The US Producer Price Index declined 0.5% month-over-month in September, much farther than the 0.2% drop expected by economists (statisticians, really). With retail sales providing little positive emphasis even among the large segment of commentary focused exclusively on the monthly variation rather than the intense consequence of wider context, the idea that the Fed will confirm the final stage of [...]
Unsure what to make of the renewed disaster in Chinese trade figures, there has been renewed emphasis on China being China. Almost every media story about the 20% collapse in imports references an assumed attempt by China to transform out of exports and into a consumer-driven economy without reconciling how or why that has so obviously and spectacularly failed. Nor [...]
It may be unexpected to economists, but the sudden and uniform economic downside that is either appearing or strengthening almost everywhere in the world is closely tracking the wholesale “dollar.” In many cases, that flows through China and so is given that gloss, but there can be little doubt now about either cause or effect. In Japan, machine orders (a [...]
The Census Bureau updated US trade activity for August, with export activity dropping almost 11% year-over-year. The global economy is clearly falling apart, no matter how much economists wish to see the dollar (exchange rate fluctuations) where the “dollar” (wholesale finance pulling back leading to economic disarray) already is. Export activity is only a little short of the trough of [...]
Concurrent to more survey-based indications of a US manufacturing slowdown, economists have been quick to blame overseas problems such that it leaves a “strong” US economy as a baseline. On the other side of that equation, China’s manufacturing likewise is rapidly declining but somehow with the same point of blame. Both Chinese PMI’s were decidedly weak, with the private version [...]
The ISM Manufacturing PMI was “unexpectedly” weak yet again in September. Continuing the theme spelled out by the regional manufacturing surveys (the Fed’s and the Chicago BBI), economic momentum has clearly stalled right where the “dollar” said it would. The pattern is blindingly obvious, with a huge slowdown to start the year (coincident to the first “dollar” disruptions including crude [...]
In a world saturated by derivatives, the concept of a bellwether of a bellwether might actually make sense. If China is one for the global economy then perhaps South Korea might be it for China. Unlike Japan, South Korea hasn’t had the yawning chasm of QQE to alter its balances, therefore the level of shipments particularly to China offer perhaps [...]
In her testimony before Congress in July, Janet Yellen laid out the same talking points that have been propagated onto Americans time and time again these past eight years. The economy is moving forward and the Fed is doing and has done everything it can, and that there are “green shoots” still though no full and mature growth. Low oil [...]
Three-month LIBOR has just this month risen by a little more than 3 bps. That sounds like nothing more than a rounding error, beyond trivial, but considering it had only risen 3 bps prior going back to March the comparison of acceleration is what clearly matters. Up until August, the upward variability in LIBOR had been limited toward the longer [...]
In another of the innumerable cosmic coincidences that so abound these days, producer prices in China have been in “deflation” since March 2012. Not only is that 41 consecutive months of falling prices (insofar as this index captures that effect), that month is ubiquitous as a trend demarcation in so many other places. It’s as if the Chinese economy and [...]
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