Like China, manufacturers in the US report feeling better about manufacturing. Also like China, this is nothing new. The ISM Manufacturing PMI was estimated to have increased to 54.7 in December, up from 53.2 in November. That was the highest overall figure since December 2014. This is consistent with other sentiment surveys showing a noticeable increase in optimism since summer. [...]
China’s official manufacturing PMI fell just slightly for December 2016, after rising for November to the highest since mid-2014. The overall index pulled back to 51.4 from 51.7 the previous month. The subindex for New Orders remained steady at 53.2, matching the highest point since July 2014. These PMI estimates suggest that China’s experience with the “rising dollar” has passed. [...]
In 2003, Nobel laureate Robert Lucas wrote admiringly in his Presidential address for the American Economic Association that the field of economics was itself a put-forward solution to the Great Depression. Such was the calamity that enormous intellectual effort was expanded so as to never repeat it. Though with that belated task there is also, or there at least should [...]
The main policymaking body of the Federal Reserve, the FOMC, has had a tortured relationship with eurodollar futures during this past decade. As I chronicled here in greater detail, starting in early 2007 the committee members decided that the deepest, broadest market in terms of money in human history could not possibly reflect accurate expectations. Ben Bernanke had told Congress [...]
The Office of the Comptroller of the Currency won’t release its collection of bank call reporting for Q3 2016 until January. There is a great deal about the aggregate US bank derivative book in that particular quarter that is of particular interest. Though we will have to wait for that update, there is still some value in reviewing parts of [...]
Did CNY flash crash yesterday? That it is even being contemplated and argued is itself an indication of these times. According to pretty much all market data, CNY fell below 7.0 to the dollar just prior to the US open. It had been trading its usual (for the past week or so) artificial, non-volatile sideways at around 6.96 when for [...]
There are usually ceteris paribus assumptions lurking behind every mistaken impression in economics, including monetary economics. If Central Bank X does Y, where Y is a plus sign it is believed to be “accommodation” or “loosening.” Rarely if ever is there an account of money outside of this condition, except in only the most extreme of circumstances. In the past, [...]
This is a repost; originally published Dec. 22, 2016. The federal funds rate target is essentially nothing more than a communication tool. You don’t have to take my word for it, the same conclusion has been reached at the level of the FOMC itself. There was, in fact, some debate, though limited in scope, in 2013 and 2014 about changing [...]
The Census Bureau reported last week that durable goods (ex transportation) shipments were up 2.4% in November year-over-year (NSA). It was the third time in the past ten months that shipments have risen, and the highest growth rate since December 2014. New orders for durable goods (ex transportation) were also up, +3.3%, the fourth time this year. Rather than suggest [...]
China’s big problem can be succinctly described as where Economics met economics. Capital “E” Economics pushed authorities to over-financialize China in response to the Great “Recession”, which China’s government was only too enthusiastic to do even though its monetary regime at the PBOC better understood what was at the time happening than any of the central bankers in the West [...]
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