Gordon E. Moore had co-founded Intel and so he had unique insight into the growing computer world. The revolution required a lot more (pardon the pun) computing power, which, Moore surmised, wouldn’t be too difficult to deliver. In 1965, he had observed that innovations were leading firms like his to be able to install double the number of transistors on [...]
Rolling over in credit stats, particularly business debt, is never a good thing for an economy. As noted yesterday, in Europe it’s not definite yet but sure is pronounced. The pattern is pretty clear even if we don’t ultimately know how it will play out from here. The process of reversing is at least already happening and so we are [...]
According to Eurostat last week, Europe’s win streak reached 27 quarters in Q4 2019. If you count winning solely by the sign in front of quarterly GDP changes, then Mario Draghi handed off to Christine Lagarde an expansion just one quarter shy of seven years. It’s supposed to be impressive. Lagarde, however, begins her tenure in very much the same [...]
The ISM’s Manufacturing PMI rebounded sharply in January 2020, according to preliminary assessments. December’s figure was revised upward to 47.8 from 47.2, which had been a decade low, and that’s only where it began. The first estimate for the twenties exploded out of contraction, or what’s associated with the idea, to reach 50.8. It was the highest since last July, [...]
The boom never boomed. That’s what made the bond and money curves so flat in 2018. The data, the real economy behind the numbers, never matched the rhetoric. Even GDP. We’re in much the same position today, only starting from much weaker and worse. The rhetoric is still positive, except now it’s about a turnaround. But, and this is the [...]
The Federal Reserve added the word “symmetric” to its inflation goal for a reason. Back in May 2018 when it was made official officials made quite a big deal out of it. It was for two reasons, actually, both of them intertwined in the way Economists believe the economic system is supposed to work; and the central bank’s place in [...]
The Yield Curve Inverted! Recession is Coming! Note: We first posted this research paper in August 2019, when the yield curve inverted for the first time in the current economic cycle. Well, it inverted once again yesterday, so... Do you need to worry about the yield curve inversion? Not if you have a strategy appropriate to your circumstances. Not if [...]
Jay Powell says that three’s not a crowd, at least not for his rate cuts, but four would be. As usual, central bankers like him always hedge and say that “should conditions warrant” the FOMC will be more than happy to indulge (the NYSE). But what he means in his heart of hearts is that there probably won’t be any [...]
Headline GDP growth during the fourth quarter of 2019 was 2.05849% (continuously compounded annual rate), slightly lower than the (revised) 2.08169% during Q3. For the year, the Bureau of Economic Analysis (BEA) puts total real output at $19.07 trillion, or annual growth of 2.33% and down from 2.93% in 2018. Last year was weaker than 2017, the second lowest out [...]
While China’s coronavirus outbreak dominates Western media attention, the Chinese economy has been off for its Golden Week New Year celebrations. Unfortunate timing, to say the least. While global markets have been digesting the latest developments, domestic markets in China have been closed. Nobody really knows how they will reopen on Monday. As a consequence, the People’s Bank of China [...]
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