Why did Treasury bonds selloff on Wednesday? Obviously, we can’t ever know for sure why markets move the way they do especially in the shortest timeframes. Still, that won’t stop us from speculating anyway. The 10-year UST yield spiked just above 3% in early trading Wednesday morning. This particular drive began the night before. Treasury futures had been flat for [...]
Economists say that the labor market is being restrained by secular factors, those outside of regular macro potential. These are opioid use, demographic changes toward an older population, and the downside effects of globalization as it alters the skills required by employers. Between drug addicts, retiring Baby Boomers, and lazy Americans who won’t go back to school, there is now [...]
Total construction spending rose 5.5% year-over-year (unadjusted) in June 2018. On a seasonally-adjusted basis, spending fell rather sharply two months ago though that doesn’t really matter given the short-term noise of month-to-month changes. The real problem is this 5.5% given that public construction has been moving higher since last year’s big hurricanes. In other words, it’s the private channel that [...]
Why did inflation hysteria die? The answer is surprisingly simple. Proponents way oversold the thing. They kept claiming that the labor market, via a truly booming economy, would force the Fed’s hand. Wage growth was about to explode, therefore monetary policy couldn’t afford to be complacent. Aggressiveness was about to become Jay Powell’s go-to position. This year is now more [...]
The entire purpose of China’s presumed rebalancing act is supposedly that the country’s economy will no longer be strongly linked to industry. Manufacturing, for export in particular, is what made modern China into an economic powerhouse, transforming a once agrarian subsistence society (thanks to socialism). One need only look at overhead or satellite images of those cities chosen as special [...]
Argentina has had a good month of July. When last we checked toward the end of June, the peso was still plummeting. It would nearly close below 29, an absolutely astounding drop that made plain this wasn’t devaluation as “stimulus.” That plus the whole record IMF bailout and the immediate dollar funding that came with it. That was June 7, [...]
With the switch to the 2012 reference, the new fixed dollar comparison makes revisions in the PCE Deflator a bit springier. Lows are a little lower; highs a little higher. At the bottom in 2009 (July), for example, the 2009 reference says consumer price inflation was -1.18%. This new 2012 reference says it was -1.24%. For June 2009, the difference [...]
I wrote back in August 2016 out of frustration. There were any number of topics to have become flustered over at the time, but on this particular occasion it was the personal savings rate. Because it is, like productivity, essentially a plug in between two statistics whenever those two particular series, income and spending, are subjected to revision it can [...]
There are two components to economic demand: willingness and ability. The two factors work only in tandem. We all want to buy our own private islands stocked with the most obscene amenities yet invented, but none of us are able to put together the down payment for such an insane venture. The demand for ultra-wealthy living is high in fantasy, [...]
There is a huge difference between believing in gold and believing in the gold business. The former is about wanting a stable, dependable global monetary system, one very much like what survived thousands of years of history without a whole lot of changes to it. The latter is about convincing you who are likely to believe the same thing to [...]
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