If the US consumers and attendant “demand” had been relatively weak entering 2015 producing even at that point questionable conditions that are now admitted as a manufacturing recession, it is increasingly clear that “something” changed around the middle of the year. Obviously, market turmoil that had been largely focused overseas suddenly swung internally to capture US markets once though invulnerable, [...]
While the eurodollar system has attained the full functions of a banking system in parallel to (and in many ways superseding) the onshore dollar version, at its core remains its primary purpose as a means to solve global payments. It is the idea of the dollar replacing gold and sterling, the reserve currency. The difference in recognizing the eurodollar as [...]
December was one of the worst months on record for foreign dealing with the “dollar.” The latest TIC update further confirms why January was under such persistent and heavy liquidation pressure in almost every corner. There was a record monthly amount of “selling UST’s” in foreign channels, a dearth of private “dollar” activity and, perhaps most important of all, bank [...]
As China, Japan is the definition of insanity. GDP fell 1.4% in Q4 2015, marking the fifth contraction out of the past nine quarters and yet the word “stimulus” remains attached to QQE, the Bank of Japan and Abenomics in general. At this point, how much more time and sample size is necessary before calling it a failure? In about [...]
If we have at least a good idea about the gross exposure to US junk if not who ultimately holds and funds it, the emerging markets infiltration is much more difficult to parse. There are only a handful of estimates that appear reliable enough to obtain a decent range estimate. The first comes from the BIS and was written in [...]
I use the June 2018 eurodollar futures contract as a significant benchmark in my analysis of money markets because I feel it represents a solid cross section of sometimes conflicting influences. It’s close enough to the front end as to be significant both in terms of monetary policy as a factor but far enough to be as heavily if not [...]
When real household spending fell by 4.6% in April 2014 it was cause for concern. That was the first month after the tax hike hit and the decline in spending was much larger than anticipated (by economists, at least). Despite the heavy toll, Bank of Japan officials remained (outwardly) wholly unconcerned over what was believed a minor setback on the [...]
The November update for TIC figures shows relatively few surprises given what was witnessed November into December then January. The heavy downdraft of October was somewhat reversed, and even the official sector was probably less strained (outside of China) than at any time in 2015. But these are reactive symptoms to the greater problem of “dollar” availability, so the most [...]
Before World War II, in Japan there were four large conglomerates situated as vertically-integrated family-centered monopolies. Called zaibatsu, they were Mitsui, Mitsubishi, Sumitomo, and Yasuda, and many other smaller rivals. Each group would not just own companies in all industries, they would also organize and contain an assimilated banking concern (horizontal integration) to carry out capital and funding needs for within [...]
Japan has a history of revising its economic figures all over the place. The QQE era seems to have made GDP accounting something of an art form rather than the quantitatively determined “science” of how it is presented. For example, last December the Japan Times ran a story on December 2, 2014, under the headline Japan’s Recession May Be Shallower [...]
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