A stumble even in the Establishment Survey is not at all unexpected even in the best of times (in reality as opposed to purely statistical assumptions), however the furor unleashed over the March “weakness” is everything you need to know about how much surety rests within the estimate to begin with. Like human psychology, anyone who possesses a high degree [...]
Usually references to April 15 are reserved for income taxes, but in this case that preference may be superseded. Recognizing the illiquidity pattern of the “rising dollar” means being vigilant toward the next expected instance. If October 15 was an “event” followed by January 15 in succession, then it is reasonable to at least anticipate conditions for April 15. To [...]
It wasn’t supposed to be the case that China would steal all the attention from Japan. We are only a few days away from QQE’s second anniversary and all expectations were purposely set to be a full-blown revival by now. The dedication and skill with which the Japanese economy was handled was meant to conclusively demonstrate with no debate that [...]
Taking a look back at economic projections from orthodox models (and the theories they incorporate and encompass) is more than just a review of past econometric failures. That is the most obvious component as the ability of mainstream models to forecast actual economic conditions is inarguably flawed beyond repair. That calls into question, certainly, current outlooks based upon the same [...]
So far the economic retrenchment has persisted into February, outlasting any significant January weather. The latest worrisome figures came in the form of durable goods and especially capital goods. The former is another peg in the consumption side while the latter is one of the few glimpses of wealth creation (if far from a complete one). Both sides, demand and [...]
While the more interesting action has shifted to funding markets, the treasury curve remains at least relevant to the analysis of all those ebbs and flows. For the most part, the yield curve in UST has found itself stuck in a rather tight range right at the bottom of the “cycle.” While that would be noteworthy in one or two [...]
Credit and funding markets have been pretty much defined by “dollar” behavior for most of March in the same manner that defined December and early October. At the outset, it looked as if credit markets had turned the “other” way with interest rates rising and some of the downstream “markets” no longer under such steady pressure. The culmination of that [...]
In the days before 2007, the idea of monetary “stimulus” was relatively straight-forward in theory as well as (seemingly) practice. A central bank declared that it would reduce an interest rate target and the “market” would respond by doing the work for it. In other words, all that was needed was an indication and banks would make it so as [...]
One of the primary pillars of even the tepid “recovery” of this cycle is undoubtedly auto sales. We can have a debate as to the influence of monetary policy in this arena, especially as auto loans have (along with student loans) been practically the only direct conduit of credit into the real economy. Clearly, despite the heavy flow there, auto [...]
So far the heavy buying after yesterday’s FOMC admission has held on the eurodollar curve. Most of the contracts along the curve have only given back a few bps after the 15-25 bps moves everywhere yesterday afternoon. The salient interpretation of trading along these lines is one of deep and abiding concerns over “dollar” liquidity and the economy. With the [...]
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