Stagflation. It's a word that strikes fear in the hearts of investors, one that evokes memories - for some of us - of bell bottoms, disco, and Jimmy Carter's American malaise. The combination of weak growth and high inflation is the worst of all worlds, one that required a transformational leader and a cigar-chomping central banker to defeat the last [...]
I may have to rethink my opinion of Christine Lagarde. It just may be that after helming one serious debacle after another, she – unlike most in her position – may have learned a thing or two about being too quick to call it a day. Premature celebrations were the hallmark of central banks throughout the last fifteen years, including, [...]
This must be what the NBER feels like. That group of academic Economists simply took up the job of “declaring” each end of the business cycle. No one seems to have asked them to, nor was there any mandate official or otherwise. Sensing the opportunity, believing the job in keeping with the organization’s competence, or self-assessment of it, the NBER [...]
One other fascinating, corroborating angle to the short run picture comes at us from Europe, specifically Germany. As illustrated yesterday, there’s a whole bunch of market prices/indications from around the world which have keyed in on February 24-25 as a possible turning point. The most obvious candidate which may have triggered it would be February 25th’s major US Treasury selloff. [...]
The company isn’t bankrupt, it just doesn’t have the right currency in its reach to repay debts coming due. YPF is Argentina’s (former) gold mine, in this case the black gold of energy exploitation. State-owned, the business has obviously close ties to the ruling powers-that-be and a privileged place to go along with them. Its formal name, Yacimientos Petrolíferos Fiscales, [...]
Last week, IHS Markit reported that sentiment in Mexico’s factory sector had slipped again during December 2020. The organization’s manufacturing PMI had declined for the second straight month, having peaked recently back in October. Even then, the index hadn’t yet come close to crossing the magic 50 dividing line. The best it had managed during this global rebound was a [...]
On December 3, 2015, Europe’s central bank, the ECB, supposedly disappointed markets especially those trading European equities. Losses were large because Mario Draghi’s gang of policymakers merely extended its first QE rather than accelerating the pace of purchases. Investors, such as they were, had been told to expect more than that. To make matters worse, according to the mainstream narrative, [...]
Back last June, the dollar had broken its upswing. DXY, one major dollar index, had fallen sharply as had most if not all of the rest. This one had given up most of its “gains” in a relatively short period. That said, to some, the greenback had definitely hit its high. All downhill from there. It didn’t help, supposedly, that [...]
Between the summer of 2011 and February 2012, the unemployment rate experienced its largest half-year drop since the huge recovery that had been taking place in 1984. It was a very welcome sign that the US economy may have avoided becoming entangled in the global funding messes of 2011. Caught flat-footed, as always, Ben Bernanke’s Fed had ended QE2 at [...]
As France’s Finance Minister, Christine Lagarde objected strenuously to Ben Bernanke’s second act. Hinted at in August 2010, QE2 was finally unleashed in November to global condemnation. Where “trade wars” fill media pages today, “currency wars” did back then. The Americans were undertaking beggar-thy-neighbor policies to unfairly weaken the dollar. The neighbor everyone though most likely to be sponged off [...]
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