Like industrial production, the condition of oil inventory in the US was updated today in contradiction of the expectations driving Federal Reserve models expecting “transitory” weakness to simply pass into history. Unlike the virtual conditions for the FOMC, crude oil markets are obliged to respect both the eurodollar and the physical realities of physical commodities. Last week, the US EIA [...]
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, [...]
It is perhaps the perfect situational irony of this economic age, with the FOMC set to end its “emergency” policies by raising rates for the first time in a decade the very same day that the very same outfit, the Federal Reserve’s staff, just declared that the past cycle may have long since peaked. The monetary policy “exit” is a [...]
Oil prices plunged, junk bonds hit a 2 ½ year low, stocks took a nearly 4% hit, a junk bond fund halted withdrawals, the country’s biggest pipeline operator cut its dividend by 75% and two of the biggest mining companies in the world suspended theirs completely. It was not a good week for financial markets. And the Fed meets to hike [...]
One of the problems with GDP as a statistical Swiss-Army knife for economic considerations is its very methodology. This doesn’t mean that there aren’t good and sound reasons for that kind of construction and presentation, only that in making such choices some elements are left out; even important pieces. In this case, I refer to the double counting problem which [...]
Given that Black Friday weekend, including Thanksgiving itself, was uninspiring, the fact that the Commerce Department’s estimates for retail sales for all of November were again among the worst shows that Black Friday actually remains a pivotal part of the holiday setup. The trend has been to dismiss the traditional Christmas buying season kickoff as if earlier discounts might have [...]
Now that Kinder Morgan has come out with a massive dividend cut, I think it will get harder to ignore that this isn’t just about crude oil prices and the death of “transitory.” There is a financial element here that is perhaps even more important. Kinder Morgan Inc., the biggest North American oil pipeline operator, cut its 2016 dividend by [...]
The fact that there is almost universal recognition of a “manufacturing recession” not just here but spreading across the world is a significant change. After resisting and ignoring as much as possible for more than a year, economic weakness is now no longer unthinkable. This is, however, no mere academic exercise as there are very real consequences as the former [...]
Global Growth Recession risks are low and growth should improve in 2016. Excess supply is especially apparent in the raw materials/commodities sectors. This state of overcapacity/supply and a strong dollar combined from 2014-2015 to create an environment of falling prices and sluggish growth in global manufacturing. The services sector continues to perform well. Continued expansion in the US coupled with a recovering [...]
The numbers all change with each month, but nothing really changes. And that includes how the economy changed in 2012 and clearly again in 2015. By raw count of the payroll figures, there were positive numbers in every location in the latest update as only full-time employment was close to zero growth (only +3k for November). The labor force grew [...]
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