What is truly frustrating is that only now is the world trying to come to terms with the last ten years, and only because it ignored the major, seismic developments over the preceding forty. It’s not a question of too little, too late, it’s more so that after being bludgeoned with failure there are no leaps of intuition, merely baby [...]
One of the most prominent features of the “rising dollar”, if not the “rising dollar” itself, was an almost out of control shortage in FX basis. Though cross currency basis swaps with Japan received all the attention, with very good reason, the basis was off against the euro, franc, and a host of other majors. These things happen from time [...]
TIC data confirms that “reflation” captured more than just pricing sentiment. It appears to have occurred in bank balance sheet activity, and related official sector UST transactions. As to the latter, official holdings of US$ assets did decline on net in March 2017, the latest figures, including more selling of UST’s. The scale of the decline was less than we [...]
Despite a lower calculated inflation rate for April 2017, Real Average Weekly Earnings were only just positive for the month year-over-year. As the CPI had moved higher on the base effects of oil prices, real earnings were forced negative in each of the three prior months. The reason is, as always, no acceleration in nominal wages or earnings. None. Given [...]
Industrial Production rose sharply in April 2017, up nearly 1% month-over-month (seasonally-adjusted). It was the largest single month increase since February 2014 during the depths of the Polar Vortex. Steady contributions from the oil sector as well as a rebound (of sorts) in Motor Vehicle Assemblies added to the gains. Year-over-year, IP was up just 2.2% in April despite the [...]
As I so often write, we still talk about 2008 because we aren’t yet done with 2008. It doesn’t seem possible to be stuck in a time warp of such immense proportions, but such are the mistakes of the last decade carrying with them just these kinds of enormous costs. It has been this way from the beginning, even before [...]
The rebound in commodity prices is not difficult to understand, perhaps even sympathize with. With everything so depressed early last year, if it turned out to be no big deal in the end then there was a killing to be made. That’s what markets are supposed to do, entice those with liquidity to buy when there is blood in the [...]
Chinese economic data for April 2017 has been uniformly disappointing. External trade numbers resembled too much commodity prices, leaving an emphasis on them rather than actual economic forces. The latest figures for the Big 3, Industrial Production, Retail Sales, and Fixed Asset Investment, unfortunately also remained true to the pattern. Industrial Production had seemingly accelerated in March, rising to a [...]
The average annual change in the WTI benchmark price was in April about 25%. That was still a sizable increase year-over-year, and just marginally less than March’s average of 33%. For calculated inflation rates, it represents the last of the base effects that have to this point made it appear as if economic improvement was possibly serious. Combined with the [...]
Retail sales estimates are not adjusted for inflation, but even so whenever they get down toward the 3% growth level you can be sure there is serious economic trouble. The 6-month average for overall retail sales dropped below 3% in March 2001, the month that marked the start of the official dot-com recession (though that is not the official name [...]
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