Category Archive: 5) Global Macro

Weekly Market Pulse: Perception vs Reality

It was the best of times, it was the worst of times… Charles Dickens, A Tale of Two Cities Some see the cup as half empty. Some see the cup as half full. I see the cup as too large.

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Everything Solid Melts into Air

That the neofeudal lords and their lackeys offer the debt-serfs "choices" of forced labor would be comic if the results weren't so tragic. We know we're close to the moment when Everything Solid Melts into Air when extraordinary breakdowns are treated as ordinary and the "news" quickly reverts to gossip.

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Inflating Chinese Trade

There was never really any answer given by the Chinese Communists for why their own export data diverged so much from other import estimates gathered by its largest trading partners. Ostensibly different sides of the same thing, it’s not like anyone asked Xi Jinping to weigh in; they report what numbers they have and consider them authoritative.

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America’s Bottom 50 percent Have Nowhere To Go But Down

One might anticipate that the bottom 50%'s meager share of the nation's exploding wealth would have increased as smartly as the wealth of the billionaires, but alas, no.

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Perfect Time To Review What Is, And What Is Not, Inflation (and why it matters so much)

It is costing more to live and be, so naturally people are looking for who it is they need to blame. Maybe figure out some way to stop it. You know and feel for the basics since everyone’s perceptions begin with costs of just living. This is what makes the subject of inflation so difficult, even more so in the era of QE.

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The Great Eurodollar Famine: The Pendulum of Money Creation Combined With Intermediation

It was one of those signals which mattered more than the seemingly trivial details surrounding the affair. The name MF Global doesn’t mean very much these days, but for a time in late 2011 it came to represent outright fear. Some were even declaring it the next “Lehman.”

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For The Love Of Unemployment Rates

Here we are again. The labor force. The numbers from the BLS are simply staggering. During September 2021, the government believes it shrank for another month, down by 183,000 when compared to August. This means that the Labor Force Participation rate declined slightly to 61.6%, practically the same level in this key metric going back to June.

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Weekly Market Pulse: Inflation Scare?

Bonds sold off again last week with the yield on the 10 year Treasury closing over 1.6% for the first time since early June. The yield is now down just 16 basis points from the high of 1.76% set on March 30. But this rise in rates is at least a little different than the fall that preceded it.

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Why Shortages Are Permanent: Global Supply Shortages Make Fantastic Financial Sense

The era of abundance was only a short-lived artifact of the initial boost phase of globalization and financialization. Global corporations didn't go to all the effort to establish quasi-monopolies and cartels for our convenience--they did it to ensure reliably large profits from control and scarcity.

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Tapering Or Calibrating, The Lady’s Not Inflating

We’ve got one central bank over here in America which appears as if its members can’t wait to “taper”, bringing up both the topic and using that particular word as much as possible. Jay Powell’s Federal Reserve obviously intends to buoy confidence by projecting as much when it does cut back on the pace of its (irrelevant) QE6.

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What’s The Real Downside To Some of These Key Commodities?

Last night, Autodata reported its first estimates for September auto sales in the US. According to its own as well as those compiled by the Bureau of Economic Analysis (the same government outfit which keeps track of GDP), vehicle sales have been sliding overall ever since April.

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Risk Was Never Low, It Was Only Hidden

The vast majority of market participants are about as ready for a semi-random "volatility event" as the dinosaurs were for the meteor strike that doomed them to oblivion.

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Surprise: It Isn’t Consumers Keeping American Factories Busy

US factories are humming along, constrained only by supply issues which might occasionally limit production. That’s the story, anyway. There’s too much business because of them, manufacturers taking in only more orders by the day leaving them struggling to catch up.But what kind of stuff is it that is being ordered from our nation’s factories?

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Weekly Market Pulse: Zooming Out

How often do you check your brokerage account? There is a famous economics paper from 1997, written by some of the giants in behavioral finance (Thaler, Kahnemann, Tversky & Schwartz), that tested what is known as myopic loss aversion.

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More About Less New Orders

The inventory saga, planetary in its reach. As you’ve heard, American demand for goods supercharged by the federal government’s helicopter combined with a much more limited capacity to rebound in the logistics of the goods economy left a nightmare for supply chains. As we’ve been writing lately, a highly unusual maybe unprecedented inventory cycle resulted (creating “inflation”).

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The Market Crash Nobody Thinks Is Possible Is Coming

The banquet of consequences is being served, and risk-off crashes are, like revenge, best served cold. The ideal setup for a crash is a consensus that a crash is impossible--in other words, just like the present: sure, there are carefully measured murmurings about a "correction" but nobody with anything to lose in the way of public credibility is calling for an honest-to-goodness crash, a real crash, not a wimpy, limp-wristed dip that will...

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An Economy Dividing By Inventory And Labor

Is it delta COVID? Or the widely reported labor shortage? Something has created a soft patch in the presumed indestructible US economy still hopped up on Uncle Sam’s deposits made earlier in the year. And yet, there’s a nagging feeling over how this time, like all previous times, just might be too good to be true, too.

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Revisiting The Last Overhang

One reason why I still believe the US most likely would have entered a recession at some point in 2020 even without COVID wasn’t just the yield curve inversion that popped up several months before then. In August of 2019, the small part of the Treasury curve most people pay attention to (2s10s) did send out that dreaded signal, suggesting already to expect contraction in the intermediate term ahead of then. 

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August Avoids Zero In JGB’s

Central banks and their staffs have long been accused of trying to hide inflation. This allegation had been a staple of their critics, those charging reckless monetary policies for creating “too much” money that had allegedly been causing price imbalances all over the financial map.

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Are We Really So “Rich”? A New Way of Defining Wealth

What if our commoditized, financialized definition of wealth reflects a staggering poverty of culture, spirit, wisdom, practicality and common sense? The conventional definition of wealth is solely financial: ownership of money and assets. The assumption is that money can buy anything the owner desires: power, access, land, shelter, energy, transport and if not love, then a facsimile of caring.

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