Most people would look at a 40-month deviation as being rationally altering, maybe even something so permanent. The Fed, on the other hand, along with economists, have convinced themselves that somehow three and a half years is but a temporary detour. And so monetary policy and the recovery outlook itself are supposed to somehow straddle that inconvenience while still emitting [...]
What is taking place on the wholesale level of the supply chain is simply unprecedented. Admittedly, the current iteration of the wholesale data series only dates back to 1992, so there is some possibility of a similar disparity at some point in actual economic history. However, at present, inventory continues onward with only a slight deviation and slowing recently while [...]
It may be unexpected to economists, but the sudden and uniform economic downside that is either appearing or strengthening almost everywhere in the world is closely tracking the wholesale “dollar.” In many cases, that flows through China and so is given that gloss, but there can be little doubt now about either cause or effect. In Japan, machine orders (a [...]
The Census Bureau updated US trade activity for August, with export activity dropping almost 11% year-over-year. The global economy is clearly falling apart, no matter how much economists wish to see the dollar (exchange rate fluctuations) where the “dollar” (wholesale finance pulling back leading to economic disarray) already is. Export activity is only a little short of the trough of [...]
On September 28, Mark Haefele, Global CIO at UBS Wealth Management, wrote at CNBC.com there was much more to the central banking offerings than currently employed. The implication, obviously, was a reassuring call to not heed any darkening outlook. Blaming that upon “overanalyzed data”, Mr. Haefele insisted that investors were becoming far too pessimistic given the potential monetarism yet untapped. [...]
The superficial transcendence of stocks notwithstanding, there continues a deeper and more devious trend in financial markets. As noted earlier today, while stock rationalizations were stoked by the inconsistent logic of “lower for longer”, other markets, the “dollar” in particular, are being thoroughly infected by great doubt. In some open episodes, that doubt has turned to fear, but the permeation [...]
Asset markets on Friday reversed course after fully digesting a payroll report that has been universally assailed. The thinking is, apparently, that the Fed will have no choice but to stay on the sidelines now. That view is certainly bolstered by the FOMC’s inaction already in September, so worsening economic fortunes in the US apparently removes any flexibility anytime soon. [...]
An interesting side benefit of the Fed having pegged interest rates effectively to zero and having accomplished so little with QE, is that we get to see markets' self-correcting tendency. Consider what has happened over the last year or so since the Fed made it clear their goal was to start normalizing policy, i.e. raise interest rates. As I've pointed [...]
You get the same sense from factory orders that you get from payrolls – the economy is obviously and significantly slowing but there isn’t yet any crispness or urgency to any of it. I think that is the business environment reacting to both revenue reality (falling off) without being ready to commit to more serious negative adjustments just yet. In [...]
The doubts about the payroll report were taken as no doubts at all in “dollar” trading. The three indications I gave yesterday in terms of representing liquidity were all pushed farther after the jobs data essentially confirmed the direction where this is all likely heading. While the yen may have been more muted, and the “shock” wearing off in later [...]
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