Category Archive: 5.) Alhambra Investments

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External Demand, Global Means Global

2019-04-07

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2019-04-07

Germany Factory Orders, SA 2014-2019
The Reserve Bank of India (RBI) cut its benchmark money rate for the second straight meeting. Reducing its repo rate by 25 bps, down to 6%, the central bank once gripped by political turmoil has certainly shifted gears. Former Governor Urjit Patel was essentially removed (he resigned) in December after feuding with the federal government over his perceived hawkish stance.

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Retail Sales In Bad Company, Decouple from Decoupling

2019-04-04

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2019-04-04

Retail Sales, NSA 2011-2018
In a way, the government shutdown couldn’t have come at a more opportune moment. As workers all throughout the sprawling bureaucracy were furloughed, markets had run into chaos. Even the seemingly invincible stock market was pummeled, a technical bear market emerged on Wall Street as people began to really consider increasingly loud economic risks.

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Phugoid Dollar Funding

2019-04-04

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2019-04-04

Money Markets Equivalents 2014-2019
On August 12, 1985, Japan Airways flight 123 left Tokyo’s Haneda Airport on its way to a scheduled arrival in Osaka. Twelve minutes into the flight, the aircraft, a Boeing 747, suffered catastrophic failure when an aft pressure bulkhead burst.

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Monthly Macro Monitor: Well Worried

2019-03-28

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2019-03-28

Yield Curve and Lending Standards 1990-2018
Don’t waste your time worrying about things that are well worried. Well worried. One of the best turns of phrase I’ve ever heard in this business that has more than its fair share of adages and idioms. It is also one of the first – and best – lessons I learned from my original mentor in this business. The things you see in the headlines, the things everyone is already worried about, aren’t usually worth fretting over.

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February 2019 PBOC/RMB Update

2019-03-24

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2019-03-24

China Internal/External 2017-2019
This will serve mostly as an update to what is going on inside the Chinese monetary system. The PBOC’s balance sheet numbers for February 2019 are exactly what we’ve come to expect, ironically confirmed today on the domestic end by the FOMC’s dreaded dovishness. Therefore, rather than rewrite the same commentary for why this continues to happen I’ll just link to prior discussions.

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Slump, Downturn, Recession; All Add Up To Sideways

2019-03-22

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2019-03-22

Germany ZEW Financial Market Survey 2007-2019
According to Germany’s Zentrum für Europäische Wirtschaftsforschung, or ZEW, the slump in the country’s economy has now reached its fourteenth month. The institute’s sentiment index has improved in the last two, but only slightly. As of the latest calculation released today, it stands at -3.6.

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The Real End of the Bond Market

2019-03-22

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2019-03-22

US Treasury Yield Curve
These things are actually quite related, though I understand how it might not appear to be that way at first. As noted earlier today, the Fed (yet again) proves it has no idea how global money markets work. They can’t even get federal funds right after two technical adjustments to IOER (the joke).

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The World Economy’s Industrial Downswing

2019-03-20

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2019-03-20

Europe Industrial Production, 2013-2019
As economic data for 2019 comes in, the numbers continue to suggest more slowing especially in the goods economy. Perhaps what happened during that October-December window was a soft patch. Even if that was the case, we should still expect second and third order effects to follow along from it.

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Chart(s) of the Week: Reviewing Curve Warnings

2019-03-19

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2019-03-19

Eurodollar Futures Curve 2018
Quick review: stocks hit a bit of a rough patch right during the height of inflation hysteria. At the end of January 2018, just as the US unemployment rate had finally achieved the very center of attention, global markets were rocked by instability. Unexpectedly, of course.

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No Sign of Stimulus, Or Global Growth, China’s Economy Sunk By (euro)Dollar

2019-03-16

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2019-03-16

China Industrial Production 1999-2019
Najib Tun Razak was elected as Malaysia’s Prime Minister in early 2009. Taking office that April amid global turmoil and chaos, Najib’s first official visit was to Beijing in early June. His father, also Malaysia’s Prime Minister, had been the first among Asian nations to open formal diplomatic relations with China thirty-five years before.

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Downturn Rising, No ‘Glitch’ In Retail Sales

2019-03-13

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2019-03-13

U.S. Retail Sales, Jun 2011 - Dec 2018
You just don’t see $4 billion monthly retail sales revisions, in either direction. Advance estimates are changed all the time, each monthly figure will be recalculated twice after its initial release. Typically, though, the subsequent revisions are minor rarely amounting to a billion. Four times that?

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Downturn Rising, German Industry

2019-03-12

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2019-03-12

US Treasury Yield Curve, Aug 2007 - Jan 2019
You know things have really changed when Economists start revising their statements more than the data. What’s going on in the global economy has quickly reached a critical stage. This represents a big shift in expectations, a really big one, especially in the mainstream where the words “strong” and “boom” couldn’t have been used any more than they were.

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Not Buying The New Stimulus

2019-03-08

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2019-03-08

ECB GDP Projections, March 2016 - 2019
What just happened in Europe? The short answer is T-LTRO. The ECB is getting back to being “accommodative” again. This isn’t what was supposed to be happening at this point in time. Quite the contrary, Europe’s central bank had been expecting to end all its programs and begin normalizing interest rates.

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Monthly Macro Chart Review – March

2019-03-08

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2019-03-08

Economic Growth and Investment
We’re changing the format on our Macro updates, breaking the report into two parts. This is part one, a review of the data released the previous month with charts to highlight the ones we deem important. We’ll post another one next week that will be more commentary and the market based indicators we use to monitor recession risk.

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Labor Shortage America has been Canceled

2019-03-07

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2019-03-07

U.S. Retail Sales, Jan 2007 - 2019
The holiday season was shaping up to be a good one, perhaps a very good one. All the signs seemed to be pointing in that direction, especially if you were a worker. All throughout last year, beginning partway through 2017, there wasn’t a day that went by without some mainstream story “reporting” on America’s labor shortage.

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China Has No Choice

2019-03-06

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2019-03-06

Chinese Money & Inflation 1997-2011
China’s central bank was given more independence to conduct monetary policies in late 2003. It had been operating under Order No. 46 of the President of the People’s Republic of China issued in March 1995, which led the 3rd Session of the Eighth National People’s Congress (China’s de facto legislature) to create and adopt the Law of the People’s Republic of China on the People’s Bank of China.

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Meanwhile, Over In Asia

2019-03-02

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2019-03-02

Japan Industrial Production, SA 2008-2019
While Western markets breathed a sigh of relief that US GDP didn’t confirm the global slowdown, not yet, what was taking place over in Asia went in the other direction. There has been a sense, a wish perhaps, that if the global economy truly did hit a rough spot it would be limited to just the last three months of 2018. Hopefully Mario Draghi is on to something.

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No Surprise, Hysteria Wasn’t a Sound Basis For Interpretation

2019-02-28

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2019-02-28

Labor Utilization Total Hours Worked 2008-2018
What gets them into trouble is how they just can’t help themselves. Go back one year, to early 2018. Last February it was all-but-assured (in mainstream coverage) that the US economy was going to take off. The bond market, meaning UST’s, was about to be massacred because the overheating boom would force a double shot down its throat.

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The Fate of Real Estate

2019-02-27

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2019-02-27

NAR Inventory of Homes For Sale, NSA 2014-2019
For years, realtors have been waiting for more housing inventory. It had become an article of faith, what was restraining a full-blown recovery was the lack of units available. The level of resales like construction was up, but still way, way less than it was now fourteen years past the prior peak despite sufficient population growth to have absorbed the previous bubble’s overbuilding.

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Sinking Shippers Signal Global Goods Troubles

2019-02-24

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2019-02-24

US Treasury Yields 2007-2019
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.

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