The status of durable goods in May 2017 appears to be up for debate. Once more there is major disagreement between the seasonally-adjusted figures and those unadjusted. In the estimation of the latter, May was a relatively good month for US manufacturing. Orders were up 7.3% year-over-year, the highest growth rate in nearly three years. It continues the track of [...]
To complete a trifecta, maybe someone could interview Alan Greenspan about rational exuberance. The last of the latest Fed Chairmen, Janet Yellen, purports today that the next financial crisis will not be in “our lifetimes.” The issue, however, isn’t even crisis so much as credibility. Given that she and the rest of them had no idea about the last one [...]
The IMF like so many others appears to have been caught up in “reflation.” Its models had in its April 2017 WEO outlook upgraded US growth prospects for the first time in a long time. In their final 2016 WEO, the institute projected US real GDP growth of 2.20% for calendar year 2017, and then just 2.10% for calendar year [...]
People often ask why I care so much about China. In some ways the answer is obvious, meaning that China is the world’s second largest economy (the largest under certain methods of measurement). Therefore, marginal changes in the Chinese economy are important to understanding our own global situation. But it goes much deeper than that. I have described my own [...]
Returning to the theme of the parallel evolutionary developments in the early 20th century as compared to the last decades of it, in 1908 famed Gilded Age industrialist Andrew Carnegie wrote what seems today a misplaced article for New York Outlook magazine. The steel magnate lamented the state of American banking, which he called within his piece “at least one [...]
According to the US Treasury, the calculated equivalent treasury bill yield for the 4-week maturity was 76 bps at Friday’s close. At such a short time frame there isn’t actually a single instrument that creates the rate, more of an amalgamation (spline) of various 4-week securities staggered on their own. The bill maturing this week, for example, closed last week [...]
The Phelan Act of 1920 sounded simple in principle. It authorized the various Federal Reserve Banks, at that time twelve district branches operating independently, to charge progressive interest rates on the rediscounting activities at their respective windows (the discount rate was the interest charged to obtain collateralized funds from the various reserve banks). Private banks in each district were given [...]
When the price of oil first collapsed at the end of 2014, it was characterized widely as a “supply glut.” It wasn’t something to be concerned about because it was believed attributable to success, and American success no less. Lower oil prices would be another benefit to consumers on top of the “best jobs market in decades.” That may have [...]
In the strict cohort of central bankers, at least the Fed isn’t yet the Bank of Japan. The BoJ is run by straight clowns, a sort of weird performance art maybe due to almost thirty years of accomplishing nothing. Federal Reserve officials can at least manage to sound legitimate if still acting without success. In the grand scheme of things, [...]
After the Fed “raised rates” a little over a week ago, the US treasury market responded with another collective shrug. Long-term rates fell rather than rose, having already responded that way to the prior two hikes. The word “conundrum” has sadly been revived. It is unfortunate because treasury market behavior in the middle of the last decade was never a [...]
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