The WTI futures curve is supposed to be in backwardation, though the word “supposed” is a loaded term. Backwardation is more of an ideal condition than one you might find most often in practice. There’s almost as much contango as backwardation in the futures market’s history. It’s not so easy to balance all the complexities that are spun through oil [...]
That’s the thing about these eurodollar cycles; they aren’t short. We’re conditioned on the belief that the business cycle is, or at least the recession piece. According to convention, the economy peaks and within a relatively short period of time it falls apart. The shock and its very immediate aftermath. The lengths of time involved here in the post-crisis era [...]
Germany’s Finance Minister Olaf Scholz ignited and invited controversy today when he signaled that the federal government is looking at a possible suspension to constitutional budget measures. With a nasty political fight certain to follow, even temporarily adjourning the country’s so-called debt brake would not be easy. With Chancellor Angela Merkel’s party already in a precarious position, one might wonder, [...]
Earlier today, Mexico’s Instituto Nacional de Estadística y Geografía (INEGI) confirmed the country’s economy is in recession. Updating its estimate for Q4 GDP, year-over-year output declined by 0.5% rather than -0.3% as first thought. On a quarterly basis, GDP was down for the second consecutive quarter which mainstream convention treats as a technical recession. On a yearly basis, it was [...]
When Mario Draghi sat down for his scheduled press conference on April 4, 2012, it was a key moment and he knew it. The ECB had finished up the second of its “massive” LTRO auctions only weeks before. Draghi was still relatively new to the job, having taken over for Jean-Claude Trichet the prior November amidst substantial turmoil. The non-standard [...]
It’s another example of the difficulties in trying to evaluate and analyze non-economic factors. China’s virus outbreak is a nightmare for those unfortunately living through it, and Chinese officials aren’t doing themselves any favors. Trust is a sketchy enough concept. The WHO today says there is no pandemic, which, as Erik Townsend of MacroVoices points out, immediately puts this announcement [...]
We certainly don’t have a crystal ball at the ready, and we can’t predict the future. The best we might hope is to entertain reasonable probabilities for it oftentimes derived from how we see the past. Which is just what statistics and econometrics attempt. Except, wherein they go wrong we don’t have to make their mistakes. For example, in the [...]
Shocking, perhaps, but in no way unexpected. IHS Markit didn’t just throw a wrench into all that talk about a global rebound, the organization solidly hammered a substantial nail in its coffin. According the flash estimates for February 2020, the US economy hit a skid. The manufacturing version dropped back to 50.8 from 51.9 in January. The rebound on this [...]
Being a member of the institutional “elite” means never having to say you’re sorry; or even admit that you have no idea what you are doing. For Christine Lagarde, Mario Draghi’s retirement from the European Central Bank could not have come at a more opportune moment. Fresh off the Argentina debacle, she failed herself upward to an even better gig. [...]
Making the rounds on Twitter yesterday (h/t to M. Simmons) was a quote attributed to Minneapolis Fed President Neel Kashkari. I can’t find any confirmation for it so it could be one of those fake news tweet situations. And the only reason I include it here is because it sounds like something he would say; the urge to pile on [...]
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