Category Archive: 5) Global Macro

Filter archive by: Show All Show only Articles Show only Videos

Deja Vu: Treasury Shorts Meet Treasury Shortages

2021-03-10

by

2021-03-10

UST Yield Curve, 2013
Investors like to short bonds, even Treasuries, as much as they might stocks and their ilk. It should be no surprise that profit-maximizing speculators will seek the best risk-adjusted returns wherever and whenever they might perceive them.

Read More »

Too Busy Frontrunning Inflation, Nobody Sees the Deflationary Tsunami

2021-03-08

by

2021-03-08

Those looking up from their "free fish!" frolicking will see the tsunami too late to save themselves. It's an amazing sight to see the water recede from the bay, and watch the crowd frolic in the shallows, scooping up the flopping fish. In this case, the crowd doing the "so easy to catch, why not grab as much as we can?" scooping is frontrunning inflation, the universally expected result of the Great Reflation Trade.

Read More »

There’s Two Sides To Synchronize

2021-03-03

by

2021-03-03

The offside of “synchronized” is pretty obvious when you consider all possibilities. In economic terms, synchronized growth would mean if the bulk of the economy starts moving forward, we’d expect the rest to follow with only a slight lag. That’s the upside of harmonized systems, the period everyone hopes and cheers for.

Read More »

About That +6.8 percent GDP Forecast: Remember That GDP = Waste

2021-03-02

by

2021-03-02

Any economy stupid enough to rely on the insane distortions of GDP "growth" as its primary measure will richly deserve a Darwin Award when it inevitably collapses in a putrid heap of squandered resources and capital.

Read More »

What “Normal” Are We Returning To? The Depression Nobody Dares Acknowledge

2021-03-01

by

2021-03-01

Perhaps we need an honest national dialog about declining expectations, rising inequality, social depression and the failure of the status quo. Even as the chirpy happy-talk of a return to normal floods the airwaves, what nobody dares acknowledge is that "normal" for a rising number of Americans is the social depression of downward mobility and social defeat.

Read More »

Three Things About Today’s UST Sell-off, Beginning With Fedwire

2021-02-28

by

2021-02-28

UST Yield Curve, 1990
Three relatively quick observations surrounding today’s UST selloff.1. The intensity. Reflation is the underlying short run basis, but there is ample reason to suspect quite a bit more than that alone given the unexpected interruption in Fedwire yesterday.

Read More »

Oil and Debt: Why Our Financial System Is Unsustainable

2021-02-25

by

2021-02-25

Primary energy consumption by source, 1965-2018
How much energy, water and food will the "money" created out of thin air in the future buy? Finance is often cloaked in arcane terminology and math, but the one dynamic that governs the future is actually very simple.

Read More »

Nine Percent of GDP Fiscal, Ha! Try Forty

2021-02-25

by

2021-02-25

Japan CPI, 2006-2021
Fear of the ultra-inflationary aspects of fiscal overdrive. This is the current message, but according to what basis? Bigger is better, therefore if the last one didn’t work then the much larger next one absolutely will. So long as you forget there was a last one and when that prior version had been announced it was also given the same benefit of the doubt.

Read More »

For The Dollar, Not How Much But How Long Therefore How Familiar

2021-02-24

by

2021-02-24

US Dollar / Brazilian Real, 2020-2021
Brazil’s stock market was rocked yesterday by politics. The country’s “populist” President, Jair Bolsonaro, said he was going to name an army general who had served with Bolsomito (a nickname given to him by supporters) during that country’s prior military dictatorship as CEO of state-owned oil giant Petróleo Brasileiro SA. Gen. Joaquim Silva e Luna is being installed, allegedly, to facilitate more direct control of the company by the federal...

Read More »

What Might Be In *Another* Market-based Yield Curve Twist?

2021-02-23

by

2021-02-23

Pro forma CES Private Payrolls, 2020-2021
With the UST yield curve currently undergoing its own market-based twist, it’s worth investigating a couple potential reasons for it. On the one hand, the long end, clear cut reflation: markets are not, as is commonly told right now, pricing 1979 Great Inflation #2, rather how the next few years may not be as bad (deflationary) as once thought a few months ago.

Read More »

Weekly Market Pulse – Real Rates Finally Make A Move

2021-02-22

by

2021-02-22

Last week was only four days due to the President’s day holiday but it was eventful. The big news of the week was the  spike in interest rates, which according to the press reports I read, “came out of nowhere”. In other words, the writers couldn’t find an obvious cause for a 14 basis point rise in the 10 year Treasury note yield so they just chalked it up to mystery.

Read More »

Eurodollar University’s Making Sense; Episode 46; Part 3: Bill’s Reading On Reflation, And Other Charted Potpourri

2021-02-21

by

2021-02-21

46.3 On the Economic Road to NothingGoodVilleRecent, low consumer price inflation readings combined with falling US Treasury Bill yields are cautionary sign posts that say this reflationary path may not be the road to recovery but a deflationary cul-de-sac.

Read More »

What Poisoned America?

2021-02-20

by

2021-02-20

America's financial system is nothing more than a toxic waste dump of speculation, fraud, collusion, corruption and rampant profiteering. What Poisoned America?

Read More »

Two Seemingly Opposite Ends Of The Inflation Debate Come Together

2021-02-19

by

2021-02-19

US Import Price Index All Commedities, 2019-2021
It’s worth taking a look at a couple of extremes, and the putting each into wider context of inflation/deflation. As you no doubt surmise, only one is receiving much mainstream attention. The other continues to be overshadowed by…anything else.

Read More »

Uncle Sam Was Back Having Consumers’ Backs

2021-02-18

by

2021-02-18

US Retail Sales, NSA 1993-2021
American consumers were back in action in January 2021. The “unemployment cliff” along with the slowdown and contraction in the labor market during the last quarter of 2020 had left retail sales falling backward with employment. Seasonally-adjusted, total retail spending had declined for three straight months to end last year.

Read More »

Gains Are Unreal, Losses Are Real

2021-02-12

by

2021-02-12

Why would anyone sell when further gains are guaranteed? Because the gains are unreal but the losses are real. When markets are soaring and your portfolio is rocketing higher, the gains seem unreal.

Read More »

What Collapsed the Middle Class?

2021-02-11

by

2021-02-11

The middle class has already collapsed, but thanks to debt and bubbles, this reality has been temporarily cloaked. What collapsed the middle class? In many ways the answer echoes an Agatha Christie mystery: rather than there being one guilty party, a number of suspects participated in the collapse of the middle class.

Read More »

The Endangered Inflationary Species: Gazelles

2021-02-11

by

2021-02-11

BLS National Business Employment Dynamics, 1993-2020
Nevada is, by all accounts and accountants, in rough shape. Very rough shape. An economy overly dependent upon a single industry, tourism, in this case, is a disaster waiting to happen should anything happen to that industry. Pandemic restrictions, for instance.

Read More »

Permanent Jobs And Permanent Job Losses

2021-02-09

by

2021-02-09

Consumer Credit, Levels NSA 1990-2020
Even the feds haven’t been able to keep up. Without the government having taken over student loans in the wake of 2008-09’s Great “Recession”, there’d have been almost no additional consumer credit extended during the decade since.

Read More »

The Insatiable Appetite to Tax Social Security Benefits

2021-02-09

by

2021-02-09

First, it was 10%, then 20%, and today more than 50% of U.S. retirees pay taxes on their Social Security benefits, and the number is expected to go even higher. The cause seems to be that one government hand doesn’t know, or care, what the other government hand is doing.

Read More »