In 1998, Time Magazine asked Paul Krugman to write up a futuristic piece for the publication’s 100th anniversary issue. Time, pardon the pun, has not been kind to a lot of what he said, but in particular his whimsical predictions for the then-newly expanded internet. The growth of the Internet will slow drastically, as the flaw in 'Metcalfe's law'–which states [...]
For the first time in three years, oil inventories in the United States are not rising precipitously more than the seasonally expected. At the start of both 2015 and 2016, oil stocks exploded higher as oil prices crashed, all related to the “dollar” flex on the front end of the futures curve creating sufficient contango necessary to strip that oil [...]
The only unequivocally positive aspect to the looming “stimulus” debate is the immense political theater it will generate, and has already generated. Hypocrisy will be standard fare, and in any number of ways. For every Occupy Wall Street Obama supporter who found himself likely for the first time in his life enthusiastically embracing “record high stocks” in 2013 will now [...]
It has been out of hand for some time, but the longer it goes the further from sense it can get. Today’s news is apparently about a bipartisan effort for $1 trillion in “stimulus”, as if the last $1 trillion in “stimulus” had never happened. Apparently eight years is enough for memories to have been expunged, or as if IRS [...]
Nowhere is the “dollar’s” effects more damaging than in any real economy dependent upon it. It is quite fitting that on a day when the PBOC surprises with a desperate move to reduce the RRR for big banks, who have already been for some time the outlet for massive RMB liquidity, Chinese officials release economic statistics that show little or [...]
For the first time since 2014, the CPI was above 2% in December. Unlike the PCE Deflator, the CPI has been above 2% on other occasions after the 2012 slowdown, notably in mid-2014 when policymakers were making the same extrapolations as to its meaning. The inflation index had been as high as 2.13% in May 2014, before the economy of [...]
Earned income rates adjusted for inflation have been near zero growth for two months in a row. Real average weekly earnings were revised significantly lower in November 2016, turning a small 0.5% gain into just 0.2%. The latest figures for December estimate the same lack of growth to end the year. In seasonally-adjusted terms, weekly earnings did not keep pace [...]
Like China, manufacturers in the US report feeling better about manufacturing. Also like China, this is nothing new. The ISM Manufacturing PMI was estimated to have increased to 54.7 in December, up from 53.2 in November. That was the highest overall figure since December 2014. This is consistent with other sentiment surveys showing a noticeable increase in optimism since summer. [...]
China’s official manufacturing PMI fell just slightly for December 2016, after rising for November to the highest since mid-2014. The overall index pulled back to 51.4 from 51.7 the previous month. The subindex for New Orders remained steady at 53.2, matching the highest point since July 2014. These PMI estimates suggest that China’s experience with the “rising dollar” has passed. [...]
It is all but forgotten now, but in the latter part of 2012 there was widespread angst about a looming “fiscal cliff.” The so-called stabilizers put in place during the crisis were set to expire on January 1, 2013. That’s the deal with stabilizers, as they are always meant to be a temporary boost during recessions. The fact that there [...]
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