The Treasury Department’s Treasury International Custody (TIC) estimates for September were released, and though I wish they were timelier they do typically confirm what we suspect about the months at each update. There were negatives all over this latest month, including private flows, which would fit the overall narrative where Chinese money markets were all over the place and repo [...]
Consumer prices accelerated again in October 2016, with the overall CPI calculating a 1.64% inflation rate. That is up from 1.46% in September, and the highest since October 2014. The reason is energy prices. For the first time in over two years, the energy component of the CPI was positive year-over-year. Having been as low as -20% in early 2015, [...]
In another case of government meeting reality, Saudi Arabia sacked its long-serving Finance Minister at the end of October. In a move reminiscent of the recent shakeup in Beijing’s Finance Ministry, with longstanding technocrat Lou Jiwei being ousted, Saudi Arabia has had to face up to more than just oil prices. Ibrahim al-Assaf had been in that position since 1996, [...]
As the Chinese yuan continues to sink lower in what looks to be an increasingly uncontrolled fashion, the desperate linking of that to US interest rates becomes even more absurd. As shown yesterday, global currencies have run into great trouble with US rates moving higher and lower; in fact more so with lower US rates than higher. The connection between [...]
Industrial production continued its slow, shallow contraction, unusual in any economic climate but perhaps more compelling here in describing the different direction markets are taking. Clearly, as discussed several times before, certain parts of certain markets are betting that different is going to be effective where the same old was clearly not. The actual economy, however, has yet to show [...]
Clichés are clichés for a reason, largely because their meaning no longer requires precision in order to communicate information. Because of that, their use is usually limited to cultural exchanges, being largely shunned in areas when technical proficiency requires a high level of exactitude. Economics and finance in more recent years, really since August 2007, seemed to have shifted more [...]
There were a great many ridiculous things we witnessed last year, but among them was the unshakable desire for the media and economists to label consumers and consumer spending as “strong” regardless of any other considerations. In most cases, whatever month-over-month change would seem positive, but it was so only in that very narrow view. Misunderstanding natural variation, they all [...]
A big reason why Chinese banks struggled yesterday in their daily bid for “dollars” (CNY DOWN) was the relatively unchanged economic statistics for November. Many in the media have tried to frame China’s economic situation in 2016 as if stabilizing were a positive outcome. Markets, especially funding markets, aren’t so enthused about the prospects for “weak but not getting weaker.” [...]
The rout in EM’s continued into this week, suggesting that the negative reactions last week may have been more than reflexive recoiling to whatever catalyst. The media is struggling to figure it out, and so has brought up the usual suspects even though there is great inconsistency in doing so. Expectations of fiscal stimulus, infrastructure spending and reflationary policies under [...]
Where are we in history when the avowed Socialist (capital “S”) from Vermont is the only voice of reason for the Democratic Party in the aftermath of last week’s election? I don’t intend to make this some kind of political screed against one party or the other; I am on record numerous times claiming the America we live in of [...]
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