New Home Sales fell sharply in December 2016, from a seasonally-adjusted annual rate of 598k in November to 536k. That wasn’t unexpected given the behavior of interest rates since August in particular. It might suggest further declines in new sales as well as construction of new homes in the months ahead. In the bigger picture, interest rates just should not [...]
From the outside, it appears as if Wall Street operates like a bureaucracy. There is an enormous amount of paperwork, endless committees who conduct endless meetings, and layers of management supposedly managing the movement of that paperwork as well as the meetings of those committees. The idea is simple enough, to make it appear as if there is tremendous weight [...]
Industrial production rose year-over-year in December 2016, the first plus sign in more than a year. For the month, IP was up 0.5% from the same month in 2015, following declines of 0.7% in each of the prior two months. In seasonally-adjusted, month-over-month terms, IP increased by 0.8% in December after being essentially flat for four months before. Under normal [...]
Chinese officials reported that exports fell 6.1% in December, following a downward revised 1.5% decline in November that was originally reported as a 0.1% gain. While the media talks about disappointment after it appeared Chinese exports might have been finally breaking out, and therefore global growth, December’s result simply continues the same pattern repeating over and over again. Over the [...]
The term “brick and mortar” has come to be a mostly 21st century antonym for online shopping. It was first used in the banking industry as far back as the early 1970’s. Banks led the adoption of innovations, foreseeing the possible gains in communication technology and not just in the eurodollar context of “floating” currency (shadow banking). Computerization even at [...]
The biggest problem with “reflation” is that it doesn’t live up to what the word is supposed to mean. That has been true in each of the past attempts at it, but is even more the case in this latest one. Yet, to hear it described is as if we are the verge of an explosion in growth unparalleled at [...]
The FOMC minutes published today for the December 2016 policy meeting are being shopped around in much of the mainstream as “hawkish”, or at least a continuation of the “reflation” impulse. The commentary related to the more detailed window into the last monetary policy decision is being framed as if more so to that upside. Policymakers were clear that the [...]
For the most part the “reflation” narrative has focused on nominal interest rates. That, for once, actually makes some sense given interest rates are really at the center of all this. Stocks are whatever they are, but whether you figure the Federal Reserve and monetary policy or just the economic reflections of interest rates, the nominal world does seem to [...]
Wages and slack have been at the center of the economic discussion for almost three years now. The massive shedding of employees that took place during the Great “Recession” left behind a huge pool of potential labor for the economy to work through as it was expected to recover. That never happened. So instead, economists have been working backward to [...]
As I wrote earlier, in orthodox economics it is actually possible to declare a depression and a recovery at the same time. The Federal Reserve’s statistic for Industrial Production actually contracted for a fifteenth straight month in November, an occurrence observed only eight other times in just about a century of data. Thus, if IP, as one of the four [...]
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