Over the past two days, Chinese exports exploded, US payrolls bested 300k, and China’s CPI recorded the hottest inflation in 5 years. Globally synchronized growth? It’s times like these where remembering how nothing goes in a straight line helps settle and ground interpretations. In thinking that way already, you are never surprised when there are good even perfect data reports [...]
There is no change to the risk budget this month. For the moderate risk investor the allocation to bonds is 50%, risk assets 45% and cash 5%. We have had continued volatility since the last update but the market action so far is pretty mundane. The initial selloff halted at the 200 day moving average and the rebound carried to [...]
The Hong Kong dollar is a hair’s breadth away from a currency crisis. Plummeting over the last week or so, the exchange value crossed 7.84 today. At 7.85, the HKMA is required to sell US dollars in order to buy up HKD. That may be just what Asian banks are looking for, some other US not HK dollar supply. In [...]
Our contention behind “residual seasonality” has always been that there is no residual but to some extent an understandable and easily explainable seasonal issue. Each Q1 appears to be unusually weak because, well, it is unusually weak. The reason is simply Christmas. Americans splurge for the holiday and then spend the first several months of the following year to some [...]
After an incredible run, up nearly 10% in just four months, imports took a break in January 2018. Year-over-year, not seasonally-adjusted, imports gained 9.5%, a rate that is better than experienced during the similar upturn in 2014 but still well short of what the rest of the world requires for global growth. The fact that almost all of that gain [...]
Continued from Part 1 What these unusually weak productivity estimates lean toward is, quite simply, the possibility the BLS has been overstating jobs gains for years. In early 2018, there is already the hint of just that problem in a 4.1% unemployment that doesn’t lead to any acceleration in wages and labor income. What it does suggest is that something [...]
Most people have been looking at Jerome Powell’s Chairmanship of the Federal Reserve as continuity, a comprehensive extension of Janet Yellen’s (and therefore Bernanke’s). This would by nature include all the nasty habits Chairman Yellen had picked up during her one term. At the top of that list is the word “transitory”, particularly how it came to be used during [...]
On October 31, 1997, the IMF announced a rescue for Indonesia. Though it was Thailand who caught the Asian flu first, it was this latter country where a monetary line in the sand was drawn. Nobody wanted to find out what a complete wipeout of the Indonesia rupiah might mean for financial conditions across Asia. Included in that category of [...]
The narrative for global growth, synchronized or not, doesn’t do well with JPY on the rise. Referred to as a safe haven, there should be no reason for an exchange value at a level not seen since late 2016. It flies in the face of the falling dollar, though in the case of yen, backwards as is usual, this particular [...]
Last week, Bank of Japan Governor Haruhiko Kuroda unleashed a mini-controversy with remarks he now claims were taken somewhat out of context. On March 2, speaking before Japan’s parliament, the central banker sure sounded quite confident: Right now, the members of the policy board and I think that prices will move to reach 2 percent in around fiscal 2019. So [...]
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