015. The mainstream is just now starting to notice likely because unlike last year there are no longer credible excuses to simply wish it away. “Transitory” is not a word you find much anymore, replaced instead by reluctant and forced acknowledgement [...]
What if the FOMC and the wider Federal Reserve apparatus had heeded Greenspan’s uncertainty? There is grave danger in wandering too far into counterfactuals, but there is some value, I think, in the exercise in this context. What we are really talking about is time, and it is time that is most relevant today as the greatest economic cost. This [...]
The Committee For Monetary Research & Education (CMRE) will be holding a discussion on June 6th at the University Club in New York. The topic is China and the Credit Challenge, which should be even more interesting given this weekend's economic update from China. CMRE brings some of top minds on credit and geopolitics to discuss the likelihood and dangers [...]
We often think of liquidation events exclusively in terms of price, but in the real economy there is volume to consider. When financing dries up as financial agents run for cover lest they receive only further margin or collateral calls, it enacts a short run disruption in economic flow. At the margins, some firms are forced to delay activity while [...]
It’s not just that there was an obvious and intense change in sentiment, as that is quite common among and within markets. It is more so that this repetition is a little too familiar. In January, the mainstream was taken aback as the world looked headed for a very dark place, all “unexpected” of course. Just a few months later, [...]
The calendar has been playing an outsized role in economic accounts this year, from leap year adding to February and now different months for Easter. With March entertaining the holiday this year, it seems as if seasonal adjustments might have been unduly harsh with retail sales. Into April, without Easter, seasonal adjustments may have been too charitable. Unadjusted, total retail [...]
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