Liquidity and more so liquidity preferences are vastly misunderstood for a whole host of reasons. A lot of it has to do with the dominant strains of Economics battling each other (saltwater vs. freshwater) over which statistical model fails less frequently. In shifting to mathematics and statistics, something great has been lost. Economists don’t understand how an economy works; and [...]
Can we finally put to rest all notions that the US economy is at full employment and doing well, and therefore wage inflation is right around the corner? I suspect not. This dance has been ongoing for years now, continuing through what was nearly a recession, so there is little reason to believe that economists are so data dependent. The [...]
The US Treasury as a result of the government’s bloated response to the Great “Recession” has been forced in notes and bonds to reopen their auctions each and every month. Before then, reopenings were less frequent. They weren’t infrequent, but the Treasury wasn’t just auctioning 10s every month. In 2007, for example, the Department conducted four quarterly auctions and one [...]
The Bank of Canada “raised rates” again today, this time surprising markets and economists who were expecting more distance between the first and second policy adjustments. The central bank paid typical lip service to being data dependent. It has a vested interest if you, as any Canadian reader, believe that to be a fact. But what we really find in [...]
In 1993, Stanford economist John B. Taylor wrote an influential paper that introduced the economics profession (statisticians, almost all) to what was later called the Taylor Rule. The need for such a “rule” was an unspoken outgrowth of monetary evolution. In the 1960’s and 1970’s long-established regression models estimating the influence of then-defined money on economic variables had broken down [...]
In January 2016, just as the wave of “global turmoil” was cresting on domestic as well as foreign shores, retired Federal Reserve Chairman Ben Bernanke was giving a series of lectures for the IMF. His topic wasn’t really the so-called taper tantrum of 2013 but it really was. Even ideologically blinded economists like Bernanke could see how one might have [...]
It's hard not to put all emphasis on missile tests and other serious forms of sabre rattling. Even doing so, as the bond market may be doing right now, however, misses the underlying. Everything at the moment traces back to mid-March, which in hindsight was a very eventful month in full far away from the Korean peninsula. Take, for example, [...]
The first few days of any calendar month are now flooded with PMI data. Mostly due to Markit’s ongoing and increasing partnerships, we now have access to economic or business sentiment from and for almost anywhere in the world. It isn’t clear, however, if that is a good or useful development. For example, we can see quite plainly that there [...]
The fundamental problem is that we don’t know what’s wrong. In many ways that is a worse condition because it is one step further removed from a solution. Even after ten years “we” still have to prove that the one thing everyone largely believes can’t be the depressing issue is. Earlier this year as the price of oil began to [...]
Erik Townsend welcomes back Jeffrey Snider to MacroVoices. Erik and Jeffrey discuss: How Dollar becomes ‘Dollar’ -Bankers’ Acceptances -The Evolution of Eurodollars -Where do Eurodollars come from? -Money as interbank liabilities -What exactly are Eurodollars? -Transformation of banking into a wholesale model
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