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 [...]
China’s Foreign Exchange Agency reported a $12 billion drawdown in that country’s foreign “reserves” holdings during January 2017. That was considerably less than the past three months, where all three saw more than $40 billion pulled out, nearly $70 billion in just November. These results are not in any way surprising, and are actually quite consistent with observed behavior during [...]
US exports grew by 5.6% year-over-year (NSA) in December, the fourth gain in the past five months. It was the highest growth rate since October 2013. On the incoming trade side, imports advanced 2.4% year-over-year after rising 5.1% in November. Those were the first consecutive monthly increases since the last two months of 2014. The trade figures add further evidence [...]
The only unequivocally positive aspect to the looming “stimulus” debate is the immense political theater it will generate, and has already generated. Hypocrisy will be standard fare, and in any number of ways. For every Occupy Wall Street Obama supporter who found himself likely for the first time in his life enthusiastically embracing “record high stocks” in 2013 will now [...]
From the outside, it appears as if Wall Street operates like a bureaucracy. There is an enormous amount of paperwork, endless committees who conduct endless meetings, and layers of management supposedly managing the movement of that paperwork as well as the meetings of those committees. The idea is simple enough, to make it appear as if there is tremendous weight [...]
For Ben Bernanke, characterizing a successful tenure is exceedingly hard. Afterward writing a memoir about his time at the Fed, however, made such a task a necessary one. Given so few options from which to define his legacy, the former Chairman decided very carefully about how to frame his efforts. And still all he could come up with was a [...]
If you are an enterprising financial firm with spare cash toward the end of the business day, you have several options for it. Primary among them is the Fed’s Reverse Repo (RRP) desk which will pay you 50 bps interest with your cash secured by both the reputation of the Federal Reserve as well as UST collateral. Given that option, [...]
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