With interest rates tumbling all over the world, gold should be killing it. Instead, gold is getting killed. The major correlation for this precious metal has been the bond market, falling yields. And that makes intuitive sense; gold as a hedge pays no interest, but if competing safety instruments like UST’s end up paying up a lot less then gold [...]
Germany’s Finance Minister Olaf Scholz ignited and invited controversy today when he signaled that the federal government is looking at a possible suspension to constitutional budget measures. With a nasty political fight certain to follow, even temporarily adjourning the country’s so-called debt brake would not be easy. With Chancellor Angela Merkel’s party already in a precarious position, one might wonder, [...]
We certainly don’t have a crystal ball at the ready, and we can’t predict the future. The best we might hope is to entertain reasonable probabilities for it oftentimes derived from how we see the past. Which is just what statistics and econometrics attempt. Except, wherein they go wrong we don’t have to make their mistakes. For example, in the [...]
Making the rounds on Twitter yesterday (h/t to M. Simmons) was a quote attributed to Minneapolis Fed President Neel Kashkari. I can’t find any confirmation for it so it could be one of those fake news tweet situations. And the only reason I include it here is because it sounds like something he would say; the urge to pile on [...]
The lull in US consumer spending on goods has reached a fifth month. The annual comparisons aren’t good, yet they somewhat mask the more recent problems appearing in the figures. According to the Census Bureau, total retail sales in January rose 4.58% year-over-year (unadjusted). Not a good number, but better, seemingly, than early on in 2019 when the series was [...]
Rolling over in credit stats, particularly business debt, is never a good thing for an economy. As noted yesterday, in Europe it’s not definite yet but sure is pronounced. The pattern is pretty clear even if we don’t ultimately know how it will play out from here. The process of reversing is at least already happening and so we are [...]
It’s a palpable impatience. Having learned absolutely nothing from the most recent German example, there’s this pervasive belief that if the economy hasn’t fallen apart by now it must be going the other way. The right way. Those are the only two options for mainstream analysis (which means it isn’t analysis). You can see it in how everything is framed. [...]
According to analysts and economists who watch these things, Germany’s IFO Business Climate Index was expected to continue its rise. Having purportedly bottomed out back in September, like other sentiment indicators this one had been on the rebound, too, if, though, much less than those others (especially the “stimulus” loving ZEW). While maybe not suggesting the turnaround we had been [...]
Even though it was a stunning turn of events, the move was widely celebrated. The Federal Reserve’s Open Market Committee, the FOMC, hadn’t been scheduled to meet until the end of that month. And yet, Alan Greenspan didn’t want to wait. The “maestro”, still at the height of his reputation, was being pressured to live up to it. The Fed [...]
There will be more opportunities ahead to talk about the not-QE, non-LSAP which as of today still doesn’t have a catchy title. In other words, don’t call it a QE because a QE is an LSAP not an SSAP. The former is a large scale asset purchase plan intended on stimulating the financial system therefore economy. That’s what it intends [...]
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