55.0 Live Reaction: What Central Banks Should TargetJeff Snider reacts LIVE! to a Martin Wolf column in the Financial Times. Wolf ponders what central banks should target (e.g. inflation, asset prices, social justice, nominal GDP). Incredibly at no point in the article was targeting actual money supply considered. WILD! ———SPONSOR——— But first, this from Eurodollar Enterprises! Friends, do you direct [...]
54.3 Deficits + Bond Losses + Inflation Fear = 1937? ———Part 3 Summary———In 1937, like now, circumstantial evidence and biases of central bankers suggested the impending arrival of fierce inflation: huge government deficits, better economic statistics, rising bond yields and excess bank reserves. Yet the underlying condition was of depression and credit illiquidity. ———Episode 54 Intro——— “The pen is mightier [...]
54b Trigger Warning? China's Yuan and PMI Turn Bad? ———Part 2 Summary———The appreciation of the Chinese yuan against the American dollar has paused. A survey of the Chinese services sector scored a historic low. Are these the first indications of an economic slowdown? A slowdown that is not only Chinese but global? ———Episode 54 Intro——— “The pen is mightier than [...]
54a US TIPS Curve Inverts: An Economic Warning? ———Part 1 Summary———The US Treasury inflation-protected security curve has gone upside down. Indeed, it has NEVER been more upside down. What is the Treasury market telling us about the economy's prospects? Also, how long does reflation typically last? Are we closer to its beginning or end? ———Episode 54 Intro——— "The pen is [...]
I've been getting that question a lot these days. How high can rates go? It is asked in a way that seems to imply that the answer is obvious - not much. Why? The answer is almost always the same; the Fed can't and won't let rates go up. If they did, it would kill the economy and raise the [...]
53.0 Inflation? Depends on Where You Look for ItShould speculative ventures be included in calculations of inflation? What about productive investment? Housing? All transactions? Or just consumer prices? Jeff Snider reacts to a Wall Street Journal opinion column. ———WHO——— Twitter: https://twitter.com/JeffSnider_AIPTwitter: https://twitter.com/EmilKalinowskiArt: https://davidparkins.com/ Jeff Snider, Head of Global Investment Research for Alhambra Investments with Emil Kalinowski, not spending money on haircuts. Art by Winterfell [...]
52.3 US Oil Market Update + Texas Power Credit Crisis?What does the oil market (production, demand, inventory) in the USA tell us about the economic recovery in early 2021? Also, is a power market credit crisis in Texas causing a national run on banking-system collateral? [Emil’s Summary] The theme of Making Sense Episode 52 is how an environment reacts to an [...]
52.2 Taper Tantrum II: Yield Curve Twists, Badly?The US yield curve has twisted as Bill yields fall and Bond yields rise. We review a similar situation in 2013 popularly known as "the Taper Tantrum", WHICH WAS NOT A TAPER TANTRUM! Then - like now - a collateral scramble in Bills and a relief sell-off in Bonds. [Emil’s Summary] The theme of [...]
52.1 Fedwire Breaks: Anomaly or Trigger?Fedwire, the interbank system that transmits billions between 9,000-plus members, broke on Wednesday. The Fed says, "operational error" implying mere technical trivia - an anomaly. Why do some breaks stay mere anomalies while others trigger volatile, systemic consequences? [Emil's Summary] The theme of Making Sense Episode 52 is how an environment reacts to an anomaly. [...]
DISCLAIMER: The opinions expressed within the content are solely the author’s and do not reflect the opinions and beliefs of the website or its affiliates. 51.0 Reading Around: Pettis On Tariffs and US Jobs Economic historian Michael Pettis' essay on why an "obsolete understanding of trade flows ends up pointing trade policymakers in the wrong direction." A reading, by Emil [...]
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