The unfortunately established narrative for all economic accounts in 2014 relates (still) to depressing winter earlier in the year and “better” from there. At first glance, the latest figures on durable goods seem to be following that idea, though a “rough patch” has perhaps developed over the past two months. A wider context, however, is really needed as the pattern [...]
The problem with European monetarism is not that it is trying to swim against the tide of fragmented “markets” and national boundaries that represent very real hurdles in terms of legal and systemic bottlenecks. For the most part, everything that the ECB has tried, including a great deal that predates the bright spotlight on Mario Draghi, has led to precisely [...]
With all of the credit market fireworks that leaked into stocks, the pace of economic reassurance from “authorities” has been rather steady and a bit more emphatic. Despite the attempts at managing perceptions, there has been very little actual success in persuading. In many ways this is like the unfolding ebola drama in that there is a palpable disconnect between [...]
The reason I have been characterizing the ECB’s actions since this summer as “desperate” is entirely due to the fact they are simply redoing things and expecting everyone to simply assume they are acting anew. That may not be entirely the case with their obsession with Eonia (more on that below), but narrowing the corridor has been the active policy [...]
IBM blames the cloud for its dismal results, but the fact is that IBM should own the cloud outright (figuratively, of course). If the business has changed so much in the past few years due to customer shifting, then why wasn’t IBM leading that process? Why are they now actually admitting what amounts to a dereliction of managerial duties? Since [...]
Yesterday, in the wake of some intense credit market drama, St. Louis Fed President James Bullard acknowledged the obvious. Quoted in the Wall Street Journal, Bullard showed just how upside down these “markets” have become. “Inflation expectations are dropping in the U.S., and that is something that a central bank cannot abide,” Mr. Bullard said. Referring to the process of [...]
The PBOC continues along with its path of “targeting” liquidity rather than “flooding” as has been done in the past. Expectations for Chinese action, however, seem to be resistant to getting that message. This is not something that is just now being applied, as if a sudden and unanticipated change in thinking. The entire default drama at the beginning of [...]
The problem with being long gold, or even a fan of gold as anathema to central bank “flexibility” in central planning, is that you are often reminded the messiness of its modern nature. Gold as money, properly understood, meant money as property which is why physical metal fit so well for maybe all of “civilized” human history. However, the unassailable [...]
The good news for global “markets” is that the eurodollar curve suggests some further relief from the persistent “tightening” that has gripped the “dollar” system since July. The bad news is that the curve is now less enthralled with the idea that the FOMC might actually raise rates as they say they will. That includes ignoring several assurances offered just [...]
The orthodox notion of monetary policy, following its Keynesian root, is that spending for the sake of spending will lead to a healthy economy. It does not matter, to this philosophy, how or why that spending takes place; only that it does. If, for example, the Federal Reserve can “stimulate” the interest rate sensitive sectors of the economy, like automobiles, [...]
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