It was the introduction of two Latin words that doomed the modern discipline of economics. As the mathematical modeling craze swept into what is now econometrics, the derivation of theories and, more importantly, the statistical “evidence” of those theories rested upon ceteris paribus – “with other things the same.” It is difficult to accept even the basic proposition that one [...]
So far in China this year there have been defaults and “bailouts” in the credit markets, but they are tiny in relative comparison to everything else. That they have occurred at all is why they have grabbed so much attention. We all have some inkling of the credit and monetary inequities that are roiling inside the Chinese economic gut, but [...]
There is more than one way to look at the emerging markets and frame the debate about what should or might be done. I think this quote from the Financial Times, however, falls outside the boundaries of reason: “So far we are still not seeing the impact of the currency devaluation we had last year,” said David Beker, economist with [...]
Holiday sales estimates are already being trimmed, with the current year set to be the weakest since the Great Recession. Of course, it matters whether or not you have access to asset inflation, as retailers for the more affluent are expecting better results. Reuters spells it out succinctly, “As result, low-income Americans will again have a less-merry season than affluent [...]
I spend a lot of time on Japan not simply because it is the originator for the great QE experiment, rather the similarities between the US and Japan are well-worn and numerous. The primary interest in 2013, with the central banks of both going all out in monetary cajoling, is that those similarities are growing ever-closer. A few days ago [...]
In the middle of September, nearly a full year after the yen began its devaluation, the Japanese administration held talks with business lobbies and labor unions. The focus of the affair was to make sure businesses knew that the intentional appeal of yen devaluation and thus commodity inflation was doomed absent wage growth. “’Our mission with these talks is to [...]
The old military axiom that battle plans never survive first contact with the enemy appears to have a corollary in the central banking world of interventionist finance. The allure of QE in Japan was an irresistible impulse to believe that a durable solution was to be had by retrying old ideas in a different scale. While that appeals to the [...]
The Markit Manufacturing PMI for the Eurozone hit a 24-month high just above the magical 50 line. While the Services PMI fell just short of 50, it was at 49.6, a level not seen in 18 months. These snapshots of economic function have provided a spike of optimism against the dismal European depression that has been unshakable. There should be [...]
Coincident to the relatively boring retail sales report, the Census Bureau estimated declining trade fortunes across the whole goods supply chain. In the seasonally adjusted data, total trade sales fell 0.1% in April after declining 1.2% in March. Compared to April 2012, total sales were up only 1.5% (meaning they declined on a real basis). Most of the April decline [...]
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