Category Archive: Global Macro

No Acceleration In Industry, Either

Industrial Production in the United States was flat in January 2017, following in December the first positive growth rate in over a year. The monthly estimates for IP are often subject to greater revisions than in other data series, so the figures for...

United States Economic Freedom Tumbles To Historic Low

After eight years of the regulation-happy Obama administration, the United States has undergone a huge slide into the 17th most economically free country in the world, according to the Heritage Foundation’s 2017 Index of Economic Freedom.

Emerging Markets: Preview of the Week Ahead

EM FX ended last week on a soft note, as some risk off sentiment crept back into the markets. The dollar gained broadly on Friday despite lower US rates as bonds rallied, the yen gained and equities sold off. Markit PMI for February Tuesday and FOMC...

Their Gap Is Closed, Ours Still Needs To Be

There are actually two parts to examining the orthodox treatment of the output gap. The first is the review, looking backward to trace how we got to this state. The second is looking forward trying to figure what it means to be here. One final rearward...

Emerging Markets: What has Changed

Head of Samsung Group Jay Y. Lee was formally arrested on allegations of bribery, perjury, and embezzlement. The assassination of Kim Jong Un’s half-brother suggests the political situation in North Korea may be heating up. The Polish central bank is...

Why Aren’t Oil Prices $50 Ahead?

Right now there are two conventional propositions behind the “reflation” trade, and in many ways both are highly related if not fully intertwined. The first is that interest rates have nowhere to go but up. The Fed is raising rates again and seems more...

U.S. CPI after the energy push

The Consumer Price Index for January 2017 rose 2.5%, pulled upward by its energy component which thanks to oil prices now being comparing to the absolutely lows last year saw that part of the index rise 11.1% year-over-year. Given that oil prices...

This Is How the Status Quo Unravels: As the Pie Shrinks, Everybody Demands Their Piece Should Get Bigger

The politics of the past 70 years was all about horsetrading who got what share of the growing pie: the "pie" being cheap energy, government revenues and consumption, sales and profits. Horsetrading over a growing pie is basically fun. There's always a...

Bi-Weekly Economic Review

The economic data since my last update has improved somewhat. It isn’t across the board and it isn’t huge but it must be acknowledged. As usual though there are positives and negatives, just with a slight emphasis on positive right now. Interestingly,...

Real Wages Really Inconsistent

Real average weekly earnings for the private sector fell 0.6% year-over-year in January. It was the first contraction since December 2013 and the sharpest since October 2012. The reason for it is very simple; nominal wages remain stubbornly stagnant...

A New Frame Of Reference Is Really All That Is Necessary To Start With

In the middle of 1919, the United States was beset by a great many imbalances. Having just conducted a wartime economy, almost everything before then had been absorbed by the World War I effort. With fiscal restraint subsumed by national emergency,...

Want to Bring Back Jobs? It’s Impossible Unless We Fix these Four Things

It's your choice, America--you can keep your cartels and the captured government that enables and protects them, or you can fix what's broken and unaffordable. If there is any goal that might attract support from across the political spectrum, it's...

Brazil: Continuing Problems

The cruelest part, perhaps, of this economic condition globally is how it plays against type. In all prior cycles, economies of all kinds and orientations all over the globe would go into recession and then bounce right of it once at the bottom. It was...

Emerging Market Preview of the Week Ahead

EM FX ended last week on a firm note. Falling US rates allowed many foreign currencies to gain some traction. This week, a heavy US data slate is likely to test the market’s convictions on the Fed, with January PPI, CPI, IP, and retail sales all...

No China Trade Interpretations

The National Bureau of Statistics (NBS) of China does not publish any of the big three data series (Industrial Production, Retail Sales, Fixed Asset Investment) for the month of January. It combines January data with February data because of the large...

Emerging Markets: What Has Changed

Reserve Bank of India signaled an end to the easing cycle. S&P moved the outlook on Indonesia’s BBB- rating from stable to positive. The ruling Law and Justice party in Poland may be backing off of plans to force banks to convert $36 bln in foreign...

Jobless Claims Look Great, Until We Examine The Further Potential For What We Really, Really Don’t Want

Initial jobless claims fell to just 234k for the week of February 4, nearly matching the 233k multi-decade low in mid-November. That brought the 4-week moving average down to just 244k, which was a new low going all the way back to the early 1970’s....

The Colonization of Local-Business Main Street by Corporate America

This is what our mode of production optimizes: ugliness, debt-serfdom, and servitude to politically dominant corporations.

The Central Banks Pull Back: Now It’s Up to Fiscal Policy to “Save the World”

Another problem is the rise of social discord, for reasons that extend beyond the reach of tax reductions and increased infrastructure spending. Have you noticed that the breathless anticipation of the next central bank "save" has diminished? Remember...

Which Assets Are Most Likely to Survive the Inevitable “System Re-Set”?

Your skills, knowledge and and social capital will emerge unscathed on the other side of the re-set wormhole. Your financial assets held in centrally controlled institutions will not. Longtime correspondent C.A. recently asked a question every American...
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