Even I’ve become numb over the years to some of the blatant mischaracterizations. Looking at any small positive number for whatever small economic account and declaring it the mark of a strong economy is standard procedure nowadays. But it’s the brazenness with which “they” are now attempting to discount the sudden reappearance of the minuses. I’ve said all along that [...]
I have to agree with my colleague Joe Calhoun. Everyone thinks the Fed is (over)reacting to the stock market drop in December. There’s a little bit of truth in it, reading so many FOMC transcripts as I have you get the unmistakable sense the S&P 500 is unofficially included on the policy dashboard. In the early part of 2007, policymakers [...]
Men have long dreamed of optimal outcomes. There has to be a better way, a person will say every generation. Freedom is far too messy and unpredictable. Everybody hates the fat tails, unless and until they realize it is outlier outcomes that actually mark progress. The idea was born in the eighties that Economics had become sufficiently advanced that the [...]
It was a tense exchange. When even politicians can sense that there’s trouble brewing, there really is trouble brewing. Typically the last to figure these things out, if parliamentarians are up in arms it already isn’t good, to put it mildly. Well, not quite the last to know, there are always central bankers faithfully pulling up the rear of recognizing [...]
In theory, it is always so simple. For China, it was intended that RRR cuts are stimulus. By allowing banks to use more of the reserves they’ve built up over the years it is meant to add to overall interbank liquidity. From there, banks flush with RMB supported by robust RMB money markets will lend and undertake more direct economic [...]
As Argentina’s peso careened toward oblivion, the country’s government begged IMF officials for more money. The organization in June 2018 had already agreed to a bailout expected to total more than $50 billion over three years, the largest in the fund's history. But it wasn’t working, and as the currency crisis accelerated toward the end of August there was little [...]
It was the most common catchphrase of 2017, interest rates have nowhere to go but up. Maybe it was doomed from the start given that Alan Greenspan was among the more prominent commentators expressing this view. In his mind, the bond market was in a bubble and the party was already over. His successors at the Fed, following in his [...]
A couple of new developments in China that are worth commenting on. First, what everyone is calling a stealth QE. It isn’t. The central bank bill swap program is instead designed for two purposes at once, neither of which will follow along like an LSAP. The intent in doing this specifically right now suggests something other than stimulus. People are [...]
These things are all related, not that they are in any way connected by conventional thoughts on the subject of the global economy. Two European officials are now on record hinting at an ECB “pause.” There is one already underway in the US, Federal Reserve officials past and present debating how long it might last while markets price probabilities for [...]
A Return To Normalcy In the first two years after a newly elected President takes office he enacts a major tax cut that primarily benefits the wealthy and significantly raises tariffs on imports. His foreign policy is erratic but generally pulls the country back from foreign commitments. He also works to reduce immigration and roll back regulations enacted by his [...]
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