It is hypocritical, I suppose, to claim that Janet Yellen is irrelevant while at the same time constantly writing about the oblivious things she says. The Fed doesn’t matter but we need to obsessively focus on monetary policy anyway. Often the reasoning is upside down. By that I mean, we hope that by highlighting how little authorities know that someone [...]
The OCC reports that total gross notional derivatives outstanding jumped by nearly 8% in Q1 2017 over Q4 2016. At $178 trillion, that is even more than the reported total for Q3 last year. The latest estimates largely confirm the idea that bank balance sheets were relatively more accommodative in 2017 than especially later 2016. Among the more buoyant categories [...]
It would be preferable, of course, if what Janet Yellen said in any setting made little noise whatsoever. We aren’t nearly there yet, but are moving in that direction. Her testimony today before Congress in the Fed’s semi-annual Humphrey-Hawkins kabuki relic might actually help in that matter. If economists like Yellen were caught so unprepared for what happened after 2014 [...]
The US Treasury released its first report (under Trump) on re-examining financial regulations and their impact on economic growth. The publication was little noticed because most people don’t much care about Supplemental Leverage Ratios (SLR), though they should. For decades, regulators allowed banks to operate under Basel rules as if capital ratios were sufficient criteria for identifying risks, only to [...]
Last month it was Job Openings that soared to a new record high of more than 6 million (for April 2017), while the pace of hiring slammed lower to just more than 5 million. This month (May 2017), the opposite. Hires surged to nearly 5.5 million, while Job Openings fell sharply (and were revised lower for April). The large variations [...]
Former IMF chief economist Ken Rogoff warned today on CNBC that he was concerned about China. Specifically, he worried that country might “export a recession” to the rest of Asia if not the rest of the world. I’m not sure if he has been paying attention or not, but the Chinese economy since 2012 has been doing just that to [...]
Correctly interpreting the bond market is more than just how and when to invest your money in UST’s. Not that it isn’t useful in such a money management capacity, but interest rates starting at the risk-free tell us a lot about what is wholly unseen. There is simply no way to directly observe inside an economy what is taking place [...]
The payroll report for June 2017 was the first “good” one in some time. There are now a few indications that the “reflation” in the economy may be finally having positive effects on the labor market. The headline Establishment Survey gain was relatively solid at 222k, though it was above 200k for just the fourth time in the last nine [...]
Nothing ever goes in a straight line. For every rally there will inevitably be a retracement, a minor selloff often of no more than profit taking. These are generally pauses where a durable trend either overcomes doubts, or succumbs to them. In the stock market, they call it the wall of worry. In bonds, it’s become a bit more complicated. [...]
US imports rose year-over-year for the seventh straight month, but like factory orders and other economic statistics there is a growing sense that the rebound will not go further. The total import of goods was up 9.3% in May 2017 as compared to May 2016, but growth rates have over the past five months remained constrained to around that same [...]
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