Stocks have stumbled into October with the S&P 500 down about 6% as I write this. The source of equity investors' angst is always hard to pinpoint and this is no exception but this correction doesn't seem to be due to concerns about economic growth. At least not directly. The most common explanation for the pullback in stocks - 6% [...]
On December 12, 2007, the Federal Reserve announced its entry into emergency “non-standard” policy measures. In a belated attempt to “address elevated pressures in short-term funding markets”, the US central bank would begin auctioning reserve funds “against the wide variety of collateral that can be used to secure loans at the discount window.” The Term Auction Facility (TAF) would become, [...]
Banks in China have to hoard liquidity ahead of their weeklong holidays, twice each year. The bigger of the two, related to the Chinese New Year, occurs in either January or February. The second, associated with China’s National Day, takes place at the beginning of every October and is still a formidable challenge to the monetary system. Depositories build up [...]
If it wasn’t before, it is definitely a slump now. The National Association of Realtors (NAR) said today that the sales of existing homes across the US in September 2018 fell more than 3% seasonally-adjusted from August. At just 5.15 million (SAAR), that’s the lowest volume in almost three years. Hurricane Harvey had managed to disrupt a good chunk of [...]
The Steering Committee for the International Monetary Fund (IMF) warned last week that tighter financial conditions globally are a risk. A bit late perhaps, but that’s how these things go. You can tell matters are serious when Economists are shaken out from their global growth slumber. The IMF wants everyone to know that this could be a danger to not [...]
China’s economy is not crashing. Hyperbole works both ways. Last year and this, the smallest increment above a prior number was broadcast out as the greatest thing ever (US wage growth in particular), irrefutable proof of globally synchronized growth. Now that that’s over with, largely, there will be a tendency toward the other extreme. The latest Chinese economic statistics are [...]
If it sounds like the United States is divided and on the verge of some really nasty times, what must it be in Brazil? In early September, Presidential candidate Jair Messias Bolsonaro was stabbed in plain sight at a campaign rally, the attack caught on video and widely circulated worldwide. It was an ugly reminder of the direction being taken [...]
It used to be that if the US sneezed, the whole world would catch cold. Placed in terms of how the global economy worked, the point was easily made that US demand pretty much directed how it would fare for everyone else. Without US economic growth, the world would surely stumble as it had throughout modern history. Apparently, this is [...]
File it under “what were they thinking?” In March 2015, confronted by a severe external monetary squeeze, the PBOC made a truly radical choice. Maybe it was that for a few months anyway things looked a little better. The eurodollar system had practically melted down globally first on October 15, 2014 (collateral) and then in December 2014 and January 2015 [...]
Somehow, the scale of May 29 keeps getting bigger. I should clarify, meaning that the very few data series that can pick up on what happened that day have had trouble picking up on exactly what happened that day. It was, to put it simply, a global collateral call of some undetermined magnitude. We know it was substantial by the [...]
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