It is often very difficult not to smile even though there is little lately to smile about. Every so often the world produces an absurdity that proves yet again God has a sense of humor, or that cosmic irony is a real thing. In economics and finance, all of the past few decades have revolved around actual money, which has [...]
Earlier this year it was reported that a great many OPEC nations were on track to repay China in oil rather than “dollars.” Reuters had calculated that between $30 and $50 billion of prior loans were to be closed out via each country’s crude capacities. As the price of the black stuff has dropped, however, that leaves them with little [...]
What do you do if you are China? As that question pertains to the “dollar”, they have been asking themselves as well as the rest of the world since the panic. In various ways, the Chinese have been positioning as if for the end of the dollar system, which has given critics (economists) cause to dismiss it as nothing more [...]
Maybe it is just too complicated to do much more, but for the most part central banks work in the here and now. They may stray from time to time into strategic thinking, but given the mathematical limitations of traditional statistics, weaknesses we all know too well in 2016, that is of limited value. Even in normal times monetary policy [...]
In conventional thinking, China’s problems are China’s problems. As those related to its currency, it is believed a mere matter of either intentional policy (devaluation = export stimulus) or the outflow of “hot money” because of China’s unique circumstances. From this position, one populated by policymakers, what has transpired over the past year plus was all very confusing. It is [...]
It is quite interesting that two pieces of likely interconnected news hit today about everyone’s favorite German bank. First, Reuters reported rumors that C-suite officials from Deutsche Bank alerted their HR to perhaps expect double the job cuts from what was previously announced. Last October, the bank claimed that it would need to shed about 9,000 employees. Apparently, that might [...]
I generally shy away from sentiment surveys as almost a rule because I believe they are more often than not misleading. The various indices of consumer confidence fall into that categorization, especially over the past few years. According to many, consumer confidence is back to where it was during the housing bubble even though by nearly every other statistic, particularly [...]
With today’s retail sales report “mixed”, the Atlanta Fed now predicts Q3 GDP will be less than 2%. According to its GDPNow model, the weaker retail sales report, particularly the control group that enters the GDP calculation, will add up to just 2.6% Real PCE growth. In prior periods with actual growth, Real PCE has ranged from 4% to 5% [...]
Retail sales in September 2016 were mixed, though what I mean by that is importantly different than what it used to suggest. Before 2012, “mixed” results in accounts like retail sales indicated that there was some good, some concerning. After last year where retail sales were uniformly atrocious, “mixed” now means some components still that way, with some others just [...]
As perhaps another in a very long line of indications as to what is unholy and wrong about today in banking and finance, over the weekend it was reported in the Financial Times that Deutsche Bank had received an improper accommodation on its “stress test.” In what can only be described as a clear example of cheating, DB’s capital position [...]
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