The economy was sailing along into its Hollywood sunset in 2014 before it was rudely interrupted by the “rising dollar.” At first, the mainstream narrative was that a higher dollar exchange was a good thing, an indication that global markets were embracing the economic revival; or, if you didn’t quite want to get that optimistic, it at least signaled the [...]
If the economy this year is like it was in 2014, the latest payroll report is moving in that direction. As has been the case since that time, the Establishment Survey will typically estimate two good months in a row. For this year that means those above 200k, as the 209k in July 2017 follows an estimated 231k gain in [...]
Almost exactly ten years later, central bankers believe they are so very close now to the end of the crisis. It doesn’t matter that they have made the same claim before, this time is different they say. Global growth is finally synchronized, and all the policy clocks can strike normal, or what passes for normal, almost all at once. There’s [...]
Why are there so many derivatives? According to the Office of the Comptroller of the Currency, US banks reported for Q1 2017 being party to $178.3 trillion in notional contracts outstanding. The Bank for International Settlements estimates a global total of $482.9 trillion (as of H2 2016). These are for many people simply frightening numbers. They dwarf all sense of [...]
It is often said that the market for US Treasuries is the deepest and most liquid in the world. While that’s true, we have to be careful about what it is we are talking about. There is no single US Treasury market, and often differences can be striking. The most prominent example was, of course, October 15, 2014. In truth, [...]
Total construction spending fell considerably in June 2017, according to Census Bureau estimates released yesterday. Seasonally-adjusted, layouts for new construction declined by 1.3% from May. That’s the second time in the last three months there was such a large drop. Year-over-year (unadjusted), total spending grew by just 1.2%, the lowest rate of expansion since November 2011 (subject to revisions, which [...]
In December 2015, automakers were still riding high. Auto sales that year were to be another record, both in terms of units as well as dollars. Americans had spent about $437 billion on new vehicles in those twelve months, up from $407 billion the year before. Though there were notable disturbances throughout especially the second half of 2015, that December [...]
In the midst of revisions season, everything is up for re-evaluation. Some end up as big changes, others mere footnotes. A lot has been revised (lower) about the past few years, particularly surrounding the substantial downturn at the end of 2015. Inflation rates are not among that list. The PCE Deflator has been given only mild benchmark revisions in contrast [...]
For such an important set of data, the PCE stuff continues to suggest a whole lot of capriciousness. There has been a tendency to drastically revise figures such that they change not in the small ways regular revisions are supposed to produce. The whole purpose of especially benchmark revisions is to calculate a more accurate number. In the past few [...]
Activist hedge fund manager Bill Ackman succeeded in 2013 in ousting Procter & Gamble’s CEO Bob McDonald. It was noteworthy at the time because the company issued a strange memo repeating often verbatim answers to questions it posed to itself. Among them was if Mr. McDonald was fired or, as had been relayed publicly, he voluntarily retired. The memo merely [...]
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