Building on the theme of midpoints, the current direction of the global economy, and the prospects for a Phase 2, the OECD provides us with another timely reminder about the way in which the global economy is developing. Not the good way. Releasing revised estimates for worldwide growth, the organization figures 2019 will be the slowest since 2009. In fact, [...]
With some PMI’s in the US on somewhat of an upswing, it already raises the issue of a midpoint in their trend. Given how the US data is pretty isolated in that way, could there also be midpoint decoupling? That’s what we would have to believe if the “bottom is in” folks have it right, those like Jay Powell who [...]
It was a huge sigh of relief, seen as confirmation of the word “transitory.” Oil prices in late 2014 had crashed and while globally monetary officials tried to reassure everyone it was a good thing, a supply glut giving consumers something like a tax cut, the wipeout was still unnerving. And that uneasy feeling was reinforced by forward-looking economic data [...]
Scarcely a week will go by without some grand prediction of the dollar being dethroned. Set aside how if anything is to be deposed it would have to be the eurodollar, these stories typically follow the same formulaic approach: Country X is moving away from dollar reserves, “diversifying” its holdings because of the geopolitics of Y. Usually, it is the [...]
I don’t think that was quite the message the FOMC wanted to send. It’s pretty clear what the Committee wanted to say, or wanted everyone to hear. The members are done with rate cuts because everything looks great. Sure, it all looked great to them last year but, as has become the conventional interpretation of late, hey, at least it [...]
Even though it was a stunning turn of events, the move was widely celebrated. The Federal Reserve’s Open Market Committee, the FOMC, hadn’t been scheduled to meet until the end of that month. And yet, Alan Greenspan didn’t want to wait. The “maestro”, still at the height of his reputation, was being pressured to live up to it. The Fed [...]
The Germans managed to do it, to avoid meeting the dreaded technical definition of recession. While not a meaningful one, conventional wisdom assigns the classification to any economy which features two straight quarters of declining output typically measured by real GDP. Germany’s was slightly negative in Q2 with most expectations for a repeat in Q3. Instead, deStatis reported last week [...]
The Treasury Department’s TIC for September 2019 finally arrived yesterday. Two months in arrears, it’s often torturous having to wait for the detailed cross border bank figures to show up for particularly noteworthy months. You might remember September for something going on in repo, and TIC is right where we’ve been tracking (trying to) global repo and collateral flows since [...]
Another dovish example to be put on the growing pile of good things? The People’s Bank of China (PBOC) earlier today trimmed one of its many policy rates. The 7-day reverse repo rate will be reduced from 2.55% to 2.50%, a 5 bps cut practically pointless in functional terms widely interpreted instead for its purported “meaning.” Like the Fed, the [...]
Earlier this month, the Statistics Bureau of Japan had reported an enormous surge in household outlays. For the month of September 2019, the Japanese had splurged on everything from big ticket items to regular discretionary products. Total spending in the month was up 9.5% year-over-year in real terms, an enormous increase which had been the fastest pace ever recorded in [...]
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