Category Archive: 5) Global Macro

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The Payroll Report To Focus On Is August’s, Not September’s

2017-10-13

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2017-10-13

US Average Weekly Earnings, Jan 1990 - 2016
The hurricanes didn’t disappoint, causing major damage at least to the BLS. Precisely how much the statistics were affected by the disruptions in Texas and Florida really can’t be calculated, not that everyone won’t try. It makes this month’s payroll report a Rorschach test of sorts. You can pretty much make it out to be whatever you want.

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The Consent of the Conned

2017-10-12

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2017-10-12

US Federal Debt, 1970 - 2017
Every single line item in our entire Bernie Madoff scam of a system is cooked. My theme this week is The Great Unraveling, by which I mean the unraveling of our social-political-economic system of hierarchical, centralized power. Let's start by looking at how the basis of governance has transmogrified from consent of the governed to consent of the conned.

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Non-Transitory Meandering

2017-10-12

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2017-10-12

PCE Deflator Inflation, Jan 2016 - Aug 2017
Monetary officials continue to maintain that inflation will eventually meet their 2% target on a sustained basis. They have no other choice, really, because in a monetary regime of rational expectations for it not to happen would require a radical overhaul of several core theories. Outside of just the two months earlier this year, the PCE Deflator has missed in 62 of the past 64 months. The FOMC is simply running out of time and excuses.

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The circus will celebrate its 250th anniversary in 2018 | The Economist

2017-10-11

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The circus will celebrate its 250th anniversary in 2018. In the second instalment of our new series of films about some of the big themes of the coming year, we look at its cultural impact Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Ever thought of running away to the circus? This woman …

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The Damage Started Months Before Harvey And Irma

2017-10-11

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2017-10-11

US Imports, Jan 1989 - 2017
Ahead of tomorrow’s payroll report the narrative is being set that it will be weak because of Harvey and Irma. Historically, major storms have had a negative effect on the labor market. Just as auto sales were up sharply in September very likely because of the hurricane(s) and could remain that way for several months, payrolls could be weak for the same reasons and the same timeframe.

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Capital punishment is still practised in one European country. Which is it? | The Economist

2017-10-10

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Capital punishment is still practised in one European country, but which is it? We asked people on the streets of Oslo Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Which European country still has the death penalty? In Belarus, at least 4 people were executed in 2016. Executions are typically carried out in …

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Be Careful What You Wish For: Inflation Is Much Higher Than Advertised

2017-10-10

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2017-10-10

US Consumer Price Index
What the Federal Reserve is actually whining about is not low inflation--it's that high inflation isn't pushing wages higher like it's supposed to. It's not exactly a secret that real-world inflation is a lot higher than the official rates--the Consumer Price Index (CPI) and Personal Consumption Expenditures PCE).

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Emerging Markets: Week Ahead Preview

2017-10-09

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2017-10-09

EM FX ended the week under pressure, as US data points to a rate hike in December and perhaps more in 2018. FOMC minutes this Wednesday will be closely studied for clues. US retail sales and CPI data Friday will also be important. We believe the most vulnerable currencies in this environment are ZAR and TRY, but one could also add MXN and perhaps RUB to that mix too.

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Auto Sales Up Last Month, But Why?

2017-10-09

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2017-10-09

US Vehicle Sales, Jan 2014 - Jul 2017
Auto sales rebounded sharply in September, with most major car manufacturers reporting better numbers. Sales at Ford were up 8.9% last month from September 2016; +11.9% at GM; Toyota +14.9%; Nissan +9.5%; Honda +6.8%. The only negatives were reported by FCA (-9.7%) and Mercedes (-1.7%).

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Incomes Are What Matters, So Bad Month, Bad Year, Bad Decade

2017-10-08

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2017-10-08

US Real Personal Income, Dec 2013 - Aug 2017
Sometimes economics can be complicated, such as why the labor market has slowed in such lingering fashion since early 2015. Sometimes economics can be easy, such as why there is so much less to the economy this year than thought. The easy part relates to the hard part. The labor market slowed and so did national income. Though so much of official focus is on debt supplementation, it’s always, always about income.

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What If the Tax Donkeys Rebel?

2017-10-08

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2017-10-08

Family Income, 1989 - 2016
I would hazard a guess that an increasing number of tax donkeys are considering dropping out as a means of increasing their happiness and satisfaction with life. Since federal income taxes are in the spotlight, let's ask a question that rarely (if ever) makes it into the public discussion: what if the tax donkeys who pay most of the tax rebel? There are several likely reasons why this question rarely arises.

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Dollar Surge Continues Ahead Of Jobs Report; Europe Dips As Catalan Fears Return

2017-10-07

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2017-10-07

CBOE VIX Gauge, 1990 - 2019
World stocks eased back from record highs and fell for the first time in eight days, as jitters about Catalonia’s independence push returned while bets on higher U.S. interest rates sent the dollar to its highest since mid August; S&P 500 futures were modestly in the red - as they have been every day this week before levitating to record highs - ahead of hurricane-distorted nonfarm payrolls data (full preview here). U.S. jobs report will also be...

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Bi-Weekly Economic Review: Maximum Optimism?

2017-10-07

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2017-10-07

The economic reports of the last two weeks were generally of a more positive tone. The majority of reports were better than expected although it must be noted that many of those reports were of the sentiment variety, reflecting optimism about the future that may or may not prove warranted. Markets have certainly responded to the dreams of tax reform dancing in investors’ heads with US stock markets providing a steady stream of all time highs, bond...

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Emerging Markets: What has Changed

2017-10-07

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2017-10-07

In the EM equity space as measured by MSCI, China (+4.1%), South Africa (+3.2%), and Hungary (+2.4%) have outperformed this week, while Egypt (-2.8%), Qatar (-2.7%), and Mexico (-1.7%) have underperformed. To put this in better context, MSCI EM rose 1.9% this week while MSCI DM rose 0.6%.

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Catalonia’s independence referendum, cartooned | The Economist

2017-10-06

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Catalonia’s independence referendum has ended with the Catalan president, Carles Puigdemont, stuck in a quagmire. Our cartoonist KAL talks through how he expressed those difficulties for his latest cartoon. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Daily Watch: mind-stretching short films throughout the working week. For more from Economist Films visit: http://films.economist.com/ …

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Surprise! The Rules Will Change (But Not to Your Benefit)

2017-10-06

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2017-10-06

Aggregate balance sheet of Central Banks, 2000 - 2017
These expedient fixes end up crippling the mechanisms that are needed to actually solve the systemic sources of the crisis. We can add a third certainty to the two standard ones (death and taxes): The rules will suddenly change when a financial crisis strikes. Why is this a certainty? The answer is complex, as it draws on human nature, politics and the structure of societies/economies ruled by centralized states (governments). The Core Imperative...

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Run On The Pound? Jeremy Corbyn Says Should Plan For

2017-10-06

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2017-10-06

Fifty Pounds
Run On The Pound ? Jeremy Corbyn Says Should Plan For. Right to plan for ‘run on pound’ if Labour wins says Corbyn and Labour party . British pound already down 20% since Brexit, collapse already in play. Run on the pound likely due to Labour’s ‘command economy’ approach. Collapse in Sterling would undermine UK financial system. Portfolios holding sterling and related assets would be significantly affected. Pension funds and property the most...

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Zerohedge, Charles Hugh Smith, Inflation is most likely 7% and wages are stagnant.

2017-10-05

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♞ Charles Hugh Smith – TBuried In The Fed’s Report It Reveals The Truth About The Economy ♘

2017-10-05

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‘News Brief’ Report date: 10.05.2017 Guest: Charles Hugh Smith Books: Why Our Status Quo Failed and Is Beyond Reform Get a Job, Build a Real Career… Why Things Are Falling Apart and What We Can Do About It A Radically Beneficial World Most of artwork that are included with these videos have been created by …

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US: Reflation Check

2017-10-05

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2017-10-05

US Recovery, 1925 - 1945
There is a difference between reflation and recovery. The terms are similar and relate to the same things, but in many ways the latter requires first the former.  To get to recovery, the economy must reflate if in contraction it was beaten down in money as well as cyclical forces. In the Great Crash of 1929 and after, reflation was required because of the wholesale devastation of the money supply. 

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