It was like a scene out of the seventies. Americans lined in their cars all over the Southeast hoping that their local filling station would have gasoline. There were documented reports of shortages as far away as the Dakotas. This wasn’t typical behavior, fortunately, so it couldn’t have been too much like the oil embargo era. Instead, in early September [...]
It’s one of those “nothing to see here” moments for Economists trying not to appreciate what's really going on in China therefore the global economy. The slump in China’s automotive sector dragged on through October, with year-over-year sales down for the fourth straight month. Auto sales last month were off 12% from a year earlier to 2.38 million, the government-backed [...]
As we watch Jay Powell’s case dissipate on NYMEX WTI right before our very eyes, we can count on his ideology to try to make it for him in the absence of actual data. Economists will not budge no matter how much stacks against them; nor how many times we have to repeat this very exercise. This will be the [...]
At the end of June, the crude curve really got out of hand. WTI futures had returned to backwardation many months before, and then the eurodollar/collateral explosion May 29 sapped some crude strength. Over the following month, curve backwardation would become extreme as the benchmark price seemed ready to skyrocket. After getting up near $80 a barrel, the price reversed. [...]
The news was one of those instances when you could see they were trying a little too hard. It didn’t make any sense, not anyway in the context to which it was delivered. On September 21, unnamed German officials were supposedly championing a megamerger in the banking sector. The country’s two largest financial institutions might be brought together to save [...]
It was a forgettable moment. The Federal Reserve’s Chairman at the time, Janet Yellen, was asked about a key economic statistic and she just couldn’t come up with it. In September 2016, Yellen was on Capitol Hill to testify as she usually did about how things were surely getting better. Rep. Frank Guinta wanted to know what that might mean [...]
It’s always a fine line for authorities. There are times when avoiding intervention is more effective than intervention. That’s particularly true when the efficacy of whatever proposed policy is in doubt. If you don’t know for sure that it will work, maybe don’t do it. There are often grave risks associated with plunging forward recklessly. In other words, officials can [...]
The effective federal funds (EFF) rate actually dipped 1 bp last Friday. Having spent the prior eight trading days equal to IOER at 2.20%, it might’ve been heartening for US central bankers under siege. After all, they adjusted that particular policy tool back in June and then in July said this whole EFF thing was due to “special factors” that [...]
In another sign of repeating 2015, the Chinese are beginning to mobilize their “reserves” again. Three years ago, in a futile attempt to staunch CNY’s stubborn “devaluation” various government authorities blew through just about $1 trillion. It didn’t work. You would think that everyone could learn from this episode. I think the Chinese did, which is why in 2017 they [...]
As always, it’s about the whole thing. A true economic boom spreads out real gains to the vast majority of the population. There will always be some proportion of people who are left out. But in the good ones, the true upswings, that share is minimal. This is the big problem right now, especially as GDP has been positive in [...]
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