It infects every boardroom across the world. Big business requires decent forecasting, yet time and again it seems they are deprived of what they desperately need. Instead, even after this last decade, the world’s largest companies continue to be surprised by weakness that is far more prevalent than strength. It has been the one constant. Central bankers declare their policies [...]
Nothing the Fed did today, or has done up to today, has changed the curves. Eurodollar futures and UST’s, they are both still inverted. The former sharply inverted. The only thing that has changed since early January is the narrative – and not in a charitable way. It is treated as a positive when it is a pretty visible signal [...]
TIC update for December 2018. Given what happened in that particular month, yeah, this seems about right: Here’s the same thing smoothed out on a 6-month basis. Plus an added reminder. Just to refresh: That’s a shame because TIC will tell you so much more about the global economy and the changes taking place within it than the Establishment Survey [...]
In January 2017, there was a lot of praise for Goldman Sachs especially in London. This stood in obvious contrast to another global peer being savaged. While Deutsche Bank couldn’t pull its name out of the sewer, GS’s London unit was heralded for standing up when the market needed it. Brexit was a fascinating story in ways that had absolutely [...]
On Friday, the CFTC posted its COT data for the first week in 2019. For crude oil, capitulation. For US Treasury bond futures, capitulation. In the latter financial market, unsurprisingly the net market position utterly collapsed during December. From a relatively high (meaning market overall short) +58k contracts that last week in November when everyone piled into liquidity hedges, the [...]
I’ve observed a lot that’s purely absurd the last eleven years, trying hard to write up as much of it as I can. It's worth the effort in terms of education but also to reveal what's really going on. The catalog is too long to republish here in its entirety. One of the most ridiculous anecdotes, however, was pieced together [...]
As the saying goes, the plural of anecdotes is not data. It might also be said that the plethora of anecdotes does not make for accurate news. Before around mid-December 2018, media outlets particularly those like Bloomberg and the Wall Street Journal anxious to vindicate the technocrats at the Federal Reserve couldn’t print enough stories about the labor shortage. Barely [...]
The payroll report wasn’t actually the first. The Treasury Department filed its Treasury International Capital (TIC) update yesterday, about two weeks late due to the federal government shutdown. However, since nobody follows it and the figures relate to a lot that’s beyond the US economy it doesn’t count in the mainstream view. That’s a shame because TIC will tell you [...]
Men have long dreamed of optimal outcomes. There has to be a better way, a person will say every generation. Freedom is far too messy and unpredictable. Everybody hates the fat tails, unless and until they realize it is outlier outcomes that actually mark progress. The idea was born in the eighties that Economics had become sufficiently advanced that the [...]
It was the most common catchphrase of 2017, interest rates have nowhere to go but up. Maybe it was doomed from the start given that Alan Greenspan was among the more prominent commentators expressing this view. In his mind, the bond market was in a bubble and the party was already over. His successors at the Fed, following in his [...]
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