Commodity prices continued to fall last month. According to the World Bank’s Pink Sheet catalog, non-energy commodity prices accelerated to the downside. Falling 9.4% on average in May 2019 when compared to average prices in May 2018, it was the largest decline since the depths of Euro$ #3 in February 2016. Base metal prices (excluding iron) also continue to register [...]
The media quickly picked up on Jay Powell’s comments this week from Chicago. Much less talked about was why he was in that particular city. The Federal Reserve has been conducting what it claims is an exhaustive review of its monetary policies. Officials have been very quick to say they aren’t unhappy with them, no, no, no, they’re unhappy with [...]
Trade wars are rapidly turning into subprime mortgages. A few billion in tariffs will have wrecked the entire global economy, they’ll claim. Just like all that toxic waste subprime mortgage fiasco led inevitably to the Great “Recession” and global panic. Neither will be true, except insofar as both were symptoms of the far greater cause. The other thing actually responsible [...]
Preliminary estimates show that Japanese GDP surprised to the upside by a significant amount. According to Japan’s Cabinet Office, Real GDP expanded by 0.5% (seasonally-adjusted) in the first quarter of 2019 from the last quarter of 2018. That’s an annual rate of +2.1%. Most analysts had been expecting around a 0.2% contraction, which would’ve been the third quarterly minus out [...]
There is truth to the trade war. That’s a big problem because it’s not the only problem. It isn’t even the main one. Given that, it’s easy to look at tariffs and see all our current ills in them. The Census Bureau reports today that the trade wars have definitely arrived. In March 2019, US imports from China plummeted by [...]
The first time the global economy was all set to boom, officials were at least more cautious. Chastened by years of setbacks and false dawns, in early 2014 they were encouraged nonetheless. The US was on the precipice of a boom (the first time), it was said, and though Europe was struggling it was positive with a more aggressive ECB [...]
China’s Passenger Car Association reported last week that retail sales of various vehicles totaled 1.78 million units in March 2019. The total was 12% less than the number of automobiles sold in March 2018. This matches the government’s data, both sets very clear as to when Chinese economic struggles accelerated: May 2018. For decades, there was just one way for [...]
More important than the US GDP number, more substantial than the February jobs report, what will linger for longer in the public consciousness is China’s trade data. It seems as if the big drop in exports has garnered the most immediate attention, I suspect that won’t be the case moving forward. There are more important trends being captured where the [...]
The concept of an economic “false dawn” was almost entirely unfamiliar to the postwar US experience. We came close in 2002 and the first half of 2003, but eventually the housing bubble era took over. The dot-com recession was mild, sure enough, somehow, though, recovery seemed so elusive for a longer period than the contraction itself. There is supposed to [...]
These things have typically started in global trade. This makes sense given what we are dealing with are intermittent problems in global money. Quite simply, you can’t trade if you can’t get any. Therefore, the more acute the dollar shortage the more disruptive to the global merchandise economy. The one exception to this pattern was the first. Euro$ #1 registered [...]
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