This is one of those time where so much has happened that in the end it amounts to so very little. The latest GDP estimates included a sharp rise in the current estimates, a reworking of past estimates that seemed to have made the economy much richer, but behind all that the same economic picture as before. As most people [...]
BNP Paribas is apparently calling for an epic rout in German bunds. According to Bloomberg (who else?) it’s a mini-revival of Bill Gross’ ill-fated tweet advertising the “short of a lifetime.” In April 2015, the man many called the bond king said it was going to be better than the pound in 1993. https://twitter.com/JHIAdvisorsUS/status/590519759797530624 Gross advertised waiting until later in [...]
We are closing in on a record for economic expansion. It’s been talked about more frequently, especially since one has already been reached in the labor market. According to the BLS, there hasn’t been a negative employment report since September 2010 (there was one in September last year, but it has since been revised to slightly positive). That’s 93 consecutive [...]
One soft indication of how far things have gone is Bloomberg. Six or eight months ago, its newsfeed was filled with uniformly apocalyptic hyperbole over inflation. The tight labor market, according to the Federal Reserve, was going to lead to a faster and farther rate trajectory. Sparked by quickening confidence in the short part of the curve, there was just [...]
It’s not any stretch to write that the real estate market has hit a soft patch. Resales are down if only a little as are construction indications (permits and starts). These do not indicate that the housing market is in trouble, just that it isn’t so great underneath the unattached boom commentary. To begin suggesting something more concerning than all [...]
In 1962, physicist Wolfgang Panofsky finally obtained funding from the Atomic Energy Commission. As a faculty member at Stanford University he wanted the federal government to fund his monster. Dubbed Project M, for monster, Dr. Panofsky was seeking a method for scientists to obtain evidence for what was really going on inside the atom. The project was really a linear [...]
Why so much wholesale emphasis on collateral? Easy. The monetary history of recent times hasn’t been very kind in that regard. On the one hand, the repo market has become so much more important than it was, as scared interbank participants fled unsecured eurodollar markets eleven years ago next month for the presumed shelter of security(ies). But in turning toward [...]
In 1999, real GDP growth in the United States was 4.69% (Q4 over Q4). In 1998, it was 4.9989%. These were annual not quarterly rates, meaning that for two years straight GDP expanded by better than 4.5%. Individual quarters within those years obviously varied, but at the end of the day the economy was clearly booming. It also helped that [...]
When I write, as I did again yesterday, Brazil may already be toast it’s not just Brazil who is likely to be on the painful end of the eurodollar. The balance of probability says that this one unfortunate South American country is potentially going to suffer more than most, for a second time, but they will not be unique in [...]
The reasons why the IMF stepped in to rescue Argentina were perfectly clear back on June 8. The peso was in freefall and though the Argentine government had spent two years fortifying the country’s reserve position, by borrowing heavily in the Eurobond market, that was merely orthodox thinking. Reserves are widely believed to be something like insurance. Insurance against what? [...]
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