On November 2, Hong Kong’s Exchange Fund reported its worst ever quarterly loss. For the quarter the number was an astonishing -HK$63.8 billion, turning what was an already-reduced YTD profit from Q2 into a –HK$36.8 billion loss so far for 2015. What caught most people’s attention was not specifically the loss but that it was derived more so from “other [...]
The wholesale economic problem widened again in October, even as the Commerce Dept. reported yesterday wholesale inventories rose at the slowest pace in two years. Overall, non-adjusted inventories rose by 3.6% compared to October 2014, which was less than half the rate of the summer of 2014. But that slowing inventory (which is still GDP negative in the second derivative [...]
Joining Anglo American and Kinder Morgan, Freeport-McMoRan announced the full suspension of its dividend. The clustered nature of these announcements only create questions about what might have changed recently, a possibility which actually holds very little mystery. After all, the company’s stock price has been falling steadily since about December 2010 (trading at about $60) so that surely isn’t the [...]
The fact that there is almost universal recognition of a “manufacturing recession” not just here but spreading across the world is a significant change. After resisting and ignoring as much as possible for more than a year, economic weakness is now no longer unthinkable. This is, however, no mere academic exercise as there are very real consequences as the former [...]
Crude oil prices are exhibiting all the signs of an increasingly difficult funding environment. The front end of the futures curve is being bent dramatically in relation to even close maturities just outside the next few months. Such contango is the obvious imprint of finance, though that is not to say that economic expectations are neutral in the curve. Far [...]
As the manufacturing recession becomes more and more unassailable (and I mean that in more than one way), the fact that it still shows no end or let up suggests still greater difficulty beyond manufacturing. As feedback loops become more established and robust, and thus convince more and more non-manufacturing firms to adjust instead of waiting out for Janet Yellen’s [...]
For the tenth straight week, dating back to the week just before the global liquidations in August, reported domestic crude inventories increased. At 489.4 million barrels, the current level of oil stock (excluding the SPR) is only slightly less than the record high of 490.9 million barrels reached the week of April 24. “Transitory” is dead. The increase in oil [...]
To this point, I have refrained from presenting Morgan Stanley’s balance sheet reporting on gross derivative exposures because, quite frankly, it fits too perfectly. The bank follows the wholesale “dollar” narrative so closely that it almost seems too good (bad for the financialized economy) to be true, and thus almost diminishes the value of the evidence by extension. Because of [...]
Despite everything that happened in July and August throughout the financial world, there remained a tendency to simply dismiss it as anomalous. That was curious in and of itself, but that the global liquidations then were not isolated but rather the latest in a continuing string of “odd” events strains such determined dimness. We have arrived at a point in [...]
On December 11, 2014, spot WTI closed at $60.01, down sharply from $76.52 the week before that Thanksgiving. In the space of only a few weeks, oil prices had collapsed far more than anyone thought possible; and yet there was very little urgency to the outcome. Economists, in particular, parroted throughout the media, were quick to assert both a supply [...]
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