The mini-cycle in inventory has re-appeared in the latest two regional manufacturing surveys. Both the Empire Fed and Philly Fed indices have again fallen below zero, indicating a contraction in activity. However, it is the frequency of negative readings that is most relevant. Since the middle of 2012, both surveys (along with their three other regional Fed cousins) have been [...]
The recession deepened in Europe, but that was not a surprise to anyone outside the economics profession. While Germany stays perched upon the precipice of another contraction (Q/Q), the rest of Europe was not so “fortunate”. While we can label these gyrations in GDP re-recession, double or triple dip, etc., the truth is that this is one continuous descent into [...]
The Federal Reserve on a few separate occasions, as I noted late last week, has begun to peremptorily quash the growing use of the loaded word “bubble”. From academic papers to Fed speeches, US monetary policymakers want to make sure that investors and the public know they are watching for them though they have yet to appear. Vigilance is paired [...]
The physical markets for precious metals do operate under the philosophical framework of basic economics. The price of gold, for example, will move based on underlying demand and supply dynamics though it appears to have taken a break from that relationship recently. Unlike industrial commodities, however, gold still occupies monetary spheres, particularly interbank liquidity. That complicates the basic economics of [...]
Apparently, we have clear sailing for another five years for stock prices: “We surveyed banks, we combed the academic literature, we asked economists at central banks. It turns out that most of their models predict that we will enjoy historically high excess returns for the S&P 500 for the next five years.” Sure, there are some weasel words in that [...]
Lorenzo Bini Smaghi, a former member of the ECB’s executive board, raised some ire last month when he was quoted at the IMF’s spring meeting saying, “We don’t fully understand what is happening in advanced economies.” Such a statement drew so much attention largely because a significant number and proportion of investors, observers and professionals highly agree with him. Central [...]
First ECB head Mario Draghi hinted at discussions of an ABS plan at his press conference. Now we get word from Die Welt that not only is it more than a rumor, it has been discussed by the ECB’s governing council. The German paper also notes that it seems likely that the governing council is far more in favor than [...]
Our friend and colleague Eric Hull pointed out that NYSE margin debt was just a hair below record levels in March (the latest figure available), at $379 billion. Eric also noted that the past two peaks in NYSE margin debt have corresponded with 3-5 months of additional “exuberance” (given the persistence of QE’s in this climate, I would argue that [...]
The alchemists of Dark Ages lore had nothing on Wall Street. Like everything else in financial evolution, it begins as a good idea and gets warped and bastardized into a means of scalping “free money” for banks. This is particularly true in the age of prop accounts and banks masquerading as prudent intermediaries but operating as the largest hedge funds [...]
The headline employment growth for May 1974 totaled 165,000 jobs. That followed a weaker report from April where only 89,000 new jobs were created. Only a few months before, the headline beancount of job quantity was 304,000. For the seven months between November 1973 and May 1974, the headline averaged +135,000. That was notable because the entire period fell within [...]
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