Economists setting their expectations for China and PBOC “stimulus” should have been paying attention to retail sales; not Chinese retail sales, but American. They keep seeing a rebound that just doesn’t exist. US consumers, as the central marginal marketplace for the world economy of goods, have steadfastly refused the invitation of the unemployment rate to produce a worldwide economic resurgence. [...]
For the most part in 2016 retail sales had been better. “Better” is, of course, a relative term, and despite intentional colorization with respect to these types of economic accounts doesn’t automatically equate to “good.” Consumer spending data throughout 2015 was simply atrocious, not just on par with past recessions but among some of the worst months in the history [...]
On Wednesday, October 8, 2008, the FOMC voted for an emergency 50 bps cut in the federal funds rate, bringing it down to 1.50%. The day prior, the Fed announced that it would be buying short-term debt from businesses after suggesting the day before that it would fund up to $300 billion for “bad” assets. The Friday before that, Congress [...]
It’s not an exact fit or correlation, but that’s not the point. One follows the other, though the manner in which they relate is outside of any view. The point here is common sense, unclouded by the increasing absurdity with which this simple relationship is denied: Repo fails are an indication of collateral “tightness.” Dealer net long inventory is an [...]
Though the media rushes to defend it as benign but prudent regulatory changes, there is going to be fallout from rising LIBOR “tightness.” And it will likely start where it can be least afforded, especially after last year’s rout. Payments on floating rate loans issued by dozens of companies are set to increase as US dollar Libor for a period [...]
Basic economics has proven that when the supply of something dwindles, absent an offsetting drop in demand the price should rise. When translating these fundamental terms to the labor market especially of the past few years, the supply means “slack” or the available pool of workers not yet working; demand has been, we are told repeatedly, very robust; therefore the [...]
The fact that we are still discussing illiquidity in “dollar” markets everywhere shows just how little has changed despite so much time and effort. It is August 9 again, the ninth anniversary of the day that changed everything. Even though it has been almost a decade, it’s as if “we” learned nothing from the experience. There are indications in 2016 [...]
Wholesale sales for June 2016 declined slightly, -0.6%, year-over-year. Since February, sales have flattened out in unadjusted terms. Seasonally-adjusted, wholesales sales rose nearly 2% from May 2016, and are up $17 billion from February. Of that increase, however, $11.5 billion was petroleum alone. Taking out the volatile swings in oil and oil prices, wholesale sales ex petroleum have been stagnant [...]
On June 6, Janet Yellen spoke to the World Affairs Council of Philadelphia in what were highly scrutinized comments. The occasion was just a weekend in between the May payroll report that clearly unnerved her and the rest of the FOMC. Prior to that BLS publication, it was believed that a rate hike in June was all but set. Afterward, [...]
The Federal Reserve carefully notes that its Labor Market Conditions Index (LMCI) is subject to revisions in as much as its entire history almost every month. That is the nature of the project trying to tie together 19 separate data points into a coherent yet comprehensive whole. Part of the inherent recurrence of revisions, however, is simply the pace of [...]
Stay In Touch