Industrial production in China accelerated in November to 6.2% from an abysmal 5.6% in October. As per usual, any similar change is met with assurances that this time, unlike all prior, everything is working. It has become a regular game of ill-considered contention, as every single move in IP or some other factor that stops declining is immediately and confidently [...]
The latest developments from China’s monetary realm were the IMF’s inclusion of RMB into its “reserve” basket, and at a proportion greater than either the pound or yen. None of that is surprising, however, nor is it truly meaningful as a practical matter. The change is more of an official stamp upon what transpired long ago, with little bearing on [...]
Any ideas about junk bonds outperforming because of the booming economy confirmed by a monetary policy rate hike has been killed and buried. Conventionally, it was assumed that interest rates are not the primary “risk” parameter for high yield corporates of all flavors, and that is correct. Junk issues and lower tier obligors are creatures of the credit cycle, thus [...]
On November 2, Hong Kong’s Exchange Fund reported its worst ever quarterly loss. For the quarter the number was an astonishing -HK$63.8 billion, turning what was an already-reduced YTD profit from Q2 into a –HK$36.8 billion loss so far for 2015. What caught most people’s attention was not specifically the loss but that it was derived more so from “other [...]
There isn’t much commentary needed here, as the prices and yields indicate everything relevant and important. I would only add that seeing August 24, October 15 and now the change (in acceleration) in December all add up to something different than the FOMC’s whatever influence. There is no monetary policy reason for the August 24 global liquidations to show up [...]
One of the problems with GDP as a statistical Swiss-Army knife for economic considerations is its very methodology. This doesn’t mean that there aren’t good and sound reasons for that kind of construction and presentation, only that in making such choices some elements are left out; even important pieces. In this case, I refer to the double counting problem which [...]
There are times when you can distill the utterly complex into something elegantly simple. This is one of those times, as there really should be no doubt as to “what” and “why” about December so far. From repo to crashing EM’s to crude oil, the common theme is both eurodollar and Asian “dollar.” In that sense, it might be fair [...]
Given that Black Friday weekend, including Thanksgiving itself, was uninspiring, the fact that the Commerce Department’s estimates for retail sales for all of November were again among the worst shows that Black Friday actually remains a pivotal part of the holiday setup. The trend has been to dismiss the traditional Christmas buying season kickoff as if earlier discounts might have [...]
If there is a shift in the credit scheme of the junk bond bubble of late, the reduced volume in issuance would suggest why. While issuance, including high yield and leveraged loans, has been volatile the past few years it had never been so persistently beaten down as it is now. In other words, there had been “slow” periods in [...]
The wholesale economic problem widened again in October, even as the Commerce Dept. reported yesterday wholesale inventories rose at the slowest pace in two years. Overall, non-adjusted inventories rose by 3.6% compared to October 2014, which was less than half the rate of the summer of 2014. But that slowing inventory (which is still GDP negative in the second derivative [...]
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