In its December 2015 policy statement, the one that raised the federal funds target corridor, the FOMC changed the language surrounding its inflation stance. They still projected the 2%, of course, but were now indicating that they were more certain than ever about it. In many ways they had to shift the wording because of the actions; the prior passage [...]
Factory orders shrank by 3.5% in November, which was actually the best monthly rate for 2015. Unfortunately, that continues a streak of 13 consecutive monthly declines as the manufacturing recession continues to persist. The more important 6-month average is still worse than -7%, which remains not far off the worst part of the dot-com recession by comparison. Seasonally-adjusted, factory orders [...]
US oil prices (WTI) ended 2014 at $53.45 spot. Since the decline to that point was thought be a temporary deviation, the fact that WTI ended 2015 at $37.07 is inconceivable to that perspective. The reasons for that were the unemployment rate and GDP. Payroll expansion had just fired up into the “best jobs market in decades” while GDP was [...]
The Chinese currency is once more on top of the news heap, with everyone trying to figure out what is going on. At first, “devaluation” was almost welcomed back in August when it was viewed as some kind of belated PBOC indirect “stimulus.” Very quickly, however, that view was softened as the currency direction appeared very much related to financial [...]
There no longer is any doubt about the state of industry and manufacturing in the US as well as the rest of the world. The most diehard, stubbornly optimistic economists have now completely given up on the “goods economy.” Instead, they have been forced to try to explain why such a slump would show up exactly when it shouldn’t, and [...]
The market for bankers’ acceptances was one of the first tasks of the Federal Reserve. There was a flourishing financial trade in acceptances in sterling which was purely a matter of the British pound being something like the global reserve currency, at least for a vast portion of global geography. With the United States becoming an industrial and trading power, [...]
In September 1979, the Federal Reserve Bank of St. Louis published a paper that attempted to clarify the monetary and economic characteristics of repurchase agreements. The name itself offers little but further confusion as prior to the 1990’s repos could be classified as either collateralized loans or actual sales and purchases depending on individual circumstances. In some cases, the two [...]
There does seem to be internal financing adjustments going on inside the arcane and cumbersome framework of CNY to US$. Whether or not that is desirable remains to be seen, but the case of the past few weeks suggests, and somewhat strongly, that the PBOC is again losing control. What it is almost certainly like trying to squeeze a balloon, [...]
In the manufacturing sector we find the most supreme test of economic credentials. Despite what is clearly taking place, the mainstream, orthodox outlook and assessment continues to dominate. There isn’t any doubt anymore about the manufacturing sector, as recession not only is broad enough there on its own it continues to deepen and darken. Yet, because Janet Yellen declared the [...]
The most important outbreak or story of 2015 had to have been the junk bond reversal. It combined all the major elements of what investors and economic agents are both fearing and, at one point in the past anyway, hoping. It is the confluence of finance, “dollars”, liquidity and economics with or without recovery and the best scenario. The FOMC [...]
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