The British manufacturing sector pulled the English economy into contraction for the first time since 2012. Real GDP declined by 0.2% Q/Q in the second quarter of 2019, another minus sign to add to the growing global list. Goods production fell sharply, down 2.3% in Q2 from Q1. It was the biggest decline since 2009. And it is being blamed [...]
The anniversary actually seems more poignant with each passing year. You would think it would be easy to get used to it, or at least become numb and normalized for the deep inflection it had represented. But the more everything stays the same the closer you are pulled to going back in time and rethinking things from the start. How [...]
On the one hand, it’s a small silver lining in how many even in the mainstream are beginning to realize that there really is something wrong. Then again, they are using “trade wars” to make sense of how that could be. For the one, at least they’ve stopped saying China’s economy is strong and always looks resilient no matter what [...]
Any recession still retains its inventory roots. Back when manufacturing ruled the US economy, an unanticipated buildup would be all it took to trigger one. Goods would begin stacking up on the wholesale level once retailers found it harder to move what they already had. This in turn caused wholesalers to put the brakes on manufacturing which then triggered production [...]
Supply glut or demand disappearing? We are back to asking that question again after four years. In late 2014 and early 2015, the conventional answer was shale. The US had begun producing so much oil there was a glut of supply. Without an outlet for it, all the crude began building up primarily in Cushing, OK. All that was true [...]
It’s another one of those things that just blows up the whole convention, another pretty clear sign that the mainstream has it all backward. We are seeing it play out right now with China. The Chinese are being accused of unfair currency manipulation, the sort of “competitive devaluation” that fills whole chapters in the Keynesian Economics textbooks. The idea is [...]
The JOLTS series had always been a seemingly superfluous set of labor numbers for the Bureau of Labor Statistics (BLS). The agency wanted to go deeper into employment when it originally presented these other series in 2002. The unemployment rate seemed accurate enough, but it came at the labor market solely from the view of labor supply. As the BLS [...]
As of today’s close, there are only 22 trading days in the entire history of Japan’s government bonds (JGB) where the yield (or “yield”) on its 10-year paper has been more negative. Those 22 all came clustered together in June and July 2016. In other words, Japan’s bond market is today comparable only to that one period at the utter [...]
Right on cue, the Chinese have restarted “devaluation.” Because no one ever learns, and because trade wars are a conveniently timed distraction, CNY’s dramatic plunge below 7.00 is being written up as currency manipulation. It is manipulation, just nothing like what’s being described. PBOC Governor Yi Gang is a passenger here, not the man pulling the levers behind the scenes. [...]
We’ve got repo, erratic federal funds market, German 2s correlated with it, plunging bond yields, angry swaps (IR and FX), and economic data increasingly and more speedily in the wrong direction. Overseas official entities piled even more into the foreign repo pool, their payments dollar buffer, another definitive sign of a much more acute dollar shortage worldwide. Is it even [...]
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