The problem with sentiment surveys is, as I am becoming a broken record, that they don’t often mean what they are taken to mean. At best, they are relative measures of changes and potentially, if captured and refigured just right, inflections. With innumerable problems encapsulated into not just their construction but the idea of a PMI in the first place, [...]
Repo rates absolutely surged at month-end, LIBOR jumped a few more basis points and the eurodollar curve is bid almost everywhere in large chunks. Commodities continue to get smashed, especially crude oil, and currencies are devaluing in almost equally large portions. Even the treasury market is somewhat sporting the tell-tale collateral calls. In short, the “dollar” problems continue into this [...]
The latest FOMC policy statement was dominated by a single, added word; “some.” As far as actual policy maneuvers I doubt it will make much of a difference, but it certainly adds more flavor to the growing evidence the US economy isn’t anywhere near close to what it should have been by now. In other words, even the mainstream economic [...]
Since the beginning of the year, the S&P 500 Index (IVV) has been trading within a range of 150 or so points; just bouncing from one end of the range to the other, sometimes in dramatic fashion. Last week it did more of the same, bouncing off the 200-day MA before hitting resistance at the 2115 level. The S&P 500 is up 3.43% year-to-date. The [...]
Headlines a few years back were about China's need to re-balance their economy away from a heavy reliance on exports and toward domestic demand. The thesis says that self-reliance will lead to a less volatile economy and lower cost of capital. China is succeeding with this goal, but the path is initially a very bumpy road. The MSCI China index [...]
It was back in 2009 that Bill Gross coined the term New Normal to describe the post-crisis US economy. That economy is marked by a reduced willingness to take risk in the private sector for a variety of reasons. No interest rate is low enough to induce corporate spending in an environment where aggregate demand continues to disappoint. In a [...]
Economic reports scorecard 7/20/15 - 7/31/15 The economic data releases since my last update were a bit better than expected but as the GDP report showed, the US economy continues to plod along at a disappointing pace. In fact, the GDP report was, in my opinion, not as good as the headline with investment a particularly disappointing aspect. I would [...]
Top News Headlines Chinese stocks plunge, then stabilize Linn Energy shows shale bust isn't over Whole Foods stock hammered on earnings Twitter beats estimates, stock makes 52 week low Gold stops going down Economic News Durable goods orders rebound, still down almost 3% year over year Dallas Fed improves but still negative Case-Shiller shows surprising weakness in home prices Richmond [...]
On January 15, the Swiss National Bank suddenly and without warning removed the franc’s peg to the euro. Months later, there is still much confusion as to why they acted, including some of the usual doctrinaire assessments that take no account of wholesale “dollar” reality. In other words, the SNB was explicit on January 15 though nobody apparently listened. The [...]
Sticking with purely financial expression of the eurodollar standard it is easy at times to forget such monetary influence has very real consequences. That is true in the US in particular, as even though the recovery is both deficient and waning it isn’t the disaster it is in other, connected places. It was, after all, the rise of the eurodollar [...]
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