No, no, no. Everything is awesome. The denials have spread faster than the market prices have changed. Globally synchronized growth did a number on a number of people. I really think it a function of time. It has been so long since we’ve seen economic growth, real economic growth, that so many just believe it has to happen because it [...]
Europe is a total mess, no one can (honestly) argue otherwise. But that’s just Germany and France, right? PMI’s in those countries were a disaster. Those reported for the US weren’t really all that bad. Weaker, sure, hardly the obvious sinking especially when compared to German manufacturers. IHS Markit’s flash US Manufacturing Index for March 2019 was 52.5. This was [...]
If “rate hikes” and QT are the world’s big problem in 2019, then why is the FOMC announcing the end of “rate hikes” and QT failing to have a positive effect? The answer will surprise most people. Central banks, dominated by central bankers who are Economists, meaning statisticians, are always behind. They do not lead. Monetary policy, which has no [...]
Quick review: stocks hit a bit of a rough patch right during the height of inflation hysteria. At the end of January 2018, just as the US unemployment rate had finally achieved the very center of attention, global markets were rocked by instability. Unexpectedly, of course. Over the next several weeks, share prices sagged and people blamed it on a [...]
Everyone went dovish after what happened in December. Convention assumes that central bankers take their cues from the NYSE. I don’t think that’s what shook everyone up, though. Curves, ladies and gentlemen. The bond market revolted and the stock market showed serious signs of catching its contagion. Since the mainstream had been expecting a booming economy, because that is what [...]
The Chinese warned the world all the way back on October 8. The PBOC cut the RRR for a third time this year. Require reserves really had little to do with what was, and is, going wrong. Because the dollars just aren’t flowing to China. They didn’t last year, either, at least not directly (HK) even though CNY rose as [...]
For Janet Yellen, during her somewhat brief single term she never made the same kind of effort as Ben Bernanke had. Her immediate predecessor, Bernanke, wanted to make the Federal Reserve into what he saw as the 21st century central bank icon. Monetary policy wouldn’t operate on the basis of secrecy and ambiguity. Transparency became far more than a buzzword. [...]
June 13 sticks out for both eurodollar futures as well as IOER. On the surface, there should be no bearing on the former from the latter. They are technically unrelated; IOER being a current rate applied as an intended money alternative. Eurodollar futures are, as the term implies, about where all those money rates might fall in the future. Still, [...]
We’ve been here before. Economists and central bankers become giddy about the prospects for success, meaning actual recovery. For that to happen, reflation must first attain enough momentum. If it does, as is always forecast, reflation becomes recovery. The world then moves off this darkening path toward the unknown crazy. The problem has been that officials mistake reflation for what [...]
I have to hand it to my colleague Joe Calhoun. In recent months, he’s been able to almost perfectly predict the Trump Administration’s response tactics to all this trade war stuff. Back in July, it was mere comments on the dollar. Not long thereafter, aid to farmers caught up in the China dispute. When that happened, Joe predicted it wouldn’t [...]
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