In contrast to the franc, the Danish krone continues to ignore ongoing speculation. The latest has seen rumors of not just direct buying by Danmarks Nationalbank but now even full-blown capital controls. Before yesterday, the krone had traded at or near 7.444 to the euro for 20 consecutive trading days; now surging today. In other words, the Danes don’t have [...]
With Greece relenting on its game of chicken with the Eurozone noose, you have to wonder how much the ELA and the threat of total financial meltdown pushed that direction. From the view of credit markets in Europe, there was an unusual almost confidence in such an outcome from the moment of the election last month. Small wonder when Europe [...]
In an effort to prove that the Federal Reserve and ECB are not that far apart in at least philosophical terms, the European Central Bank released minutes from its historic QE meeting in January. Whereas the Fed has been using circular logic to “justify” at least bluffing toward rate hikes, the ECB apparently has done the same to “justify” QE. [...]
The Federal Reserve Bank of San Francisco, Janet Yellen’s old institution, has made a habit of breaking with orthodox trends and actually citing and disclosing deficiencies in economic study. In its latest effort, the bank channels a bit of Stanley Fischer and states the obvious, or what everyone else has known for a long time: Over the past seven years, [...]
The dissection of the economy as it exists right now is usually limited to a narrow cross section of only GDP and the unemployment rate. As long as both are moving in the “right” direction, even if relatively sluggishly, the mass conclusion is that a recovery is in force and will remain so absent any “shock.” Theoretically, that owes to [...]
The Fed is simply making it up as it goes, with nary a concern about being questioned on what is really disingenuousness. That starts with oil prices as there have been a number of Fed officials rushing to embrace them as some kind of “stimulus” that nobody outside a monetary magician (redundant) could perform. Orthodox economics despises “deflation” to its [...]
The rash of “unexpected” declines in PMI’s this morning in the US, of all places, seems to have abraded at least somewhat the pervasive belief in the American “decoupling.” As I have said before, I afford little validity to PMI’s as anything other than potentially a relative measure of changes, not magnitudes, in shorter-term circumstances. That is why the most [...]
The biggest challenge for the Federal Reserve in 2015 is going to be trying to convince everyone that it is meeting its dual mandate. That is true of every year, but this one is unique given the threats to undo ZIRP after more than six years of it. On the one hand, there is the “maximum employment” mandate seemingly arrived [...]
It seems Charles Dickens had a flair for 21st century economics all the way back in the 19th century. Writing in his book Little Dorrit (thanks to W Krauss for the reminder) he observed that credit systems tended to be, “…a person who can’t pay, gets another person who can’t pay, to guarantee that he can pay.” The first person [...]
Inside the Treasury Department, the Office of Financial Research has grown to 225 employees, though that may be just a concerning (bureaucracy) as it is laudable (serious effort). Incorporated by Dodd-Frank, the agency inside the agency is dedicated to “Wall Street Reform”, at least that was the heading upon its old website. At its new virtual location, OFR projects its [...]
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