On February 6, 2008, oil prices (WTI) dropped to $87.16, the lowest price since the prior October. Oil had been rising as the market misunderstood and dramatically mispriced what was going on; buying on the idea of monetary policy accommodation in growing intensity, while at the same time not factoring the hidden monetary destruction that was far greater. It was [...]
The seasonal spring rebound seems to have reset all the economic narratives. When economic accounts, along with financial markets, started to seriously slide toward the end of last year, for the first time even the mainstream began to admit, grudgingly, that weakness wasn’t just some remote happenstance that was a minor nuisance to an otherwise robust US economy. The idea [...]
Last July, the US Treasury Department finally issued its official report detailing its account of what happened on October 15, 2014. The statement was co-authored by staff at the Board of Governors of the Federal Reserve System, FRBNY, the SEC, and CFTC, as if the government were going overboard trying to prove its word the end of the matter. As [...]
Economic Reports Scorecard The economic data the last two weeks was deja vu all over again. The US economy has been growing at roughly 2% the last three years and I see no reason - yet - to expect that is going to change any time soon in either direction. Certainly there hasn't been anything in the data to support [...]
There is a core fallacy at the heart of monetary policy (actually there are many, but I'll keep it to just this single instance for the sake of brevity), one that was exposed by Milton Friedman himself, though indirectly and quite accidentally related to how he proposed an alternate scenario for the Great Depression. His view was that the Fed by [...]
It isn’t just that oil prices are falling, that is only one dimension of the full oil spectrum concentrating in the spot market. The more interesting and important information is contained within the whole WTI futures curve. As “dollar” funding pressure has built up since the front month peak on June 8, it has steepened the curve into deeper contango; [...]
Oil prices fell again today and it seems that gasoline is now on everyone’s mind. As noted last week, I don’t think that is the reason for the price action except in that it tells a very different story than the one in the media about “stimulus” hope. The significance of crude and gasoline is the difference in narratives and [...]
What happened in the period between 2007 and 2011 was the same that happened in 1930 and really 1931. The monetary “miracle” of the 1920’s was predicated on the same sets of inequalities and imbalances; revealed afterward in not just the crash that unwound the core processes but really in the lack of recovery that followed. We need only turn [...]
It seems as if the FOMC still doesn’t know what to make of itself. In June, the May payroll report released earlier that month clearly spooked them; not even Esther George bothered to dissent in favor a rate increase. Since then, the world seems so much better. The media tells us with every new economic release how “strong” the economy [...]
Some people have impeccable timing. Even if by accident, there are occasions when what they say or write comes out in almost perfect sequence. At the end of August 2014, UC Berkeley economist J. Bradford DeLong wrote an article for Project Syndicate that argued in favor of proper categorization. The lack of recovery was so drastic that the economist community [...]
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