One year ago today, something huge broke inside the global monetary system. Exactly what, we may never know. I believe it was something to do with collateral and securities lending, the kinds of things that brought AIG to its knees in what doesn’t seem like all that long ago. In a rush, over several days, everyone around the world piled [...]
Tomorrow will be one year since the global monetary system broke. Or, for the sake of accuracy, broke again this for the fourth time. There had been warnings going all the way back to September 2017 about how all was not right in the realm of reserve currency. These would take on added importance at the outset of 2018, an [...]
Scarcely a day goes by without a flood of new articles in the financial media expressing shock and disbelief over Treasury yields. It’s not just that they are wrong, these say, it’s that they have to be wrong. What they are implying just isn’t compatible with the what “everyone” is expected to believe. Consumer sentiment is still high as are [...]
In Europe, the ECB’s minutes for its April 2019 meeting claimed: Financial market developments, which were typically more forward looking, were more upbeat. In the US, the Federal Reserve’s minutes for its April 2019 meeting claimed: Participants noted that even if global economic and financial conditions continued to improve, a patient approach would likely remain warranted, especially in an environment [...]
It is sometimes amazing what happens when you add just a little perspective. In some cases, it doesn’t require much at all to do so. One little addendum can upend the entire message, leading you off into entirely different interpretations. The implications can be enormous. To see what I mean, let’s begin with the basics. Below is what the public [...]
The FOMC hates the bond market. Hates everything about it, especially how it tells these Economists they don’t know what they are doing. Monetary policy being little more than a vanity project, that’s not going to work for the people practicing it. OK, if you don’t like bonds then how about something else besides the stock market? Some independent corroboration [...]
Understand what the word “transitory” truly means in this context. It is no different than Ben Bernanke saying, essentially, subprime is contained. To the Fed Chairman in early 2007, this one little corner of the mortgage market in an otherwise booming economy was a transitory blip that booming economy would easily withstand. Just eight days before Bernanke would testify confidently [...]
The Federal Reserve has been maintaining statistics on American industry for nearly as long as there has been a Federal Reserve. The first entry in the data series on Industrial Production is for the month of January ’19. Not 2019 but 1919. With over a hundred years of relatively consistent data, matching up very well with overall trends in the [...]
Before the stock market’s slide beginning in early October, for most people they heard the economy was booming, the labor market was unbelievably good, an inflationary breakout just over the horizon. Jay Powell did as much as anyone to foster this belief, chief caretaker to the narrative. He and his fellow central bankers couldn’t use the word “strong” enough. After [...]
People have started to look back fondly upon the Asian flu. It was as global disaster, a dollar shortage which spread all across mostly Asia but not exclusively. The reason why it is talked about positively nowadays is LTCM and rate cuts. Popular myth has it that Greenspan’s Fed properly handled any economic fallout due to the former by enacting [...]
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