Confirmation that it wasn’t a shallow Rhine and emissions regulations. Something big is going on in Europe, Germany first. And if the German economy stumbles, particularly its industrial and manufacturing sector, we can reasonably infer its cause – the entire global economy is suffering. As is standard practice, when weak data began showing up last year it was attributed to [...]
According to Germany’s Zentrum für Europäische Wirtschaftsforschung, or ZEW, the slump in the country’s economy has now reached its fourteenth month. The institute’s sentiment index has improved in the last two, but only slightly. As of the latest calculation released today, it stands at -3.6. That’s up from -24.7 back in October, though sentiment had likewise improved at one point [...]
What is Japanification? There are all sorts of ways to explain what the term can mean. The simplest is a single word, which for me is “sideways.” We live in a non-linear world meaning one where compounding is the biggest factor. Albert Einstein probably never said compound interest is the most powerful force in the universe, but the reason the [...]
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 [...]
While Western markets breathed a sigh of relief that US GDP didn’t confirm the global slowdown, not yet, what was taking place over in Asia went in the other direction. There has been a sense, a wish perhaps, that if the global economy truly did hit a rough spot it would be limited to just the last three months of [...]
Early in May 2013, the word “taper” exploded into the mainstream. It was everywhere, scarcely an article written or news story pieced together which hadn't included the term (even though Ben Bernanke never actually said it). The so-called tantrum spread like wildfire simply because of what it represented, the very thing everyone had been waiting for. Confirmation at last the [...]
The unemployment rate isn’t just misleading in the US, though the gap between what it suggests here and what isn’t happening is now enormous. This idea of a labor shortage, or LABOR SHORTAGE!!!! as each case may be, was itself as global as synchronized growth when it showed up in later 2017. There were stories about Chinese factories unable to [...]
I haven't written a formal asset allocation update since November so this one will be a little bit of catch-up for non-clients as we did make some minor changes in early January. On January 7th we shifted our bond allocation somewhat to reduce duration. Continuing to hold longer-dated bonds at that point essentially meant betting on a recession and I [...]
In Japan, they call it “powerful monetary easing.” In practice, it is anything but. QQE with all its added letters is so authoritative that it is knocked sideways by the smallest of economic and financial breezes. If it truly worked the way it was supposed to, the Bank of Japan or any central bank would only need it for the [...]
Since I don’t speak Japanese, I’m left to wonder if there is an intent to embellish the translation. Whoever is responsible for writing in English what is written by the Bank of Japan in Japanese, they are at times surely seeking out attention. However its monetary policy may be described in the original language, for us it has become so [...]
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