Yesterday was the eighth anniversary of the end of the eurodollar standard as a functioning system. Though the attainment of such dizzying scale was completely artificial, finance unbacked by real economy, it at least to that date had remained in more than superficial order. Reviewing the systemic break of that day remains quite useful in understanding where we are now, [...]
It may be related or it may not, but the setup and decision by the Bank of England is far too close to the Federal Reserve to simply ignore or dismiss. While the FOMC added the word “some” to its policy statement at the last meeting to downgrade, really, its economic assessment, BoE accomplished much the same through different means. [...]
China’s economy is sliding and nobody can really tell where that downturn will end (though it doesn’t stop the media from proclaiming a bottom at each individual upward variation). Brazil’s economy is in the worst shape in decades, with both volume problems coinciding with the real’s sharp devaluation hammering consumer prices. The country’s central bank has managed to make it [...]
For once, the Fed gets it right. Actually, it is three times and only certain parts of the Fed, as the agency is by no means monolithic. In the first two, the Atlanta Fed’s GDPNow tracker nailed the preliminary GDP estimate for the second straight quarter. You can appreciate why they unveiled it just recently despite it’s existence going back [...]
Today is the fifth anniversary of Dodd-Frank, the erstwhile government response to assure that the Panic of 2008 does not repeat. It was an ill-advised task to begin with as the panic itself took care of repetition. It is not, and never has been, past panic that should worry our future. Along with the legislation came the Consumer Financial Protection [...]
Having now passed the anniversary of the “rising dollar”, it is interesting to see the related and continued effects on the stock bubble(s). As should be obvious by now, stock buybacks, funded via corporate bonds and loosely categorized C&I loans, are responsible for the post-QE3 nearly uninterrupted rise. Repurchases are forming a separate “liquidity” conduit, indirect leverage if you will, [...]
When US retail sales jumped in May on seasonal adjustments alone, economists and mainstream commentary lost all composure as they were certain that meant the “slump” was over and the dominant narrative would continue. The same occurred in Europe over a slight pickup in overall lending, not even in the household or business sectors, which was proclaimed as nothing but [...]
The US Treasury Dept. released its awaited report on October 15 today. I started to read through its 72 pages but it became clear rather quickly this wasn’t anything but, frankly, junk. The ultimate message is simply one of “computers.” In other words, there is no discussion, apart from simple bland references here and there, about what really transpired on [...]
There was a point last week - probably about midday Wednesday - when it seemed that the financial world was spinning out of control. China's Shanghai exchange was continuing its slow motion crash, down almost 6% overnight, Europe was getting hammered as Greece teetered, the NYSE suddenly stopped working, United/Continental Airlines was grounded due to computer glitches, the Wall Street [...]
Just a few weeks ago the Swedish central bank, Riksbank, was being lauded for its courage and action in finally embracing QE as the ECB had done. The deflation problem in Sweden had been, so it is asserted, seemingly intractable and thus forcing the monetary hand once more. Riksbank has never been shy about fine-tuning here and there, so it [...]
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