Gold is on fire, but why is it on fire? When the precious metals’ price falls, Stage 2, we have a pretty good idea what that means (collateral). But when it goes the other way, reflation or fear of deflation? Stage 1 or Stage 3? If it is Stage 1 reflation based on something like the Fed’s turnaround, then we [...]
The payroll report wasn’t actually the first. The Treasury Department filed its Treasury International Capital (TIC) update yesterday, about two weeks late due to the federal government shutdown. However, since nobody follows it and the figures relate to a lot that’s beyond the US economy it doesn’t count in the mainstream view. That’s a shame because TIC will tell you [...]
It’s been awhile since we’ve had any data on the US economy. With the federal government having been shut down, especially the Census Bureau, the figures have gone dark. The current short-term government reopening will lead to an eventual rush of estimates, perhaps a few series that will be updated two months at a time. In lieu of all that, [...]
Even I’ve become numb over the years to some of the blatant mischaracterizations. Looking at any small positive number for whatever small economic account and declaring it the mark of a strong economy is standard procedure nowadays. But it’s the brazenness with which “they” are now attempting to discount the sudden reappearance of the minuses. I’ve said all along that [...]
I have to agree with my colleague Joe Calhoun. Everyone thinks the Fed is (over)reacting to the stock market drop in December. There’s a little bit of truth in it, reading so many FOMC transcripts as I have you get the unmistakable sense the S&P 500 is unofficially included on the policy dashboard. In the early part of 2007, policymakers [...]
Men have long dreamed of optimal outcomes. There has to be a better way, a person will say every generation. Freedom is far too messy and unpredictable. Everybody hates the fat tails, unless and until they realize it is outlier outcomes that actually mark progress. The idea was born in the eighties that Economics had become sufficiently advanced that the [...]
It was a tense exchange. When even politicians can sense that there’s trouble brewing, there really is trouble brewing. Typically the last to figure these things out, if parliamentarians are up in arms it already isn’t good, to put it mildly. Well, not quite the last to know, there are always central bankers faithfully pulling up the rear of recognizing [...]
In theory, it is always so simple. For China, it was intended that RRR cuts are stimulus. By allowing banks to use more of the reserves they’ve built up over the years it is meant to add to overall interbank liquidity. From there, banks flush with RMB supported by robust RMB money markets will lend and undertake more direct economic [...]
As Argentina’s peso careened toward oblivion, the country’s government begged IMF officials for more money. The organization in June 2018 had already agreed to a bailout expected to total more than $50 billion over three years, the largest in the fund's history. But it wasn’t working, and as the currency crisis accelerated toward the end of August there was little [...]
It was the most common catchphrase of 2017, interest rates have nowhere to go but up. Maybe it was doomed from the start given that Alan Greenspan was among the more prominent commentators expressing this view. In his mind, the bond market was in a bubble and the party was already over. His successors at the Fed, following in his [...]
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