In late March, as global pessimism was renewed in the world’s bond markets, ECB President Mario Draghi appeared as he always does to urge optimism. Yes, Europe’s economy in particular didn’t finish 2018 as he had been expecting. But a soft patch, Draghi said, wouldn’t necessarily “foreshadow [a] serious slump.” The question on the minds of bond investors is, how [...]
Maybe central bankers are just tired of being alone. In December 2008, for example, the FOMC members were practically celebrating how the NBER finally called recession an entire year after its start. Misery does love company, especially when you botch things that badly. On Tuesday, KC Fed President Esther George admitted she and her fellow policymakers were confused. But, but [...]
Perhaps it shouldn’t come as a surprise. After all, during the first quarter of this year several key banks announced they had had enough. Goldman Sachs, Nomura, Credit Suisse, as well as others, they all broadcast cuts to key operations. The FICC stuff, or bond trading to put it euphemistically. The very place the world actually gets dollars. Only, they [...]
The Federal Reserve has been maintaining statistics on American industry for nearly as long as there has been a Federal Reserve. The first entry in the data series on Industrial Production is for the month of January ’19. Not 2019 but 1919. With over a hundred years of relatively consistent data, matching up very well with overall trends in the [...]
The Fed has its pause. The ECB is going to conduct another T-LTRO. But of all the central bank responses to the “unexpected” global weakness of late 2018, the Chinese’s was supposed to be the leader. The most forceful pushback against a worldwide downturn was reported to have been the PBOC’s “powerful” RRR cuts. China’s central bank conducted two of [...]
Before the stock market’s slide beginning in early October, for most people they heard the economy was booming, the labor market was unbelievably good, an inflationary breakout just over the horizon. Jay Powell did as much as anyone to foster this belief, chief caretaker to the narrative. He and his fellow central bankers couldn’t use the word “strong” enough. After [...]
For a lot of people, a recession is two consecutive quarters of negative GDP. This is called the technical definition in the mainstream and financial media. While this specific pattern can indicate a change in the business cycle, it’s really only one narrow case. Recessions are not just tied to GDP. In the US, the Economists who make the determination [...]
I wrote yesterday, twice, that it’s the eurodollar’s world, we are all just trying to live in it. This is not a uniformly recognized fact of life, though. People in the US are sheltered. We tend to overlook the dollar because for us it’s just the dollar. The very idea of a global reserve currency is truly foreign here. https://youtu.be/Ri6rQozA1xo [...]
People have started to look back fondly upon the Asian flu. It was as global disaster, a dollar shortage which spread all across mostly Asia but not exclusively. The reason why it is talked about positively nowadays is LTCM and rate cuts. Popular myth has it that Greenspan’s Fed properly handled any economic fallout due to the former by enacting [...]
It’s a tell-tale sign of someone who doesn’t know what they are talking about. In the realm of global currency systems, anyone who brings up China’s massive stockpile of US Treasury assets inevitably they assign all the power to the Chinese. Xi could destroy Trump if he wanted, bringing down the US in a righteous fit of trade war anger. [...]
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