By any reasonable standard, today’s trading in “dollars” was highly unusual. The Chinese yuan had been trading its typical depreciation route all through the night and toward the US open. At about 6:15am, CNY was just about to touch 6.59 and a new low that would have put it back into early January territory (not good). It traded modestly higher [...]
It might be too early in the week, though not likely since only the irrelevant payroll report is really left, and too soon for definitive conclusions, but if I had to pick a chart of the week it would actually be this series. They declare a lot more about the potential intermediate term than the BLS numbers can or will. [...]
The OECD pleaded this morning for more “coordinated action”, i.e., “stimulus”, without even bothering to explain why anyone would feel confident if governments around the world might actually oblige. This economy, the singular global economy, has been stimulated to death, awash in especially monetary influence of constant ZIRP and QE’s and now threatened by nominal punishment through NIRP. When all [...]
Two weeks ago, Chinese stock futures traded in Hong Kong flash crashed. Between 2:14pm and 2:16pm local time on May 17, the Hang Seng China Enterprises Index suddenly liquidated due to an intense burst of sell orders that crashed through the whole of the futures market depth. At the start, the index was trading at around +1% but fell to [...]
The Chinese exchange rate has traded lower for five consecutive days, and aside from essentially no change last Friday would have been eight in a row. That contrasts with the downward pattern that existed ever since the turn in mid-April where only the general direction was down in not so much a straight line. The slope isn’t dramatic, but it [...]
The Ricardian theory of free trade has dominated economics philosophy for good reason. It has a sound basis in common sense and offers a theoretical guide to understand the nature of exchange from a systemic standpoint. It does not, however, cover all such basis for all such manner of trade. Comparative advantage is somewhat straightforward where nations exchange goods, but [...]
The People’s Bank of China today fixed the CNY exchange (reference) rate below 6.56 for the first time since early February. That means all the tremendous effort that went into erasing December and January’s “dollar” pressure (not devaluation) has been unwound, as the currency now trades just about where it was at the start of China’s Lunar New Year Golden [...]
In this brave new banking world of impenetrable bureaucratic morass designed to keep us all from ourselves (slogan: don’t panic, there’s a lot of new math), there are new acronyms for just about anything. To regulators, some groups of letters mean a lot more than they might for banks, while investors, loosely defined, focus on still others. One such term [...]
Despite the fact that the Fed has raised rates and therefore signaled via policy communication that their view of the economy is rather positive, both bond and stock prices don’t seem too caught up in the optimism no matter how much attention is paid to the shifting sands of monetary policy. Yesterday, the media was full of stories about how [...]
On July 21, 2009, then-Fed Chairman Ben Bernanke wrote an op-ed published in the Wall Street Journal seeking to allay any fears over balance sheet expansion. This was all relatively new, and at that time the recovery seemed a good bet and appeared to be underway in many places. Bernanke’s goal was to soothe any fears that “inflation” would get [...]
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