Economy

Suasion, Sure, But Is It Really Moral?

By |2021-01-13T18:07:43-05:00January 13th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One of the concepts educators sort of snuck into the curriculum was something they called “moral suasion.” This term has meanings outside of Economics, but within the discipline it refers to one key element to the monetary policies of central banks. Basically, persuading markets or economic groups to act in the way officials want using rhetoric or threats without having [...]

Labor Shortage Under #1 Becomes Labor Bottleneck Under #2

By |2021-01-12T19:49:46-05:00January 12th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It doesn’t quite rise to the level of the LABOR SHORTAGE!!!! fiasco, not yet, but it’s moving up toward that territory. This, of course, had been during Inflation Hysteria #1 when at its absolute peak the unemployment rate was being used to justify expectations for not just a little more in consumer prices but a lot more. In 2018, in [...]

The Fundamentals of the Bond ‘Bubble’

By |2021-01-12T18:14:09-05:00January 12th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

They were never very specific to begin with, even in Ben Bernanke’s infamous November 2010 Post op-ed covering the start of QE2. Officials like to keep it purposefully vague as a kind of dry powder, a margin for error. If bureaucrats become too specific, the public would reasonably hold them to their own standard being laid out. The point behind [...]

Being Specific About Dollar Specifics

By |2021-01-11T19:21:19-05:00January 11th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Last week, IHS Markit reported that sentiment in Mexico’s factory sector had slipped again during December 2020. The organization’s manufacturing PMI had declined for the second straight month, having peaked recently back in October. Even then, the index hadn’t yet come close to crossing the magic 50 dividing line. The best it had managed during this global rebound was a [...]

Episode 41; Part 1: At Times, Interest Rates *Do* Go Up

By |2021-01-11T16:37:34-05:00January 11th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

41.1 Has the US Treasury Bond Rout Begun? (No.) [Emil's Summary] Mary Toft had delivered a litter of rabbits - that was the news that reached the court of King George I in 1726. Obstetrician John Howard arrived at Toft's bedside in September where he was presented with several animal parts, ostensibly from the supernatural womb. In October, she delivered [...]

Closing The Books on 2020 Didn’t Close The Books

By |2021-01-08T17:49:27-05:00January 8th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

ADP let the cat of the bag on Wednesday when the payroll processing provider announced it believed the level of private employment had declined in December 2020. Since it wasn’t likely to have been wildly inaccurate, it set the stage for a renewed negative number in the main government payroll report released today.According to those BLS’s Current Employment Statistics (CES), [...]

Did You Ever Think It Would Reach 42?

By |2021-01-07T19:31:07-05:00January 7th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Did anyone back when this whole thing started think that by the first week of the new year, 2021, jobless claims would still be significantly higher than every previous record worst level? We aren’t just revisiting the numbers, it’s completely rewriting the circumstances. The “V” hopes were dashed so long ago, and so thoroughly, the letter itself has completely dropped [...]

They’ve Gone Too Far (or have they?)

By |2021-01-06T19:53:13-05:00January 6th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Between November 1998 and February 1999, Japan’s government bond (JGB) market was utterly decimated. You want to find an historical example of a real bond rout (no caps nor exclamations necessary), take a look at what happened during those three exhilarating (if you were a government official) months. The JGB 10-year yield had dropped to a low of just 77.2 [...]

Seizing The Dirt Shirt Title

By |2021-01-05T19:16:33-05:00January 5th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In mid-December 2019, before the world had heard of COVID, China’s Central Economic Work Conference had released a rather startling statement for the world to consume. In the West, everything was said to be on the up. Central banks had responded, forcefully, many claimed, more than enough to deal with that year’s “unexpected” globally synchronized downturn.This view had been punctuated [...]

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