Wholesale inventories have ground to a halt, but since wholesale sales have also the inventory imbalance only continues midway already through its second year. Excluding petroleum, the wholesale inventory to sales ratio surged upward starting in November 2014. By the middle of last year, inventory growth had slowed but that only locked the current imbalance into seeming perpetuity. For the [...]
People are often mistaken for thinking the eurodollar is somehow related to the euro, but that is in many ways quite understandable. In reality, the eurodollar system is shorthand for a global, offshore monetary regime that is dominated by “dollars” but includes every major currency. Thus, the participants in these currency markets are usually the same banks, meaning that if [...]
So much of the basis for monetary policy was put in place in the 1960’s study of the 1930’s. It has become commonplace simply to assume 21st century tactics as being directly lifted from the start of the Great Depression. One of the causes of that calamity was certainly restrictive money supply, but any dereliction on the part of the [...]
Even with the huge turnaround in the Establishment Survey’s headline number in June, the Fed’s alternate factor model could not manage a positive number. It was an improvement over May (revised), but nonetheless the sixth consecutive month of contraction. The monthly figures have been revised more pliably this year, but overall the view of the labor market from the Fed’s [...]
As an outsider, it is difficult to gain the pulse of Japanese politics. Viewing it all only from an economic or financial perspective is immediately too narrow. There is far more than just Abenomics at stake, though Prime Minister Abe used the crutch of Abenomics’ failure so far as somehow a benefit. There are other factors, perhaps more important factors, [...]
As an apparent consequence of post-Brexit uncertainty, the effective federal funds (EFF) rate moved up from 38 bps in “yield” to 40 bps, and then even 41 bps on June 27. That rather tame reaction is due to the fact that there is nobody aside from primarily GSE leftovers trading in federal funds. That the market rate moved even 3 [...]
Economic Reports Scorecard The response to the much better than expected employment report today is quite interesting although not in a good way. Stocks will surely get most of the attention, assuming they continue to trade higher by the end of the day (they did), but other markets - bonds and gold - are not confirming the strength of the [...]
One of the consequences of last year’s junk bond blowup was, unsurprisingly, a dramatic decline in high yield gross issuance. The numbers were pretty stark. According to SIFMA, high yield gross issuance in Q1 was 60% less than Q1 2015, following Q4 which was 47% below Q4 2014. As the market has come back since March, for all sorts of [...]
As it currently stands in the headline BLS figures, the Establishment Survey greatly rebounded to + 287k from a downward revised +11k in May. There is this month, just as last month, too much emphasis on the monthly payroll figure as it is more often than not noise. We can only hope the drastic extremes of the past two months [...]
As it turns out, Mario Draghi is no stranger to blanket promises. In October 2008 as head of the Bank of Italy, Draghi joined Italian Finance Minister Giulio Tremonti in promising “as much as necessary” for Italian banks via a 5-year government guarantee of their bonds. The government standby would be available all the way through the end of 2009, [...]
Stay In Touch