Tag Archive: currencies

The Historical Monetary Chinese Checklist You Didn’t Know You Needed For Christmas (or the Chinese New Year)

If there is a better, more fitting way to head into the Christmas holiday in the United States than by digging into the finances and monetary flows of the People’s Bank of China, then I just don’t want to know what it is. Contrary to maybe anyone’s rational first impression that this is somehow insane, there’s much we can tell about the state of the world, the whole world and its “dollars”, right from this one key data source.

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Start Long With The (long ago) End of Inflation

With the eurodollar futures curve slightly inverted, the implications of it are somewhat specific to the features of that particular market. And there’s more than enough reason to reasonably suspect this development is more specifically deflationary money than more general economic concerns.

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TIC October: The Deflationary ‘Dollars’ Behind The Flat, Inverting Curves

Seems like ancient history given all that’s happened since, but on October 13 Treasury Secretary Janet Yellen announced a planned deluge of cash management bills in the wake of the debt ceiling resolution (the first one). The next day, China’s currency, CNY, broke free from its previous and suspiciously narrow range.

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One Shock Case For ‘Irrational Exuberance’ Reaching A Quarter-Century

Have oil producers shot themselves in the foot, while at the same time stabbing the global economy in the back? It’d be quite a feat if it turns out to be the case, one of those historical oddities that when anyone might honestly look back on it from the future still hung in disbelief. Let’s start by reviewing just the facts.

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Playing Dominoes

That was fast. Just yesterday I said watch out for when the oil curve flips from backwardation to contango. When it does, that’s not a good sign. Generally speaking, it means something has changed with regard to future expectations, at least one of demand, supply, or also money/liquidity.

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Testing The Supply Chain Inflation Hypothesis The Real Money Way

Basic intuition says this is a no-brainer. Producer prices rise, businesses then pass along these higher input costs to their customers in the form of consumer price “inflation” so as to preserve profits. This is the supply chain hypothesis. Statistically, we’d therefore expect the PPI to lead the CPI.And this was expected for much of Economics’ history, taken for granted as one of those self-evident truths (kind of like the Inflation Fairy). After...

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The FOMC Chases The US Unemployment Rate Regardless of China’s Huge Mess

In certain quarters, “scientific” quarters, the Chinese haven’t just done a fantastic job managing their own outbreak of COVID-19, the Communist government has produced a pandemic response model for the entire world to envy.

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Trying To Project The Goods Trade Cycle

One quick note on yesterday’s retail sales estimates in the US for the month of November 2021. The increase for them was less than had been expected, but these were hardly awful by any rational measure.

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A Global JOLT(s) In July

The Bureau Labor Statistics reported today another huge month for Job Openings (JO). According to their methodology (which I still believe is flawed, but that’s not our focus this time), the level for October 2021 (JOLTS updates are for one month further back than payrolls) was a blistering 11.03 million.

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The Productive Use Of Awful Q3 Productivity Estimates Highlights Even More ‘Growth Scare’ Potential

What was it that old Iowa cornfield movie said? If you build it, he will come. Well, this isn’t quite that, rather something more along the lines of: if you reopen it, some will come back to work. Not nearly as snappy, far less likely to sell anyone movie tickets, yet this other tagline might contribute much to our understanding of “growth scare” and its affect on the US labor market.

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Weekly Market Pulse: Discounting The Future

The economic news recently has been better than expected and in most cases just pretty darn good. That isn’t true on a global basis as Europe continues to experience a pretty sluggish recovery from COVID. And China is busy shooting itself in the foot as Xi pursues the re-Maoing of Chinese society, damn the economic costs.

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This Is A Big One (no, it’s not clickbait)

Stop me if you’ve heard this before: dollar up for reasons no one can explain; yield curve flattening dramatically resisting the BOND ROUT!!! everyone has said is inevitable; a very hawkish Fed increasingly certain about inflation risks; then, the eurodollar curve inverts which blasts Jay Powell’s dreamland in favor of the proper interpretation, deflation, of those first two.

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The ‘Growth Scare’ Keeps Growing Out Of The Macro (Money) Illusion

When Japan’s Ministry of Trade, Economy, and Industry (METI) reported earlier in November that Japanese Industrial Production (IP) had plunged again during the month of September 2021, it was so easy to just dismiss the decline as a product of delta COVID.

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The Wile E. Powell Inflation: Are We Really Just Going To Ignore The Cliff?

Last year did not end on a sound note. The initial rebound after 2020’s recession was supposed to be a straight line, lifting upward for the other side of the infamous “V” shape. Such hopes had been dashed, though, and as the disappointing year wound toward its own end yet another big problem loomed.

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What Does Taper Look Like From The Inside? Not At All What You’d Think

Why always round numbers? Monetary policy targets in the post-Volcker era are changed on even terms. Alan Greenspan had his quarter-point fed funds moves. Ben Bernanke faced with crisis would auction $25 billion via TAF. QE’s are done in even numbers, either total purchases or their monthly pace.

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The Real Tantrum Should Be Over The Disturbing Lack of Celebration (higher yields)

Bring on the tantrum. Forget this prevaricating, we should want and expect interest rates to get on with normalizing. It’s been a long time, verging to the insanity of a decade and a half already that keeps trending more downward through time. What’s the holdup?

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Weekly Market Pulse (VIDEO)

Alhambra CEO talks about last week’s reversal in bonds yields, if there’s a growth scare, what the yield curve is saying, plus reports on wages & salaries, core capital goods, and jobless claims.

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Bill Issuance Has Absolutely Surged, So Why *Haven’t* Yields, Reflation, And Other Good Things?

Treasury Secretary Janet Yellen hasn’t just been busy hawking cash management bills, her department has also been filling back up with the usual stuff, too. Regular T-bills. Going back to October 14, at the same time the CMB’s have been revived, so, too, have the 4-week and 13-week (3-month). Not the 8-week, though.

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Weekly Market Pulse: Growth Scare?

A couple of weeks ago the 10 year Treasury note yield rose 16 basis points in the course of 5 trading days. That move was driven by near term inflation fears as I discussed last week. Long term inflation expectations were and are well behaved.

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GDP Red Flag

There were no surprises in today’s US GDP data. As expected, output sharply decelerated, modestly missing much-reduced expectations. The continuously compounded annual rate of change for Q3 2021 compared to Q2 was the tiniest bit less than 2% (1.99591%) given most recent expectations had been closer to 3%.

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