Economy

The Mother Of All Bait’n Switches

By |2017-06-29T12:41:52-04:00June 29th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

In light of light inflation measurements, central bankers have no other choice but to step up their rhetoric. Mario Draghi took the mantle earlier this week and has been joined at various points by others. The message they are sending is one that is purposefully muddied. There isn’t left to them any other choice. There are only two pillars holding [...]

Forget Draghi, Crude Matters

By |2017-06-28T18:14:48-04:00June 28th, 2017|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Despite Mario Draghi’s supposedly misinterpreted comments earlier this week, there are global indications that the best of this round has already been reached. Policymakers are always going to claim things are improving, that much is given. But there is tremendous difference between that and what has occurred, especially if it is indeed rolling over worldwide. The earliest indicators for China’s [...]

Home Attitude Adjustments

By |2017-06-28T16:52:03-04:00June 28th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The National Association of Realtors (NAR) reported today that pending home sales declined for the third straight month. As with so many other accounts, it’s not really the downside that is relevant but how instead there has been little to no growth for quite some time now. The NAR’s index value, which is how the organization reports the level of [...]

Of Great Importance Inventory

By |2017-06-28T12:30:52-04:00June 28th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The recession of 1980 stands out in US economic history. It was by several measures a severe contraction, yet it only lasted a very short while. Contemporarily, it was believed to have been limited to just parts of two quarters. The current estimates describe it as a total of seven months from January to July 1980. That stands in sharp [...]

The Best of Durable Goods

By |2017-06-27T17:48:58-04:00June 27th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The status of durable goods in May 2017 appears to be up for debate. Once more there is major disagreement between the seasonally-adjusted figures and those unadjusted. In the estimation of the latter, May was a relatively good month for US manufacturing. Orders were up 7.3% year-over-year, the highest growth rate in nearly three years. It continues the track of [...]

Maybe Deep Dissatisfaction Has A Point

By |2017-06-27T16:14:47-04:00June 27th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

To complete a trifecta, maybe someone could interview Alan Greenspan about rational exuberance. The last of the latest Fed Chairmen, Janet Yellen, purports today that the next financial crisis will not be in “our lifetimes.” The issue, however, isn’t even crisis so much as credibility. Given that she and the rest of them had no idea about the last one [...]

It’s Not The Downside, Where’s The Upside?

By |2017-06-27T12:04:24-04:00June 27th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The IMF like so many others appears to have been caught up in “reflation.” Its models had in its April 2017 WEO outlook upgraded US growth prospects for the first time in a long time. In their final 2016 WEO, the institute projected US real GDP growth of 2.20% for calendar year 2017, and then just 2.10% for calendar year [...]

Weird Obsessions

By |2017-06-26T17:51:51-04:00June 26th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

People often ask why I care so much about China. In some ways the answer is obvious, meaning that China is the world’s second largest economy (the largest under certain methods of measurement). Therefore, marginal changes in the Chinese economy are important to understanding our own global situation. But it goes much deeper than that. I have described my own [...]

Follow-Up on Bills; Supply Side

By |2017-06-26T16:51:54-04:00June 26th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Returning to the theme of the parallel evolutionary developments in the early 20th century as compared to the last decades of it, in 1908 famed Gilded Age industrialist Andrew Carnegie wrote what seems today a misplaced article for New York Outlook magazine. The steel magnate lamented the state of American banking, which he called within his piece “at least one [...]

Chart of Last Week: In Need of Official Address

By |2017-06-26T11:56:08-04:00June 26th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to the US Treasury, the calculated equivalent treasury bill yield for the 4-week maturity was 76 bps at Friday’s close. At such a short time frame there isn’t actually a single instrument that creates the rate, more of an amalgamation (spline) of various 4-week securities staggered on their own. The bill maturing this week, for example, closed last week [...]

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