Category Archive: 5.) The United States

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A Couple of Thoughts on 2019

2019-01-02

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2019-01-02

Americans paychecks are bigger than 40 Years ago, but their purchasing power has hardly budget 1964-2018
The story of the 21st century is debt is soaring while earned income is stagnating for the bottom 95%. Best wishes to all my readers and correspondents for a safe, healthy and productive 2019. Thank you, longstanding supporters, for renewing your financial support at the new year without any pathetic begging on my part. (The pathetic begging will commence shortly.)

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Chart of the Week: The Dreaded Full Frown

2019-01-01

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2019-01-01

Eurodollar Futures Curve 2019-2024
I’m going to break my personal convention and use the bulk of the colors in the eurodollar futures spectrum, not just the single EDM’s (June) contained within each. The current front month is January 2019, and its quoted price as I write this is 97.2475. The EDH (March) 2019 contract trades at 97.29 currently and it will drop off the board on March 18.

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The Crisis of Capital

2018-12-31

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2018-12-31

US Average Hourly Wages, Seasonally Adjusted, 1964 - 2018
The undeniable reality of the 21st century economy is that capital has gained while labor has stagnated. While various critics quibbled about his methodology, Thomas Piketty's core finding--that capital expanded faster than GDP and wages/salaries (i.e. earned income from labor)--is visible in these charts.

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Wasting the Middle: Obsessing Over Exits

2018-12-28

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2018-12-28

NYMEX WTI Futures 2016-2018
What was the difference between Bear Stearns and Lehman Brothers? Well, for one thing Lehman’s failure wasn’t a singular event. In the heady days of September 2008, authorities working for any number of initialism agencies were busy trying to put out fires seemingly everywhere. Lehman had to compete with an AIG as well as a Wachovia, already preceded by a Fannie and a Freddie.

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The net result is capital is impaired in eras of uncertainty.

2018-12-27

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2018-12-27

Political Polarization Has Exploded Since 2000
The net result is capital is impaired in eras of uncertainty. As we look ahead to 2019, what can we be certain of? Maybe your list is long, but mine has only one item: certainty is fraying. Confidence in financial policies intended to eliminate recessions is fraying, confidence in political processes that are supposed to actually solve problems rather than make them worse is fraying, confidence in the objectivity of the corporate media is fraying,...

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Just In Time For The Circus

2018-12-26

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2018-12-26

Eurozone Markit Composite PMI and GDP, Jul 2012 - Nov 2018
Just in time to follow closely upon yesterday’s European circus, IHS Markit piles on with more of the same forward-looking indications looking forward the wrong way. Mario Draghi says the ECB is ending QE, good for him. The central bank will do this despite balanced risks rebalancing in a different place. The more bad news and numbers stack up the more “they” say it’s nothing just transitory roughness.

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Powell: Still Strong; Markets: AYFKM

2018-12-21

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2018-12-21

Global Systematically Important Banks 2017-2018
The official statement that accompanies each every FOMC policy action is by nature bland and sterile. Still, despite the sparseness of printed words those that are included can say a lot. Here’s its essence for what just wrapped up in December 2018: The Committee judges that some further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions,...

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Why Everything That Needs to Be Fixed Remains Permanently Broken

2018-12-20

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2018-12-20

Just in case you missed what's going on in France: the status quo in Europe is doomed. The status quo has a simple fix for every crisis and systemic problem: 1. create currency out of thin air. 2. give it to super-wealthy banks, financiers and corporations to boost their wealth and income.

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Industrial Fading

2018-12-19

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2018-12-19

Federal Reserve Empire State Manu. Index 2001-2018
It is time to start paying attention to PMI’s again, some of them. There are those like the ISM’s Manufacturing Index which remains off in a world of its own. The version of the goods economy suggested by this one index is very different than almost every other. It skyrocketed in late summer last year way out of line (highest in more than a decade) with any other economic account.

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The Relevant Word Is ‘Decline’

2018-12-18

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2018-12-18

China Industrial Production, Nov 1998 - 2018
The English language headline for China’s National Bureau of Statistics’ press release on November 2018’s Big 3 was, National Economy Maintained Stable and Sound Momentum of Development in November. For those who, as noted yesterday, are wishing China’s economy bad news so as to lead to the supposed good news of a coordinated “stimulus” response this was itself a bad news/good news situation.

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“Yellow Vests” and the Downward Mobility of the Middle Class

2018-12-17

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2018-12-17

Capital garners the gains, and labor's share continues eroding. That's the story of the 21st century. The middle class, virtually by definition, is not prepared for downward mobility. A systemic, semi-permanent decline in the standard of living isn't part of the implicit social contract that's been internalized by the middle class virtually everywhere:living standards are only supposed to rise.

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Sometimes Bad News Is Just Right

2018-12-16

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2018-12-16

China Imports 2008-2018
There is some hope among those viewing bad news as good news. In China, where alarms are currently sounding the loudest, next week begins the plenary session for the State Council and its working groups. For several days, Communist authorities will weigh all the relevant factors, as they see them, and will then come up with the broad strokes for economic policy in the coming year (2019).

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US Banks Haven’t Behaved Like This Since 2009

2018-12-14

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2018-12-14

Total Credit Market Assets 1953 Q1 - 2018 Q1
If there is one thing Ben Bernanke got right, it was this. In 2009 during the worst of the worst monetary crisis in four generations, the Federal Reserve’s Chairman was asked in front of Congress if we all should be worried about zombies. Senator Bob Corker wasn’t talking about the literal undead, rather a scenario much like Japan where the financial system entered a period of sustained agony – leading to the same in the real economy, one lost...

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Are We in a Recession Already?

2018-12-12

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2018-12-12

Compensation Employees, 2000 - 2018
The value of declaring the entire nation in or out of recession is limited. Recessions are typically only visible to statisticians long after the fact, but they are often visible in real time on the ground: business volume drops, people stop buying houses and vehicles, restaurants that were jammed are suddenly sepulchral and so on. There are well-known canaries in the coal mine in terms of indicators.

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Monthly Macro Monitor – December 2018 (VIDEO)

2018-12-10

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2018-12-10

Monthly Macro Monitor December 2018
Economic thoughts and analysis from Alhambra Investments CEO Joe Calhoun.

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Converging Views Only Starts With Fed ‘Pause’

2018-12-08

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2018-12-08

US Trade, SA 2014-2018
There’s no sign of inflation, markets are unsettled, and now new economic data keeps confirming that dark side. Forget each month, every day there is something else suggesting a slowdown. That much had been evident across much of the global economy, but this is now different. The US has apparently been infected, too, not that that is any surprise.

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Unexpected?

2018-12-07

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2018-12-07

Labor Curves
Now that the slowdown is being absorbed and even talked about openly, it will require a period of heavy CYA. This part is, or at least it has been at each of the past downturns, quite easy for its practitioners. It was all so “unexpected”, you see. Nobody could have seen it coming, therefore it just showed up out of nowhere unpredictably spoiling the heretofore unbreakable, incorruptible boom everyone was talking about just last week.

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The View from the Trenches of the Alternative Media

2018-12-05

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2018-12-05

What's scarce in a world awash in free content and nearly infinite entertainment content? After 3,701 posts (from May 2005 to the present), here are my observations of the Alternative Media from the muddy trenches. It's increasingly difficult to make a living creating content outside the corporate matrix.

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Truth Is What We Hide, Self-Serving Cover Stories Are What We Sell

2018-12-03

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2018-12-03

The fact that lies and cover stories are now the official norm only makes us love our servitude with greater devotion. We can summarize the current era in one sentence: truth is what we hide, self-serving cover stories are what we sell. Jean-Claude Juncker's famous quote captures the essence of the era: "When it becomes serious, you have to lie."

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Bearish on Fake Fixes

2018-12-02

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2018-12-02

Household Wealth by percentile
The conventional definition of a Bear is someone who expects stocks to decline. For those of us who are bearish on fake fixes, that definition doesn't apply: we aren't making guesses about future market gyrations (rip-your-face-off rallies, dizziness-inducing drops, boring melt-ups, etc.), we're focused on the impossibility of reforming or fixing a broken economic system.

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