Whether or not a full-scale recession shows up in the US is an open question. There’s less of one in US industry. The “manufacturing recession” we last saw of Euro$ #3 is becoming clearer as a repeat property in Euro$ #4. According to the Federal Reserve, May was a relatively good month for industry – total output didn’t decline from [...]
Much of the original thesis on economic decoupling surrounded myths of what were believed invulnerable economies. Emerging markets might see some slowing during 2008, but they weren’t supposed to drop off. China was right at the top of everyone’s list, the unstoppable force then transforming the world’s political as well as economic order. In the early months of the Global [...]
Retail Sales rose just 3.46% year-over-year (unadjusted) in May 2019. The estimate for April was revised substantially higher, now suggesting growth of 5.6%. Altogether, however, consumer spending continues to be unusually weak. How unusual? The 6-month average, a better gauge of growth conditions given the noisy nature of the series, is now below 3% for the first time since late [...]
Once you realize negative yielding sovereign bonds aren't investments, they are balance sheet tools for global banks, things start to fall into place. I had the honor to chat with the fellas at Grant's Interest Rate Observer. In a world where stocks are the media kings it's good every once in a while to talk to people who know better. [...]
Rate cuts will be insurance against whatever “trade wars” will throw at the global economy. That’s the current line from monetary officials in the US, anyway. The real question to ask is, how would they know? Starting with trade wars. Is that really what’s behind all this? The evolution of the curves told you everything you need to know, and [...]
There are those which are so very clear in their disingenuousness – to the point of overdoing it and becoming obviously absurd. In the increasingly desperate rush to downplay the headlong race to rate cuts, this one’s up there: Eurodollar futures traders, having decided that the Federal Reserve is likely to cut the fed funds target range at least twice [...]
As noted earlier this week, the world’s two big hopes for the global economy in the second half are pinned on the US labor market continuing to exert its purported strength and Chinese authorities stimulating out of every possible (monetary) opening. Incoming data, however, continues to point to the fallacies embedded within each. The US labor market is a foundation [...]
It's the nature of the business, on my end, anyway. Talking, writing, speaking incessantly about the effective global reserve currency puts me more in touch with folks from outside the US. People in the rest of the global economy see and feel the effects of that currency system far more and more directly than we Americans do. It is one [...]
Inflation always brings out an emotional response. Far be it for me to defend Economists, but their concept is at least valid – if not always executed convincingly insofar as being measurable. An inflation index can be as meaningful as averaging the telephone numbers in a phone book (for anyone who remembers what those things were). If you spend $1,000 [...]
Commodity prices continued to fall last month. According to the World Bank’s Pink Sheet catalog, non-energy commodity prices accelerated to the downside. Falling 9.4% on average in May 2019 when compared to average prices in May 2018, it was the largest decline since the depths of Euro$ #3 in February 2016. Base metal prices (excluding iron) also continue to register [...]
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