The last few pieces of data for Q3 more than suggest the US economy faltered in August/September. That trend would be alarming on its own had it occurred in a financial vacuum (as if ceteris paribus actually existed), but following along against the “dollar” is especially so. There was the initial, large decline in early 2015 that “unexpectedly” shocked economists [...]
Before embarking on the great unknown of Q4 2015, it makes sense to try to gain a little more clarity about Q3 2015. Specifically, the “dollar” run that blasted through China and opened the prospects for both an end to Fed/Yellen faithfulness and increasing uncertainty about the true nature of economy and finance globally began around July 6; a day [...]
The behavior of mortgage REIT’s lately embody a great deal of confusion about what they actually are and what that really represents. The first aspect to understand is that they are not participants in actual real estate, rather more closely aligned as a specialty financial firm akin to a non-registered bank. They make money as banks do (or supposedly they [...]
On this side of the “dollar” world, credit markets have all but written Janet Yellen into irrelevance. Despite her pleas (because of?) last week, there isn’t any part of money dealing or fixed income that is taking her “certainty” about recovery and “inflation” as even a partial setting. So lost is the FOMC, that everywhere you turn these markets are [...]
And so it goes, back to the Asian “dollar” again. The reverberations back and forth are nothing if not remarkable, revealing, I believe, some very real divisions between the general and “traditional” eurodollar and the new(ish) Asian “dollar.” Last week, it was the eurodollar out front while China and Hong Kong were seemingly enjoying the relief. This week started with [...]
While central banks would prefer to isolate oil prices as if in their own world with nothing at all to do with finance and economy more generally, it is oil prices that continue the disappointment connecting the “dollar” to the growing market (and therefore economic) wreck. Front month and spot crude prices had bounced around more favorably since the August [...]
Japan’s Prime Minister Shinzo Abe declared last week that Japan is no longer suffering from deflation the day after his own government statistics showed that Japanese prices declined for the first time since QQE began. That is actually great news for the Japanese people, though Abe and Kuroda at the Bank of Japan continually pledge to end the relief. Abe’s [...]
Michal Kalecki was a Polish economist whose work in the 1930’s earned him (for what it may be worth) the distinction of being Keynes before Keynes. In other words, because Kalecki was publishing papers and giving lectures in Polish rather than English, his arrival at the same conclusions and outlooks before Keynes in the UK was largely unnoticed. He was [...]
I think it worth noting one more reason Yellen was out front yesterday. Not only is liquidity suffering still globally but that is having an immensely negative effect on asset prices, especially at the bubble points. The S&P/LSTA Leveraged Loan 100 had not been updated since last Friday, which suggested (to me) continued pricing difficulties in leveraged loans. The combination [...]
Janet Yellen wasn’t the only central banker boxed in by recent “dollar” strife. The Brazilian central bank sparked a counter rally in the real after it had crashed to an all-time low. After absorbing a relentless and devastating devaluation, Banco do Brasil had run itself out of further options. They had already claimed that raising the benchmark SELIC rate to [...]
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