What if Germany’s economy falls into recession? Unlike, say, Argentina, you can’t so easily dismiss German struggles as an exclusive product of German factors. One of the most orderly and efficient systems in Europe and all the world, when Germany begins to struggle it raises immediate questions about everywhere else. This was the scenario increasingly considered over the second half [...]
It is absolutely amazing the lengths people will go to in order to deny the most straightforward and obvious explanation; to torture and twist plain evidence. That’s the thing about rationalizing, though. The narrative usually matters more than the facts. Take tax reform and interest rates. The problem with tax reform wasn’t actually tax reform. The Tax Cuts and Jobs [...]
Toward the end of June, Chinese RMB money markets seemed like they had weathered the worst of it. One month earlier, in late May, regulators had seized Baoshang Bank Co. sending waves of uncertainty rippling through markets in China and around the world. Authorities were quick to declare “nothing to see here”, blaming the bank’s close relationship with absentee billionaire [...]
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 [...]
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