It’s no longer possible to know what state Chinese industry may be in. This is no small matter. Industrial production in China is the bedrock of economic growth throughout the rest of the world. Without it, there really isn’t anything left to do but struggle. And since industry’s performance there is predicated on demand in the Western world, this is [...]
Cushing, OK, delivered what it could for the CPI. The contribution to the inflation rate from oil prices was again substantial in August 2018. The energy component of the index gained 10.3% year-over-year, compared to 11.9% in July. It was the fourth straight month of double digit gains. Yet, the CPI headline retreated a little further than expected. After reaching [...]
Is it a shortage of workers, or a shortage of work? Structural issues with Americans and who they are, or macro issues about which Americans have been fed a load of crap for more than a decade? You can see why those who may have been manufacturing raw manure might have an interest in swaying the debate toward the structural. [...]
Over the weekend, another European nation turned toward the populist direction. It was enough to get one’s attention when Italy did it, but Sweden is something else altogether. The country has been long held out as an exemplar of everything that is right with globalization. They have industry, youth, etc. How in the world could another “far right” party score [...]
For the first half of the Great “Recession”, China and the rest of the EM world seemed immune. It was American subprime mortgages that we were told was causing all the problems, and if European banks had somehow gotten themselves entangled in the rotten real estate mess so much the better for where growth was invulnerable. This first instance of [...]
Liquidity preferences are one of the least discussed economic concepts. There are several channels into which monetary instability can hamper the real economy. A “dollar” squeeze doesn’t just impact banks, they often pass it along further down the economic chain. In its most extreme form, we had something like 2009. Some of the best companies all over the world found [...]
One year ago today, something broke. It wasn't a big thing, practically a footnote seemingly not worth mainstream attention. Out of nowhere, the 4-week T-bill yield spiked. On Friday, September 1, 2017, the equivalent interest rate for the instrument was steady at 96 bps. That was already a problem because the Federal Reserve’s RRP was at the time set for [...]
You get the impression often that these guys have no idea what drives the dollar. They cling to all sorts of theories, of course, from interest rate differentials to perceptions of economic strength. That seemed to be the case in 2017 and its “weak dollar” environment. Globally synchronized growth would mean potency pretty much everywhere, thus, in this view, a [...]
If Brazilian central bankers are the standard for illicit shamelessness, their European counterparts are at least on the same spectrum. At the end of April, the European Central Bank’s President Mario Draghi took his shot at purposeful mischaracterization. Speaking to the press after the ECB’s Governing Council meeting had concluded, Draghi had been forced to concede there had been at [...]
It’s hard to believe it was only about three months ago. Time flies when disaster unfolds all around you. In early June, Brazil’s central bank arranged a press conference where its President Ilan Goldfajn would set everyone straight. The currency was falling, he admitted, but it would be easily handled by closely following the Portuguese version of the global central [...]
Stay In Touch