They really do seem to love Jay Powell’s announcement effect, these Germans. Magic words, no relation to what’s actually done only what’s said. Confirming in every way what I wrote yesterday, the psychology of money-less monetary policy being acted out exactly according to the plan. Central bankers do, those trained by Economics schools respond in predictable fashion.Pavlov is in awe [...]
Why didn’t 1987 turn out to be 1929 redux? Alan Greenspan was deathly afraid this would be the case, and in turn he made everyone else unnecessarily upset along the same lines. Especially Congress. The fact that both stock market crashes occurred during the month of October, though, actually ends the similarities. That plus clueless Federal Reserve officials.Why the one [...]
iTunes: https://apple.co/3czMcWN Spotify: https://spoti.fi/3arP8mY Google: https://shorturl.at/fpsEJ Alhambra-tube: https://youtu.be/1--doZDGZ1M Twitter: https://twitter.com/JeffSnider_AIP Twitter: https://twitter.com/EmilKalinowski Art: https://davidparkins.com/ [Emil's Summary] Dr. Milton Friedman, in a December 1997 article, correctly diagnosed what was wrong with the Japanese economy: not enough money. His prescription? Quantitative easing. It was, unfortunately, malpractice. In late April 2020, the Bank of Japan announced its 24th iteration of it. Maaaaaaaaaaaaaaaaaaaaaaaalpractice.It is often said [...]
“Intelligence is the ability to adapt to change.” Stephen Hawking The economic news over the last month has been as awful as anyone alive has ever seen. Unemployment has risen from 3.5% to 14.7% since February with nearly 15 million Americans filing for jobless benefits in the last month alone. The CFNAI hit its third-worst reading ever and that [...]
People quite often want to know what I have against the Fed’s swaps. To begin with, they are sourced by bank reserves. My co-host partner Emil Kalinowski likes to say these latter are the equivalent of laundromat tokens, an analogy I can at least get behind. They are monetary in appearance but of (extremely) limited use. Maybe a more comprehensive [...]
The Chinese are well past their trough, so there may be some meaningful interpretations for us to take from their data. Then again, we already know there’s not much there from China’s trade figures. Exercise caution, in other words.One key reason why is that China’s going to get hit with a second wave. Virus outbreak maybe, economic disruption definitely. The [...]
Technically, by showing one decimal place maybe this doesn’t exactly qualify. Then again, I was only half serious. When Mexico’s government reported earlier this week that auto production fell by almost 100% in April, I wrote it was suggestive of the great possibly lingering difficulties being forecast for the other side of this economic dislocation. Automakers, basically, aren’t buying the [...]
What connects March 2020 with February 2008 as well as the Crash of ’87 all then with the Great Contraction which initiated the Great Depression? If you said economic and financial chaos, you’d be partly right. There wasn’t really much or any of that in 1987, though there was with the other three. People including politicians and central bankers don’t [...]
iTunes: https://apple.co/3czMcWN Spotify: https://spoti.fi/3arP8mY Google: https://shorturl.at/fpsEJ Alhambra-tube: https://youtu.be/qb_ylacLPMc Twitter: https://twitter.com/JeffSnider_AIP Twitter: https://twitter.com/EmilKalinowski Art: https://davidparkins.com/ [Emil's Summary] On September 21, 1897 the The Sun, a newspaper out of New York, printed an editorial in response to a letter from eight-year old Virginia O'Hanlon. "Yes, Virginia, there is a Santa Claus," came the reply. In that tradition, Making Sense presents episode eight, in which we [...]
The monetary mouse. After years of Mario Draghi claiming everything under the sun available with the help of QE and the like, Christine Lagarde came in to the job talking a much different approach. Suddenly, chastened, Europe’s central bank needed assistance. So much for “do whatever it takes.”They did it – and it didn’t take.Lagarde’s outreach was simply an act [...]
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