The corporate junk bubble had gotten so beaten up and so dire that removal of the liquidation pressure was bound to attract bargain hunters and momentum chasers. Despite all that has happened, the lust for huge potential gains remains constant. Where that might have been more expressed upon the short side last year, with the end of the last liquidation [...]
There was a time not all that long ago that it was great, maybe even thrilling, to be a central banker. The late 1990’s had to have been the absolute apex, but the aftermath of the Panic of 2008 resurrected some of that lost luster. Undoubtedly that was due to great confusion over what had actually occurred, and thus lost [...]
By now most people have given up on IBM. I don’t mean that they have dismissed the company as a dinosaur on its way to extinction but rather it has been pulled down from the Pantheon of bellwethers, no longer important in helping us determine the actual state of the US and global economy derived from actual results (rather than [...]
Today was the third consecutive down day or selling in eurodollar futures. The June 2018 contract settled below 98.80 for the first time in April, almost unwinding the move higher at the start of this month. Even after the selling, the eurodollar curve remains as depressed as ever, discounting an entirely different set of future circumstances than stocks or junk [...]
Goldman Sachs did not disappoint. The bank’s earnings for Q1 were a disaster slightly worse than what was already anticipated as beyond bad. There was nothing that the firm did that it can say it did well, as Goldman’s CEO admitted there was weakness or “headwinds across virtually every one of our businesses.” For eurodollar or wholesale banks, that has [...]
On April 12, Muhammadu Buhari, President of Nigeria, was in Beijing to negotiate Chinese aid for his ailing country. At home, the government faces an enormous budget deficit largely on the price of oil. The more immediate threat, however, is that Nigeria in large part due to oil prices is being squeezed by monetary shortage. The country is an import-heavy [...]
Amidst all the pearls of wisdom unleashed in mainstream economics over the past unbelievable eight years or so, it was one paragraph of common sense that had it been written and appreciated at the start of this period might have saved us all the inordinate and totally unwarranted trouble. But borrowers will only demand more credit if they have optimistic [...]
There is undoubtedly serious stratification in the housing market, as higher end homes have no trouble selling at greater and greater price points. That, in turn, has left those owing homes in the tiers below struggling, supposedly, to do what Americans of past generations have done – move up to bigger and better. Because these middle level home owners are [...]
No matter how bad the economy seems to get elsewhere in various data series, the unemployment rate and the common assessment of the labor market (provided by the Establishment Survey) usually prevails. It has become almost a template where any description of the offending economic account will attach some version of, “X was down unexpectedly but should only be temporary [...]
As the major stock indices overtake or threaten psychological round numbers again (S&P 500 2,100; DJIA 18,000), they have done so with the same problem as occurred in 2015. Stocks have been overvalued for some time in historical comparison especially after QE3 and QE4, but it was supposed to be in anticipation of the full recovery that QE would make. [...]
Stay In Touch