For all the fuss about speculators in Hong Kong, China’s central bank doesn’t seem very capable of handling them. Last week the offshore RMB money rate was driven once more to ridiculous proportions, with conventional “wisdom” attributing it to intentional PBOC policy. That seemed to be the case on Thursday, where the overnight HIBOR rate (CNH) was 38.335%, but not [...]
With two months of an increasing index, the Federal Reserve’s alternate, comprehensive factor model for the labor market turned negative again for December 2016. The Labor Market Conditions Index (LMCI) was down 0.3 points after gaining an upwardly revised 2.1 in November. Though there are 19 components in the overall index, the lackluster headline number for the Establishment Survey as [...]
Europe has not been left out of the “reflation” trend, with some seemingly good news having been reported recently. Inflation has ticked up to the highest in three years. The Harmonized Index of Consumer Prices (HICP) for the Euro Area was 1.1% in December 2016, year-over-year, the first measure above 1% since September 2013. It is easy to see oil [...]
It was announced yesterday that former New Jersey governor and one-time head of MF Global John Corzine won’t be allowed anywhere near clients in the futures business. Though a lifetime ban, the man is already 70 years old and the damage done. Perhaps there is some more comfort in the $5 million fine levied against him in addition to the [...]
There are a few parts of the payroll reports that do make sense without requiring alternative interpretation. Among these face value statistics is the estimate for manufacturing payrolls. The BLS figures that employment in the manufacturing sector peaked in July 2015 and has been declining ever so gently since then. Total job losses are just 61k over that year and [...]
The BLS reported what was on the surface another lackluster payroll report. All the headline numbers conformed to the slowed economy view of 2016. The Establishment Survey gained just 156k in December, following an upward revised 204k in November. The 6-month average, a far more appropriate interpretation given inherent statistical volatility month to month, is just 189k. The Household Survey [...]
The biggest problem with “reflation” is that it doesn’t live up to what the word is supposed to mean. That has been true in each of the past attempts at it, but is even more the case in this latest one. Yet, to hear it described is as if we are the verge of an explosion in growth unparalleled at [...]
There are times when the illusion is understandable, if still an illusion. On days like today, it surely seems like the PBOC’s power and influence has been established and displayed. The overnight HIBOR rate (CNH) was pushed to a ridiculous 38.335%, the second highest on record. And given that “drain” of RMB from offshore Hong Kong, sure enough CNY rose [...]
The FOMC minutes published today for the December 2016 policy meeting are being shopped around in much of the mainstream as “hawkish”, or at least a continuation of the “reflation” impulse. The commentary related to the more detailed window into the last monetary policy decision is being framed as if more so to that upside. Policymakers were clear that the [...]
When the FOMC first voted to taper QE, all the way back in late 2013, they did so because their modeled projections were pointing up in every way. Among the positive factors in those equations was fiscal policy that moving forward into 2014 would be far less of a “restraint.” It has been a big point of emphasis in monetary [...]
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