So thoroughly destroyed is Japan’s economy that some of the numbers it produces are beyond comprehension, just staggering in any meaningful context. For example, Japan’s real GDP (SAAR) for Q1 2016 was ¥530 trillion (chained 2005). That compared to ¥447 trillion in Q1 1994. Over two decades and two additional years the Japanese economy has grown by a grand total [...]
Last week, Japan reported GDP growth of 1.7% in Q1. That was much better than expected and led to all the usual extrapolations about how bright the future is in Japan now that QQE is working (and NIRP since that was started during the quarter). In this devalued economic world of central banking for the sake of central banking, context [...]
Despite the fact that the Fed has raised rates and therefore signaled via policy communication that their view of the economy is rather positive, both bond and stock prices don’t seem too caught up in the optimism no matter how much attention is paid to the shifting sands of monetary policy. Yesterday, the media was full of stories about how [...]
The Treasury Department’s updated official custody figures show us nothing unexpected. As usual, the TIC numbers are useful more so in corroboration of what contemporary analysis had already described. In the case of March 2016, we find just the sort of apparent reduction in “dollar” pressure that matches observation of general global conditions after February. Total net “flow” was +$64.7 [...]
On July 21, 2009, then-Fed Chairman Ben Bernanke wrote an op-ed published in the Wall Street Journal seeking to allay any fears over balance sheet expansion. This was all relatively new, and at that time the recovery seemed a good bet and appeared to be underway in many places. Bernanke’s goal was to soothe any fears that “inflation” would get [...]
With stocks falling today continuing somewhat yesterday’s post-FOMC selloff there was going to be universal citation of monetary policy; or at least these new expectations of monetary policy coming supposedly for June. The dominant narrative remains in favor of Fed power where stocks don’t do well without it. So as the central bank removes so very slowly its “accommodation” we [...]
After seeming so “dovish” last month in the bland, edited April policy statement, the FOMC meeting minutes reveal supposedly a different vibe. Today’s release has to this point given “markets” more to assume that a second hike will be coming in June. The statement itself leaves little doubt about what is actually dictating their (irrelevant) policy gestures. Many participants noted [...]
In yet another anecdote that proves the global recovery can only be political, acting Brazilian President Michel Temer appointed Ilan Goldfajn to be the next central bank head for that nation. Goldfajn is about as orthodox as they come: trained at MIT (saltwater, as if makes any difference), former director at the central bank who has “consulted” with the IMF, [...]
On March 29, 1900, Louis Bachelier successfully defended his doctoral thesis at the University of Paris. It was breathtakingly innovative and complex, so much so that it would take decades for his ideas to be fully understood let alone adopted. This was the case even though his thesis advisor was none other than famed physicist Henri Poincairé and that he [...]
Home construction estimates continue to suggest the same kinds of economic imbalances unchanged from last year. While construction of single family homes had been rising, that increase was not nearly as widespread and voluminous to indicate that the real estate market had been restored by full economic restoration (jobs, jobs, jobs). Apartment construction, on the other hand, has been scaled [...]
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