Barclays has received all the media attention in the past few days after announcing its exit from Africa. Specifically, the bank intends to divest enough of its 62% stake in the Africa unit so as to skirt tougher UK regulations intended to “ringfence” domestic operations; to keep the global bank from potential global financial horrors recurring and devastating once more [...]
At first economists wanted to just ignore oil prices, as they were to be “transitory” or even beneficial to consumers everywhere around the world. The fact that economists would actually admit that low oil prices would be helpful (in a vacuum, they are) showed only the desperation given the seriousness of the “unexpected” surrender. Mainstream monetary theory rejects all falling [...]
When the Federal Reserve through its Open Market Desk engages in a transaction under QE or the current balance sheet stabilization (reinvesting maturing securities) with a primary dealer, the direct effect is to increase the dealer’s account with the Fed while decreasing that dealer’s stock of securities. On the other side, absent any offsetting absorptions (either intentional or autonomous), FRBNY’s [...]
The advance estimate for Q4 GDP was not appreciably different than the preliminary figures, changing +0.6% into +1.00033%. It wasn’t anywhere close to enough of a revision to meaningfully alter the picture of the 2015 economy. The average growth in 2015 was just 2.40% (until the next revision next month) compared to 2.43% in 2014; while the average of SAAR [...]
So thorough is the unwinding, they don’t know what to do about it. By “they” I mean policymakers, economists, the media, etc. For years, monetarism has been described as money printing, therefore all that was necessary was just the threat. Then the events of August 2007 intruded, and what was implicit became explicit. Central banks globally responded, since the wholesale/eurodollar [...]
When Janet Yellen testified to Congress last week, she was as usual careful with her words. Alan Greenspan once called it “mumbling with incoherence” but there is very little left to rambling in Yellen’s predicament. Where Greenspan was once the “maestro” and Bernanke the “hero” Yellen is stuck holding the bag, and I think she knows it. In truth, there [...]
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, [...]
The orthodox intention behind NIRP is that by taxing idle “money” it will make banks put it to use. Setting aside relevant objections about what bank “reserves” actually are, negative nominal rates used in this fashion just don’t work that way. This is not an arguable point; it has been proven across 618 days or just shy of 21 months. [...]
Everyone knows the Titanic sank in April 1912, and if they didn’t they were reminded only a few years ago at its centennial. Less well known, for good reason, is the novel Futility, written by Morgan Robertson in 1898 years before Titanic had even been conceived. Robertson’s book includes the largest vessel ever constructed and he even offered it the [...]
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 [...]
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