Sometimes it pays to wait. Better to be sure than premature. In January 2014, the journal Central Banking handed out its inaugural awards. Among the recipients was Paul Volcker who was bestowed a lifetime achievement prize. The initial Governor of the Year honorific, something like a central banker MVP, went to Mario Draghi of the ECB. He graciously accepted in [...]
For the second half of 2015, how dicey did it really get in China? It’s difficult to assess going by something like real GDP given how notorious the Chinese have become for hitting their growth targets no matter what. But for those two quarters we can infer a whole bunch of nasty problems by the difference between real GPD growth [...]
It would be easier if we could just know the right amount of oil futures backwardation. The literal answer for the question of what’s the correct level is the curve’s shape at any given moment in time. That’s a little too close to the theory of perfectly efficient markets for me. Whatever it may be, or could be, the WTI [...]
Morgan Stanley is bit more complicated as a derivatives dealer than the Big 4. Those other banks hold most of their books at their bank subsidiaries. In this case, the term bank actually means something, the legal distinction of a depository institution. Each of the four banks, JPM, C, GS, and BofA, have a holding company umbrella over them like [...]
Inflation hysteria was primarily focused on the bond market. While it had political elements attached, mainly the desperate attempt to discredit the basis for populist discord, mostly it was a bond bear thing. The economy especially in the US was about to finally live up to the unemployment rate, the hysterics claimed, which meant an explosion in wages therefore inflation, [...]
If we are in the red on global eurodollar money, it makes sense to ask the question where we are in terms of global economy. What I mean by that is in the context of these repeating cycles. The world starts out enthralled by central bank or government actions when these usually come only after the ultimate depths of the [...]
There is an interesting, ongoing academic debate about what shape the crude oil futures curve “should” take. Quite naturally, it seems backwardation is the market baseline. Most people, I think, presume otherwise because of their familiarity with commodities like gold. Backwardation in that market implies a physical shortage. Unlike that precious metal, crude oil is a usable commodity whose value [...]
At some point, the boom had to have boomed. We are moving into the past tense for all this now, inflation hysteria almost certainly tucked away into the economic ledger alongside four other false dawns. Data is coming in for June 2018, meaning half of this year already recorded and analyzed. It’s not what it was supposed to have been. [...]
When it comes to the stock market and the corporate cash flow condition, our attention is usually drawn to stock repurchases. With good reason. These controversial uses of scarce internal funds are traditionally argued along the lines of management teams identifying and correcting undervalued shares. History shows, conclusively, that hasn’t really been true. Last year’s tax reform law was meant [...]
The PBOC really needn’t have conducted the last few of its RRR raises. By the time they were in the books, Chinese inflation was already well underway toward being tamed. Though their CPI wouldn’t register for a few more months still, peaking in July 2011, commodities had already turned decidedly downward. Copper went first, hitting its high on Valentine’s Day. [...]
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