Early last month, the Bureau of Labor Statistics (BLS) reported that the unemployment rate in the United States had fallen to just 3.6%. It was the lowest in half a century, seemingly an amazing feat for the most puzzling boom ever conceived. Everyone says it is going gangbusters, but is everyone saying so simply because everyone says so? This one [...]
Normally, it’s a very good sign when the yield curve steepens. If longer-term rates are rising faster than those on the shorter end of the curve, it would say the bond market is forecasting a better probability of normal. Given where interest rates have been the last decade plus, this kind of steepening is what should’ve happened in 2017 if [...]
Reality has begun to dawn across Wall Street’s Economists. This year isn’t going to go the way everyone thought. Even as late as last November and December, the optimism was still sharp about how what was taking place at that moment would be nothing more than a transitory soft patch. They still listened to Jay Powell. In its projections for [...]
When the eurodollar futures curve first inverted a year ago in the wake of May 29, 2018, it was the market beginning to hedge against serious and rising risks of something that would force the Federal Reserve to turn around. When that might happen, or how many cuts would eventually follow, those were questions the immediate inversion couldn’t answer. All [...]
You do wonder sometimes whether the person responsible for writing these things ever cringes while they do so. Are they ever shocked by a sudden bout of conscience? Then again, most of it is bland boilerplate language and when it’s not the difference is hidden under a maze of intentionally induced complexity or misdirection. The statement the FOMC released after [...]
Trade wars are rapidly turning into subprime mortgages. A few billion in tariffs will have wrecked the entire global economy, they’ll claim. Just like all that toxic waste subprime mortgage fiasco led inevitably to the Great “Recession” and global panic. Neither will be true, except insofar as both were symptoms of the far greater cause. The other thing actually responsible [...]
The Bureau of Economic Analysis (BEA) piled on more bad news to the otherwise pleasing GDP headline for the first quarter. In its first revision to the preliminary estimate, the government agency said output advanced just a little less than first thought. This wasn’t actually the substance of their message. Accompanying this first revision was the first set of estimates [...]
One year ago today, something huge broke inside the global monetary system. Exactly what, we may never know. I believe it was something to do with collateral and securities lending, the kinds of things that brought AIG to its knees in what doesn’t seem like all that long ago. In a rush, over several days, everyone around the world piled [...]
In May 2018, the European Parliament found that it was incredibly popular. Commissioning what it calls the Eurobarameter survey, the EU’s governing body said that two-thirds of Europeans inside the bloc believed that membership had benefited their own countries. It was the highest showing since 1983. Voters in May 2019 don’t appear to have agreed with last year’s survey. For [...]
Tomorrow will be one year since the global monetary system broke. Or, for the sake of accuracy, broke again this for the fourth time. There had been warnings going all the way back to September 2017 about how all was not right in the realm of reserve currency. These would take on added importance at the outset of 2018, an [...]
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