Lost in the euphoria over second quarter GDP revisions is the ongoing corporate struggle in terms of profits and how that suggests a more than reasonable proportion of GDP’s ability to measure the economy is overstated. To this point, I had focused more so on the productivity problems as they related to a potential over-optimism of the labor market but [...]
It seems increasingly to dawn on Chinese commentary that there is much more going on than “devaluation.” The latest has drawn in the Chinese hoard of UST assets, as it is clear that China is “selling” them though there is great confusion as to why or even what that actually means. The world of forex “reserves” is a bit more [...]
At some point, these continuous divergences between seasonally-adjusted extrapolations and unadjusted year-over-year comparisons will cease to provide so much apparent relief. Time after time, the smallest jump in the monthly variation is taken as cause for completely discarding all prior economic worries even though the more measured and consistent unadjusted growth rates continue to press downward; especially since time and [...]
To illustrate just how badly Monday’s selloff (and yesterday’s late day reversal) seems to have shaken core confidence in the overriding narrative (ALL IS WELL!) you need only view the drastic reversal on what stock prices supposedly mean. With QE’s producing little or no tangible economic benefit, certainly nothing specific with which its proponents can easily point to, they have [...]
Lost in all the stock market focus is the renewed disaster being signaled across credit markets, “inflation” expectations in particular. Here oil prices and the “dollar’s” darkening intersect with credit and broad financial settings. Quietly, market-based measures of the anticipated future “inflation” path have crashed. Inflation breakevens in TIPS hedging were as low yesterday as the lowest point from January [...]
I think broad trading today actually confirms yesterday’s hypothesis of the marked appearance of fear. In reversing exactly (or nearly so) almost everything from yesterday, across the board, it seems as if the juxtaposition settles that interpretation. I noted that it wasn’t just gold bid in contrast to the selling and “dollar” frenzy, the Swiss franc had joined on the [...]
I know there is tendency for shorthand in media, especially print, but there comes a time when bland or rote description is not just inappropriate but highly misleading. Obviously, all attention is focused on the PBOC not just in turmoil but in how the central bank responds. To say that frustration is brewing is a gigantic understatement especially from the [...]
This will surely help gain a better understanding of "Black Monday": https://twitter.com/SenSanders/status/635801037597736960 If there is one thing this "market" is screaming right now it is too much free trade. Then again, with central banks and Wall Street (redundant) passing themselves off as the one true inspiration for capitalism this confusion is actually understandable in a Kindergarten sort of way: These [...]
Going all the way back to before last year’s Jackson Hole conclave, it was clear that there was inordinate trouble in the economy and global markets even though the central focus then was on how quickly to “normalize” everything and anything. The economy was assumed unassailably terrific and markets only reinforced that idea. The problem then, as now, was that [...]
Repetition is the signal of the unnatural. With stock prices moving back toward a positive daily trade, such immense volatility in what was surely a junior flash crash will be swiftly discharged as unimportant; the bull must stand. The NASDAQ at one point this morning was down to 4292 and the DJIA off about 1,000 points at the worst. And [...]
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