To economists nothing about the 2000’s makes sense (a condition that has only grown worse in the 2010’s). At the same time productivity growth suddenly disappears, in its place is this incomprehensible “global savings glut.” While it has been tempting to dismiss these shifts as anomalies, even orthodox economists cannot just ignore them given the history of the past decade [...]
The assumed relationship between inflation and employment, unemployment really, has been tortured in the last half century. Given the constant mistakes economists make in this regard, it is fair to conclude that they really don’t have much idea at all about the connection. There is a fatal conceit contained within the orthodox views here that starts with misunderstandings about money [...]
There was more bad news for the FOMC over the past few days beside the once again near-zero GDP estimate. If the labor market were truly growing as is claimed, we should be finding “inflation” in a broad set of different economic views. From the standard inflation calculations to various estimates for wages or income, by now it should be [...]
On December 27, 1990, changes to Regulation D went into effect with the maintenance period that began that day. Among those alterations was a reduction in the reserve requirement imposed upon what are officially called “eurocurrency liabilities.” Under the Monetary Control Act of 1980, which made reserve requirements universal to any US chartered federally insured depositories and all its qualified [...]
The corporate junk bubble had gotten so beaten up and so dire that removal of the liquidation pressure was bound to attract bargain hunters and momentum chasers. Despite all that has happened, the lust for huge potential gains remains constant. Where that might have been more expressed upon the short side last year, with the end of the last liquidation [...]
Today was the third consecutive down day or selling in eurodollar futures. The June 2018 contract settled below 98.80 for the first time in April, almost unwinding the move higher at the start of this month. Even after the selling, the eurodollar curve remains as depressed as ever, discounting an entirely different set of future circumstances than stocks or junk [...]
Goldman Sachs did not disappoint. The bank’s earnings for Q1 were a disaster slightly worse than what was already anticipated as beyond bad. There was nothing that the firm did that it can say it did well, as Goldman’s CEO admitted there was weakness or “headwinds across virtually every one of our businesses.” For eurodollar or wholesale banks, that has [...]
On April 12, Muhammadu Buhari, President of Nigeria, was in Beijing to negotiate Chinese aid for his ailing country. At home, the government faces an enormous budget deficit largely on the price of oil. The more immediate threat, however, is that Nigeria in large part due to oil prices is being squeezed by monetary shortage. The country is an import-heavy [...]
The focus on China and the Chinese economy is not just related to its size but more so the fact that it is the pivot point for the whole global system. In pure economic terms, as “end demand” from the developed world economies slows, the Chinese economy either absorbs that reduction (through its own internal “stimulus”) or passes it on [...]
There is little doubt as to Wall Street (and London) shrinking but nobody seems to be able to come up with an explanation for it. Typically willful blindness is the reason, as investment banks no longer want the duties but that just isn’t consistent with what is supposed to be a roaring economy. If anyone were to make out under [...]
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