From the perspective of foreign economies, the primary economic problem is US consumers. That sets up a contradiction as noted earlier today with durable goods estimates; economists think US consumers are quite healthy and the contraction in manufacturing is due to foreign economies. The inventory imbalance, or bloat as it was aptly described, cannot be an overseas problem and therefore [...]
Major Asset Classes with Positive Total Returns US Reits - 2.62% US Large Caps (SP500) - 2.2% Munis (3yr) - 1.16% Emerging Market Bonds - 1.08% US Bonds - 0.76% Cash - 0.02% Unfortunately, 2015 was not a great year for diversified portfolios. Kudos to those who owned Japan, Europe, US Large Cap Growth, Foreign Small Caps, Preferred Stock and [...]
The FOMC at least still knows how to throw a party. It may not be what it once was, but for one day there was the familiar euphoria predicated upon the wish that central bankers might know something about anything. All-too-quickly, however, it vanished as it becomes increasingly clear, despite all attempts to rewrite this history, that there are no [...]
Now that the FOMC has done it, we get to hear about how it was surely the “right” time for it. Unlike September, conditions are supposedly an order of magnitude more settled. That has given the policymaking economists the green light to make sure they start the normalization process before “overheating” becomes the central concern. With August a fading memory, [...]
There isn’t much commentary needed here, as the prices and yields indicate everything relevant and important. I would only add that seeing August 24, October 15 and now the change (in acceleration) in December all add up to something different than the FOMC’s whatever influence. There is no monetary policy reason for the August 24 global liquidations to show up [...]
The problem with exchange rates is that they don’t always tell us anything about what everyone seems to think. In fact, the more wholesale financial exhibitions in a particular currency, the less traditional interpretations conform. In many ways, this is very much like transitioning between classical physics in the Newtonian, deterministic paradigm into quantum physics’ often strange and seemingly incoherent [...]
Since October 15, gold, yen and Swiss francs have all been pummeled by what increasingly looks like a “dollar” repeat from the start of Q3. It is difficult to suggest whether there is any shift in safe haven bid in all three, but I would guess, as with Q3, it may not have mattered as the “dollar” function globally has [...]
Japan fell back into recession again in Q3, expected this time, which is actually being charitable to Abenomics and especially QQE. To even believe that this monetary insanity has produced even marginal benefits, it has to be given “credit” of at least mini-recoveries in between these “technical recessions.” It is a problem far worse than that, as even a technical [...]
The duality of gold in the modern wholesale fabric has perhaps been on display this year more so than at any time since 2008. That year, the year of the eurodollar-drawn panic, gold was seemingly more volatile than any other asset – if only for its virtuous tendency to as sharply rebound for every major crash. And in 2008 there [...]
The TIC update for August estimates provided some clarity on several accounts. Given the nastiness of the “dollar” environment in that month it was certain that the Treasury Department would display negative “dollar” conditions, and that was the case. The numerous subcomponents and categories were quite useful in corroborating that picture, even if there was some work and re-orientation in [...]
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