Ever since the price of oil became a major economic theme last fall, even before the now-ubiquitous “dollar” though they are essentially one and the same function, economists and especially those at the FOMC have been in a rush to reassure that the oil price collapse was both going to be short-lived and a huge benefit to consumers. One didn’t [...]
Under the traditional formula for viewing currency movements, a rising currency is believed to be a huge impediment for economic expansion as exports “become relatively more expensive” against trading partners and competitors. This is a two-dimensional view in three-dimensional space as it leaves out the very necessities of finance. It isn’t just straightforward that one causes the other, as the [...]
As expected from home construction figures for February the level of starts has once again reverted toward permits. For some reason, especially in apartment construction, new starts of multi-family dwellings far outpaced permit levels in the “rebound” into the middle of 2014. There is no clear explanation for the divergence, especially since permit levels show quite a bit of caution [...]
So far Europe’s QE is having some trouble gaining pace. As of March 13, the ECB reports that €9.7 under the Public Sector Purchase Program has been carried out, or about half the rate that was anticipated. That may come as a shock to those not familiar with the ECB’s heightened action of the past eight months, but it is [...]
It’s certainly not quite the “butterfly effect” but the reality of the overall arrangements of the global economy is shockingly simple. The details, methods and interactions of the “dollar” can be incomprehensible at times, especially since there is no directly observable and thus plainly unambiguous data, but once the “big” moves entrench all that complexity recedes in importance (at least [...]
The issue of bank hoarding has become nearly mainstream as the size of the move into UST is now too large to ignore. It wasn’t so much an issue last year, apparently, as there was less to suggest taking very pessimistic portfolio allocations was anything other than an anomaly of regulation. This year the idea of prudence as opposed to [...]
The function of recession is not just some negative numbers that appear from seemingly nowhere, though that is how convention sees it of “unforeseeable” trends and “shocks. It may take the NBER years in some cases to declare, officially, a cycle peak but that doesn’t mean there aren’t warning signs much closer to the event. Among them is, again, not [...]
We know that credit and funding markets took a nasty turn in December, but it wasn’t until economic data released just recently that we gained a better appreciation about why that might have been. In the relative blindness of “realtime” such market-driven bearishness could be self-contained within purely financial factors alone, and thus opens the possibility of ambiguity about why the [...]
The FOMC has been talking, so we hear, about changing “forward guidance” to indicate a potential rate hike sooner rather than later. They had already changed the basis of “forward guidance” back in September which largely negated what forward guidance actually meant. The concept is only pliable in the manner in which monetary theory has to follow “rational expectations.” Whenever [...]
The large selloff in UST on Friday has left many wondering what happened. While the jobs report was certainly a catalyst, it wasn’t really out of line with prior months. It’s not as if credit markets were suddenly awakened to the possibility that Yellen’s FOMC may do what it says, so I don’t think that the Establishment Survey provided any [...]
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