The fact that China reported a small increase in official “reserves” for February 2017 is one of the least surprising results in all of finance. The gamma of those reserves is as predictable as the ticking clock of CNY, in no small part because what is behind the changes in those balances are the gears that lie behind face of [...]
We live in a non-linear world that is almost always described in linear terms. Though Einstein supposedly said compound interest is the most powerful force in the universe, it rarely is appreciated for what the statement really means. And so the idea of record highs or even just positive numbers have been equated with positive outcomes, even though record highs [...]
The BIS in its quarterly review published yesterday included a reference to the eurodollar market (thanks to M. Daya for pointing it out). The central bank to central banks, as the outfit is often called, is one of the few official institutions that have taken a more objective position with regard to the global money system. Of the very few [...]
The ISM Manufacturing PMI registered 57.7 in February 2017, the highest value since August 2014 (revised). It was just slightly less than that peak in the 2014 “reflation” cycle. Given these comparisons, economic narratives have been spun further than even the past few years where “strong” was anything but. The ISM’s gauge of orders increased to the highest level in [...]
Germany is notoriously fickle when it comes to money, speaking as much of discipline in economy or industry as central banking. If ever there is disagreement about monetary arrangements, surely the Germans are behind it. Since ECB policy only ever attains the one direction, so-called accommodation, there never seems to be harmony. But that may only be true because “accommodation” [...]
I honestly don’t know how much clearer it could possibly get. The mainstream continues to struggle to identify the causes of the “rising dollar” when in all cases it is decidedly simple. The more the dollar goes up, the more whatever counterparty country is paying for those dollars. The entire world is in a synthetic short position created decades ago, [...]
China joined the World Trade Organization (WTO) on November 11, 2001. Its membership took a decade and a half to achieve, no small wonder given that when it started the process the country looked nothing like it did when it was complete. Even by 2001, the Chinese economy was growing fast, but that was nothing compared to what it was [...]
Ross Perot famously declared the “giant sucking sound” in the 1992 Presidential campaign. The debate over NAFTA did not end with George H. W. Bush’s defeat, as it simmered in one form or another for much of the 1990’s. Curiously, however, it seemed almost perfectly absent during the 2000’s, the very decade in which Perot’s prophecy came true. Americans didn’t [...]
Though we may think of modern economies as being modern and perhaps disassociated with some of the more primitive aspects of the past, there remain to this day seasonal fractures in economy and finance. When the Federal Reserve was created in 1913, for example, its first task was “currency elasticity” which may not have been what we think about as [...]
I have no idea if Sir John Bond, former head of HSBC, is or was superstitious, but if he wasn’t maybe it would have helped the bank if had been. In November 2002, the British bank announced a huge American purchase, buying Household International for $14.2 billion in HSBC stock. This was no small thing at that time, the stock [...]
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