I think it is very clear that the Bank of Japan is becoming more and more sensitive to swings in the Japanese stock market. Policy pronouncements, toothless as they usually are, seem to correlate very well with downturns in stock prices. Perhaps some of the Federal Reserve literature is making its way East. There were no doubts, none whatsoever, last [...]
So far in China this year there have been defaults and “bailouts” in the credit markets, but they are tiny in relative comparison to everything else. That they have occurred at all is why they have grabbed so much attention. We all have some inkling of the credit and monetary inequities that are roiling inside the Chinese economic gut, but [...]
Persistent whispers throughout the autumn that the Bank of Japan was thinking and even planning (I suppose that meant more modeled simulations) to raise its intervention quota beyond what was judged only months ago to be monstrous and more than sufficient had an anesthetic effect on Japanese “markets.” Despite what was serious consternation about the damning resistance of Japanese companies [...]
QE’s hope is that in the course of redistribution any spurt of temporary activity caused by such monetary deck shuffling will lead to follow-on activity (the cult of aggregate demand). As we see in the US, the redistribution appears to have had the reverse effect, including effects on global trade. In Japan, the other nation so fully devoted to QE, [...]
The economic hopes for 2014 have been largely concentrated in a few sectors. Monetary authorities have been counting on the historical channel of housing to be one of the continued “bright spots” that would transition finally, after almost five years, into an unambiguous recovery. You always have to be cautious about reading too much into one data point, so it [...]
At its most basic element, the economic plan sounds plausible enough to almost be convincing. In the Japanese version, pointed more toward an export economy than internal consumption, monetary policy expects to devalue the yen, which should lead to a favorable re-configuring of goods parity. That, in turn, is supposed to increase internal production levels which then creates increased demand [...]
Apropos of the GDP outlier, Jason Fraser of Ceredex Value Advisors forwarded an article from CNBC, of all places, on the impact of this inventory cycling on US trade. Specifically, container traffic in imports has turned lower in November when it normally would do otherwise – and had for the three previous years. Traffic had been slightly below 2012 levels [...]
Earlier this week, Bloomberg published an article that examined the case of the missing link. It was not devoted to human evolution in a biological sense, but rather unintentionally to the emotional need to resist change. The title of the piece is, America’s Role of Consumer of Last Resort Goes Missing, and it continues from there on the theme of [...]
A simple review of recent data on demand in the US for actual goods. Less people driving to work (because fewer are working?). Perhaps the US can take the Japan route and export our way into the monetary panacea? Well, at the very least, the above data gives us a global trade reason for this: Click here to sign up [...]
Japanese exports continue to rise, but as we have seen in actual results elsewhere, both anecdotal and empirical, it’s a mirage driven by changes in the unit of measure (yen). Total exports from Japan rose 18.6% in yen terms, the highest growth rate since the middle of 2010. The problem was that imports also rose, by 26.1% as energy importation [...]
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