The first major economic data of 2017 from China was highly disappointing to expectations of either stability or hopes for actual acceleration. On all counts for the combined January-February period, the big three statistics missed: Industrial Production was 6.3%, Fixed Asset Investment 8.9%, and Retail Sales just 9.5%. For retail sales, the primary avenue for what is supposed to be [...]
If there is still no current or present indication of rising economic fortunes, and there isn’t, then the “reflation” idea turns instead to what might be different this time as compared to the others. In 2013 and 2014, it was QE3 and particularly the intended effects (open ended and faster paced, a bigger commitment by the Fed to purportedly do [...]
To my mind, “reflation” has always proceeded under false pretenses. This goes for more than just the latest version, as we witnessed the same incongruity in each of the prior three. The trend is grounded in mere hope more than rational analysis, largely because I think human nature demands it. We are conditioned to believe especially in the 21st century [...]
Chinese trade figures for the month of February 2017 were decidedly mixed. On the import side, total trade rose by 38.1% from February 2016. That latter month, however, was one of the lowest trade figures in years (the first time imports had added up to less than $100 billion in any month going back to February 2010) as it ended [...]
US trade statistics dramatically improved in January 2017, though questions remain as to interpreting by how much. On the export side, US exports of goods rose 8.7% year-over-year (NSA). While that was the highest growth rate since 2012, there is part symmetry to account for some of it. Exports in the latter half of 2015 and for that first month [...]
The fact that China reported a small increase in official “reserves” for February 2017 is one of the least surprising results in all of finance. The gamma of those reserves is as predictable as the ticking clock of CNY, in no small part because what is behind the changes in those balances are the gears that lie behind face of [...]
Though we may think of modern economies as being modern and perhaps disassociated with some of the more primitive aspects of the past, there remain to this day seasonal fractures in economy and finance. When the Federal Reserve was created in 1913, for example, its first task was “currency elasticity” which may not have been what we think about as [...]
If there has been a lot different about the past few months, it was reflected in the TIC figures and then some. What is usually pretty easy to decipher, there were instead all sorts of shifts across the most important categories. For one, the foreign official sector was busy in December buying up UST’s and dollar assets just as the [...]
The National Bureau of Statistics (NBS) of China does not publish any of the big three data series (Industrial Production, Retail Sales, Fixed Asset Investment) for the month of January. It combines January data with February data because of the large distortions caused by Lunar New Year holidays. Unlike Western holidays that are but a single day, the Golden Week [...]
The whole point of any “stimulus” is to buy time. The idea is to keep the economy busy or, in the case of more purely monetary policy, happy during that time so that the economy on the demand side can on its own heal. In the parlance of orthodox economics, “stimulus” reduces the output gap, the difference between current output [...]
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