It’s amazing what will be ignored or forgotten in order to try to explain the state of the world when it strays so far beyond bounded conception. Commentary views the state of economic world as wholly separate dots, disparate systems only tangentially connected through nebulous trade terms and hard currencies. The world was once that way, though perhaps even then [...]
Retail sales for June were revised upward by a significant amount, almost $2 billion, which has had the effect only of shuffling that month’s order among the worst. With higher auto sales growth, June overall retail sales were 3.31% year-over-year which remains about half of what would be considered healthy. For July, retail sales decelerated again, to just 2.86%, which [...]
In March 2013, orthodox economists were brimming with optimism. There were some rough patches in 2012, to be sure, but the Fed stepped up with a QE3 in MBS and then a QE4 in UST. Since the power of monetarism is a central pillar of the orthodox outlook, the future could only be even brighter than it was. The lackluster [...]
Not that we needed another reminder about liquidity, but the GC repo rate (indexed) for MBS on August 12 was just posted at 30.7 bps. That is the highest non-quarter or month-end rate since just before QE4 in December 2012. The UST repo rate, as well as the agency rate, was of similar proportions and comparisons at just under 30 [...]
On this side of “dollar” funding, risk continues to drain, steadily, but rather methodical about it. While China is taking most of the attention, deservedly, credit markets are not enthused about any of what has taken place. Again, I think that is more the yuan’s relation to the “dollar” than of anything else interpreted for or about the PBOC. It [...]
While everyone remains sure that the PBOC is actively trying to “allow” the yuan to depreciate as some kind of export catalyst, the “dollar” continues to show (not suggest) otherwise. Liquidity and “dollar” markets are still roiled rather than soothed, especially the US treasury market where the bid right at the open (what look very much like continued collateral calls) [...]
Productivity estimates were better in Q2 than certainly Q1, even revised, but that still doesn’t change the clear disassociation between the BLS’s version of the economy and the BEA’s. That disparity becomes even messier as the BEA’s last benchmark revision sawed off significant “output” dating back to the now-recognized 2012 slowdown. In tandem, the BLS only revised hours worked (back [...]
Petroleum sales at the wholesale level grew to a year-to-date high in June. According to the Commerce Dept.’s latest estimates, crude oil sales jumped to $48.6 billion, seasonally-adjusted, from a low in January of just $41.9 billion. Though that seems like good news for a wholesale sector under tremendous inventory pressure, it means that absent that oil price effect wholesale [...]
Everything in dollar-denomination yesterday was lifted by the usual M&A debasement and quite sour data from China. The latter was taken as if there would be renewed “stimulus” in the near term. The “dollar” took a break from its recent destructive nature, as commodities rebounded as did currency proxies and even gold. Stocks in the US and elsewhere jumped and [...]
Going back well more than a year now, every time the PBOC takes some kind of action it is classified immediately as “stimulus.” Last July, the Chinese central bank opened its PLF to China Development Bank and it was heralded as a renewed age of traditional monetarism if in unfamiliar formatting. In November, the first rate cuts since 2012 were [...]
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