Tag Archive: economy

Bloomberg Interview with Jeffrey Snider

2018-11-02

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2018-11-02

Why Eurodollars Might Be Key to the Market Sell-Off (Podcast). There’s a huge market out there that doesn’t get much attention: Eurodollars. These have nothing to do with the euro-dollar exchange rate. Instead, eurodollars are U.S. dollar-denominated deposits at foreign banks and overseas branches of American banks.

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Another ‘Highest In Ten Years’

2018-11-01

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2018-11-01

ECI, Jan 2001 - Oct 2018
Upon the precipice of the Great “Recession”, US workers were cushioned to some extent by what economists call sticky wages. Before the Great Depression, as well as during it, companies would attempt to deal with looming economic contraction by cutting pay rates before workers.

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No Such Thing As An 80 percent Boom

2018-10-26

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2018-10-26

Payrolls LF Participation, Jan 1995 - 2018
Many attribute the saying “a rising tide lifts all boats” to President John Kennedy. He may have been the man who brought it into the mainstream but as his former speechwriter Ted Sorenson long ago admitted it didn’t originate from his or the President’s imagination. Instead, according to Sorenson, it was a phrase borrowed from the New England Chamber of Commerce or some such.

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Monthly Macro Monitor – October 2018

2018-10-24

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2018-10-24

Economic Growth & Investment
Stocks have stumbled into October with the S&P 500 down about 6% as I write this. The source of equity investors’ angst is always hard to pinpoint and this is no exception but this correction doesn’t seem to be due to concerns about economic growth. At least not directly.

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Raining On Chinese Prices

2018-10-20

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2018-10-20

China Price Stability 2007-2018
It was for a time a somewhat curious dilemma. When it rains it pours, they always say, and for China toward the end of 2015 it was a real cloudburst. The Chinese economy was slowing, dangerous deflation developing around an economy captured by an unseen anchor intent on causing havoc and destruction. At the same time, consumer prices were jumping where they could do the most harm.

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Just The One More Boom Month For IP

2018-10-18

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2018-10-18

Industrial Production, SA 1995-2018
The calendar last month hadn’t yet run out on US Industrial Production as it had for US Retail Sales. The hurricane interruption of 2017 for industry unlike consumer spending extended into last September. Therefore, the base comparison for 2018 is against that artificial low. As such, US IP rose by 5.1% year-over-year last month. That’s the largest gain since 2010.

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Now Back To Our Regularly Scheduled Economy

2018-10-17

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2018-10-17

Retail Sales, Gasoline 2011-2018
The clock really was ticking on this so-called economic boom. A product in many economic accounts of Keynesian-type fantasy, the destructive effects of last year’s hurricanes in sharp contrast to this year’s (which haven’t yet registered a direct hit on a major metropolitan area or areas, as was the case with Harvey and Irma) meant both a temporary rebound birthed by rebuilding as well as an expiration date for those efforts.

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Special Edition: Markets Under Pressure (VIDEO)

2018-10-15

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2018-10-15

What does Alhambra Investments think about the 1300 point drop in the Dow Jones Average this week? Alhambra CEO Joe Calhoun has some thoughts.

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A Few Questions From Today’s BOND ROUT!!!!

2018-10-05

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2018-10-05

Benchmark 10-year UST 2017-2018
On April 2, the benchmark 10-year US Treasury yield traded below 2.75%. It had been as high as 2.94% in later February at the tail end of last year’s inflation hysteria. But after the shock of global liquidations in late January and early February, liquidity concerns would override again at least for a short while. After April 2, the BOND ROUT!!!! was re-energized and away went interest rates.

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China’s Industrial Dollar

2018-10-03

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2018-10-03

China Industry Revenue, Aug 2008 - 2018
In December 2006, just weeks before the outbreak of “unforeseen” crisis, then-Federal Reserve Chairman Ben Bernanke discussed the breathtaking advance of China’s economy. He was in Beijing for a monetary conference, and the unofficial theme of his speech, as I read it, was “you can do better.” While economic gains were substantial, he said, they were uneven.

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Make Your Case, Jay

2018-09-28

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2018-09-28

Eurodollar Futures June 2020
June 13 sticks out for both eurodollar futures as well as IOER. On the surface, there should be no bearing on the former from the latter. They are technically unrelated; IOER being a current rate applied as an intended money alternative. Eurodollar futures are, as the term implies, about where all those money rates might fall in the future. Still, the eurodollar curve inverted conspicuously starting June 13. That was the day of the prior “rate...

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Downslope CPI

2018-09-16

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2018-09-16

CPI Expectations vs. Movement 1995-2018
Cushing, OK, delivered what it could for the CPI. The contribution to the inflation rate from oil prices was again substantial in August 2018. The energy component of the index gained 10.3% year-over-year, compared to 11.9% in July. It was the fourth straight month of double digit gains.

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ECB (Data) Independence

2018-09-15

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2018-09-15

ECB Real GDP Projections 2016-2018
Mario Draghi doesn’t have a whole lot going for him, but he is at least consistent – at times (yes, inconsistent consistency). Bloomberg helpfully reported yesterday how the ECB’s staff committee that produces the econometric projections has recommended the central bank’s Governing Council change the official outlook. Since last year, risks have been “balanced” in their collective opinion.

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Europe Starting To Reckon Eurodollar Curve

2018-09-14

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2018-09-14

Europe Industrial Production 2016-2018
We’ve been here before. Economists and central bankers become giddy about the prospects for success, meaning actual recovery. For that to happen, reflation must first attain enough momentum. If it does, as is always forecast, reflation becomes recovery. The world then moves off this darkening path toward the unknown crazy.

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‘Mispriced’ Bonds Are Everywhere

2018-09-02

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2018-09-02

Canada BoC ON Target, August 2018
The US yield curve isn’t the only one on the precipice. There are any number of them that are getting attention for all the wrong reasons. At least those rationalizations provided by mainstream Economists and the central bankers they parrot. As noted yesterday, the UST 2s10s is now the most requested data out of FRED. It’s not just that the UST curve is askew, it’s more important given how many of them are.

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Anticipating How Welcome This Second Deluge Will Be

2018-08-29

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2018-08-29

US Treasuries, Jan 2018 - Aug 2018
Effective federal funds (EFF) was 1.92% again yesterday. That’s now eight in a row just 3 bps underneath the “technically adjusted” IOER. If indeed the FOMC has to make another one to this tortured tool we know already who will be blamed for it.

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Global PMI’s Hang In There And That’s The Bad News

2018-08-25

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2018-08-25

Dollar Cycles General, June 2018
At this particular juncture eight months into 2018, the only thing that will help is abrupt and serious acceleration. On this side of May 29, it is way past time for it to get real. The global economy either synchronizes in a major, unambiguous breakout or markets retrench even more.

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What’s Hot Isn’t Retail Sales Growth

2018-08-18

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2018-08-18

US Retail Sales, June 2011 - 2018
Americans are spending more on filling up. A lot more. According the Census Bureau, retail sales at gasoline stations had increased by nearly 20% year-over-year (unadjusted) in both May and June 2018. In the latest figures for July, released today, gasoline station sales were up by more than 21%.

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Monthly Macro Monitor – August 2018

2018-08-17

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2018-08-17

US Real GDP, Q1 2013 - Q1 2018
The Q2 GDP report (+4.1% from the previous quarter, annualized) was heralded by the administration as a great achievement and certainly putting a 4 handle on quarter to quarter growth has been rare this cycle, if not unheard of (Q4 ’09, Q4 ’11, Q2 & Q3 ’14). But looking at the GDP change year over year shows a little different picture (2.8%).

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What Chinese Trade Shows Us About SHIBOR

2018-08-10

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2018-08-10

China Exports, Jan 2008 - Jul 2018
Why is SHIBOR falling from an economic perspective? Simple again. China’s growth both on its own and as a reflection of actual global growth has stalled. And in a dynamic, non-linear world stalled equals trouble. Going all the way back to early 2017, there’s been no acceleration (and more than a little deceleration). The reflation economy got started in 2016 but it never went anywhere. For most of last year, optimists were sure that it was just the...

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