Unlike the headline Establishment Survey, the rest of the economic data isn’t surging like it’s 2014 all over again. On the same day the BLS issues the next blowout payroll report, the Census Bureau suggests instead US demand, at least for goods produced overseas, continues to decline at a precipitous pace. Seasonally-adjusted, there had been something of a rebound in [...]
The Federal Reserve has been trying to propagate two big lies about the economy. Actually, it’s three but the third is really a combination of the first two. To start with, monetary authorities have been claiming that growing liquidity problems were the result of either “too many” Treasuries (haven’t heard that one in a while) or the combination of otherwise [...]
Take your pick, apparently. On the one hand, IHS Markit confirmed its flash estimate for the US economy during February. Late last month the group had reported a sobering guess for current conditions. According to its surveys of both manufacturers and service sector companies, the system stumbled badly last month, the composite PMI tumbling to 49.6 from 53.3 in January. [...]
Taking another look at what I wrote about repo and the latest developments yesterday, it may be worthwhile to spend some additional time on the “why” as it pertains to so much determined official blindness, an unshakeable devotion to otherwise easily explained lunar events. The short version: monetary authorities as well as the “experts” describe almost perfectly risk averse behavior [...]
When you focus exclusively on bank reserves, even when the answer is staring you in the face you just can’t appreciate it or decipher the implications. Nearly six months later, they still don’t know what happened in the repo market last September. By “they” I mean, of course, the Federal Reserve including all the presumably technically proficient operators at its [...]
Well, that wasn’t he had in mind. The whole point of a rate cut, any rate cut let alone an emergency fifty, is to signal especially the stock market that the Fed is in the business of…something. The public has been led, by and large, to assume that something good happens when the Fed Chair shows up on TV. If [...]
It’s interesting what the eurodollar futures curve has done today. Over the past several weeks, of course, the curve has collapsed though with much more focused buying at the front end of it. That’s understandable given the common scenario being priced in – that the Fed will reluctantly be forced into sizeable rate cuts very soon. In fact, the current [...]
There were only two possibilities and both related to their release. Either the Communist Chinese government was going to delay them, or would just say, screw it, everyone knows they’re going to be bad so let ‘em fly. There weren’t any questions about the data itself. Sure enough, the first glimpse at China’s economy in its full virus effects was [...]
With interest rates tumbling all over the world, gold should be killing it. Instead, gold is getting killed. The major correlation for this precious metal has been the bond market, falling yields. And that makes intuitive sense; gold as a hedge pays no interest, but if competing safety instruments like UST’s end up paying up a lot less then gold [...]
It’s really not hard to appreciate why markets are freaking out right now. The economic narrative is, and has been, all wrong. Jay Powell says that faraway overseas pressures had taken just a little off what had been awesome economic growth. Despite what had become an obvious drag on trade and manufacturing, the unemployment rate, to Powell, spoke softly to [...]
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