depression

Now You Tell Us

By |2017-04-18T12:49:37-04:00April 18th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As we move further into 2017, economic statistics will be subject to their annual benchmark revisions. High frequency data such as any accounts published on or about a single month is estimated using incomplete data. It’s just the nature of the process. Over time, more comprehensive survey results as well as upgrades to statistical processes make it necessary for these [...]

Assessing China’s Economic Risks

By |2017-04-17T19:25:05-04:00April 17th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

First quarter GDP in China rose 6.9%, better than expected and above the government’s target (6.5%) for 2017. It stands to reason, however, that if Communist officials thought they could get 6.9% to last for the whole year they would have made it their target, especially since 6.5% would be less than the GDP growth rate for 2016 (6.7%). In [...]

Transitory

By |2017-04-17T18:02:25-04:00April 17th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I suspect that Federal Reserve officials would prefer to not speak about inflation, nor ever again be asked about it. When oil prices first crashed at the end of 2014, they said it was a “transitory” phenomenon not worthy of much attention. Or if it was to be given some consideration, it was a benefit to consumers, another positive “tailwind” [...]

The Expanded Retail Sales Gap

By |2017-04-17T16:10:55-04:00April 17th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Retail sales growth in February 2017 was going to be low by virtue of its comparison to February 2016 and the extra day in that month. The Census Bureau’s autoregressive models are supposed to normalize just these kinds of calendar irregularities so that we can make something close to apples to apples comparisons. The seasonally-adjusted estimate for February, however, was [...]

What Was Chinese Trade in March?

By |2017-04-13T16:52:34-04:00April 13th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As with all statistics, there are discrepancies that from time to time may obscure the meaning or validity of the particular estimate in question. For the vast majority of the time, any such uncertainties amount to very little. Overall, harmony among the major accounts reduces the signal noise from any one featuring a significant inconsistency. There are, of course, various [...]

Is It Other Than Madness?

By |2017-04-12T18:55:01-04:00April 12th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As earnings season begins for Q1 2017 reports, there isn’t much change in analysts’ estimates for S&P 500 companies for that quarter. The latest figures from S&P shows expected earnings (as reported) of $26.70 in Q1, as compared to $26.87 two weeks ago. That is down only $1 from October, which is actually pretty steady particularly when compared to Q4 [...]

Optimal Lunacy

By |2017-04-12T18:04:40-04:00April 12th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In June 2012, Janet Yellen, then the Vice Chairman of the Federal Reserve, addressed an audience in Boston with what for the time seemed like a radical departure. It was the latest in a string of them, for conditions throughout the “recovery” period never did quite seem to hit the recovery stride. Because of that, there was constant stream of [...]

An Inside Basis For Unfortunate Continuity

By |2017-04-12T15:48:53-04:00April 12th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Primary dealer holdings of UST securities have been on the rise again. This sort of warehouse activity is drastically misunderstood, exemplified best when last year around this time surging dealer inventory was blamed on those banks’ purported inability to sell off their holdings. It was an absolutely absurd idea for several reasons, but most prominently the overwhelming demand at the [...]

A Lot of Noise Where Noise Really Shouldn’t Be

By |2017-04-11T18:27:42-04:00April 11th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Since there isn’t any detectable acceleration in wages or earnings, the plateau across the JOLTS data dating back to various points in 2015 is therefore not likely to be related to the presumed end of labor market slack. Even if the unemployment rate were a valid and relevant interpretation of “full employment”, there would be no reason why businesses might [...]

‘Reflation’ Breakdown, This Time Without Interruption

By |2017-04-11T16:16:52-04:00April 11th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In the early trading on Friday, it looked as if “reflation” might break down entirely. The flurry of information seemed to be uniformly bad, from Syria to payrolls there wasn’t much for optimism to remain relevant. All of a sudden, however, it all reversed so that trading in the latter part of the day was as if related to an [...]

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