While there is a direct relationship between the steepness of contango in the oil futures curve and the amount of crude siphoned from the market to storage, it is not an immediate one. When crude prices originally collapsed starting in late 2014, twisting the WTI curve from backwardation to so far permanent contango (of varying degrees), it wasn’t until January [...]
A few days ago I examined the relationship between the stock market PE and CPI inflation. The reason was the sudden renewed emphasis on low inflation in the context of trying to justify increasingly outlying earnings multiples in stocks. Earnings fell sharply in 2015, but prices really didn’t; there was, at most, only more volatility spread across sideways trading (even [...]
At this point, maybe it’s more like a train or car wreck whose shocking carnage compels you to keep staring at it. I still think there is, however, relevant information in IBM’s ongoing crash though I can’t deny the degree of fascination with it as almost theater. The company yesterday reported its 17th consecutive quarter of shriveling. Like a car [...]
Everyone knows about lies, damned lies, and statistics. The quote has been attached to Mark Twain who apparently attributed to British Prime Minister Benjamin Disraeli. It remains among popular clichés because there is universal truth to it, a sort of caveat emptor lying in the background whenever one consumes an argument. Nowhere is that more the truth than economics and [...]
The Chinese yuan fell again in Monday Asian trading, breaking below 6.70 for the first time. Not surprisingly, the tone to broad early trading in Europe and the US was slightly negative on what would be negative “dollar” factors. I have surmised for some time that Japanese banks have been the primary “dollar” supply for Chinese “dollar” needs, so it [...]
If you can’t get the video to play properly, the original webpage for FRA is here.
All it takes are the words “record high” and all economic or financial sins are forgiven and forgotten. The financial media cannot contain themselves whenever they get the chance to use the term, adding qualifications like “soar” and “sharply” to make sure everyone gets the message. Context need not apply because stocks are supposed to be forward-looking discounting mechanisms. However, [...]
So much of the basis for monetary policy was put in place in the 1960’s study of the 1930’s. It has become commonplace simply to assume 21st century tactics as being directly lifted from the start of the Great Depression. One of the causes of that calamity was certainly restrictive money supply, but any dereliction on the part of the [...]
Economic Reports Scorecard The response to the much better than expected employment report today is quite interesting although not in a good way. Stocks will surely get most of the attention, assuming they continue to trade higher by the end of the day (they did), but other markets - bonds and gold - are not confirming the strength of the [...]
As it currently stands in the headline BLS figures, the Establishment Survey greatly rebounded to + 287k from a downward revised +11k in May. There is this month, just as last month, too much emphasis on the monthly payroll figure as it is more often than not noise. We can only hope the drastic extremes of the past two months [...]
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