The European slump had been a combination of several transitory factors. At least that’s what they had kept saying. ECB officials and staff Economists didn’t use that specific word, so far that’s the exclusive domain of the Federal Reserve. Regardless of semantics, the message was clear: the 2018 economy ended on a sour note but that was nothing to be [...]
It’s never about a single payroll report. Even still, there’s something significant in how the “good” ones aren’t measuring up the way they used to. According to the Bureau of Labor Statistics (BLS), the US economy gained 224k payrolls in the month of June 2019. Well above consensus, the headline is being described as relieving some of the growing economic [...]
Another discussion with Erik Townsend of MacroVoices about bonds, rate cuts, and what's behind everything this year. https://youtu.be/RvFBkFaPKoY
The US manufacturing sector may not be in as bad a shape as its German or Japanese counterparts, though it appears to be catching up on the downside. The Census Bureau reports today that new orders for all types of goods in all industries fell 1.6% year-over-year (unadjusted) in May 2019. This was the first minus sign for the broad [...]
The benchmark 10-year US Treasury yield closed below 2% for the first time since Donald Trump was elected President. Having flirted with that level several times over the past week, today the most-watched interest rate on the planet finally breached this one startling round number. And it comes during a week which by every conventional account should have been hugely [...]
Unable to tackle effective monetary requirements, bank regulators around the world turned to “macroprudential” approaches in the wake of the Global Financial Crisis. It was mostly public relations, a way to assure the public that 2008 would never be repeated. A whole set of new rules was instituted which everyone was told would rein in the worst abuses. Among the [...]
It was supposed to be the Chinese government who was going to rescue the global economy. Once the rationalizations ended and officials around the world realized there was serious economic weakness building at the end of 2018 instead of a globally synchronized inflationary recovery, the green shoots of 2019 were going to be in one big part a fiscal stimulus [...]
This green shoot didn’t wilt so much as it exploded into a fireball. FRBNY’s Empire State Manufacturing Index had captured the landmine in its initial 2019 readings. Starting from 21.4 (this version uses zero rather than 50 as its dividing line) in November 2018, by January the index had dropped 17.5 points in just two months. It then stabilized and [...]
It’s actually one of the few areas that has been studied in mainstream Economics. The links between global financial upset and broader economic consequences are pretty well understood. Trade gets shut down, therefore economies which are highly dependent upon the exchange of goods experience the effects first. When you see these bellwethers under pressure, it’s a bad sign. The mysterious [...]
The way I look at the global economy, there are basically five different zones. The first is the US and the second is Europe. China might be third on this list but often second if not first in terms of what’s driving marginal changes. In behind those is Japan, not what it once was but still often a bellwether for [...]
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