The “dollar” problems continued this morning as several proxies continued toward new lows. Copper fell to as low as $2.342 (July contract still) while crude is down close to $47 in the front months. The back end of the WTI curve, perhaps more importantly with respect to growth and fundamentals tied to the “dollar”, fell to new lows. The Brazilian [...]
The old cliché is that everything of significance in life is a marathon rather than a sprint. In Japan, such sentiment strains all reason as there is no way that any marathon, economic or otherwise, could possibly be expected to last more twenty-five years. But here it is in 2015, thirty years after the Plaza Accord and BoJ’s first massive [...]
The benchmark revisions (trend-cycle) to durable goods left us with a smaller estimated economy but that wasn’t supposed to be a problem because all that matters supposedly is what comes next. In other words, the cycle was already deficient so the scale of that deficiency was not meant to suggest anything about the next phase, according to economic projections. If [...]
There are numerous problems created by asset bubbles and many more as a result of a series of them. The financial system becomes highly destabilized, especially as authorities and policymaking bodies misunderstand them to the point of determined stasis rather than courting necessary evolution and reform, which in turn has the same effect on the economy. This is not a [...]
IBM continues to be a bellwether assessment on domestic and global capex, though in 2015 almost everyone wishes it wasn’t. To that end, many have started to downgrade Big Blue based on age in the business cycle and, of course, currency. In many ways, the latest quarterly stumble is the mirror image of when all this started. Plotting IBM’s transformation, [...]
Sticking with the history of the “dollar” of these past two years, economists and gold de-buggers had to have been at least initially encouraged by what they saw outwardly of interest rates and related financial factors in 2013. Almost as soon as “taper” became a mainstream concept, right at the start of that May, the treasury curve steepened and nominal [...]
The single family housing market, at least from the view of new construction, continues on as it has for the past two years. There isn’t really much taking place, as new construction plods along in a curious stasis, sort of continuing to scrape along the bottom of the barrel. Permits and starts were again near 700k, SAAR, but that remains [...]
Japanese household spending increased 5.5% in nominal terms in May; 4.8% in real spending growth. That was the first monthly increase since November and since it was a positive number, and not as typically close to zero, it is being hailed as another great sign of QQE success. With Q1 GDP revised up to nearly 5%, economists are back to [...]
Having now passed the anniversary of the “rising dollar”, it is interesting to see the related and continued effects on the stock bubble(s). As should be obvious by now, stock buybacks, funded via corporate bonds and loosely categorized C&I loans, are responsible for the post-QE3 nearly uninterrupted rise. Repurchases are forming a separate “liquidity” conduit, indirect leverage if you will, [...]
US industrial production was slightly higher in June on a seasonally-adjusted basis, but the year-over-year growth rate fell to a new “cycle” low. While the monthly measure was 0.33% above May, it was up only 1.54% over June 2014 following a Y/Y gain of just (revised) 1.62% last month. The 6-month average is again below 3% for the first time [...]
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