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Tag Archive: economy

Simple (economic) Math

2017-06-02

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2017-06-02

Average Weekly Earnings Production And Nonsupervisory, January 2007 - May 2017
The essence of capitalism is not strictly capital. In the modern sense, the word capital has taken on other meanings, often where money is given as a substitute for it. When speaking about things like “hot money”, for instance, you wouldn’t normally correct someone referencing it in terms of “capital flows.” Someone that “commits capital” to a project is missing some words, for in the proper sense they are “committing funds to...

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Remembering A Still Falling Hero: Small Business

2017-05-30

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2017-05-30

On this holiday weekend known here in the U.S. as Memorial Day, I would like to make a slight turn in the narrative that many give little to no attention too, yet, is one of the most important underlying principles or fundamentals which helped shape, lift, mold, sustain, and create one of the world’s greatest economic powerhouses bar none.

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Not Do We Need One, But Do We Need A Different One

2017-05-30

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2017-05-30

Chinese Money, Oil Prices And Asian "Dollars" , January 2006 - July 2009
On March 24, 2009, then US President Barack Obama gave a prime time televised press conference whose subject was quite obviously the economy and markets. The US and global economy was at that moment trying to work through the worst conditions since the 1930’s and nobody really had any idea what that would mean.

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Suddenly Impatient Sentiment

2017-05-28

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2017-05-28

Fed Fifth District Survey Of Manufacturing, January 2014 - May 2017
Two more manufacturing surveys suggest sharp deceleration in momentum, or, more specifically, the momentum of sentiment (if there is such a thing). The Federal Reserve’s 5th District Survey of Manufacturing (Richmond branch) dropped to barely positive, calculated to be just 1.0 in May following 20.0 in April and 22.0 in March.

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Less Than Nothing

2017-05-25

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2017-05-25

Eurodollar Futures Dimensions, 2005 - 2007
As I so often write, we still talk about 2008 because we aren’t yet done with 2008. It doesn’t seem possible to be stuck in a time warp of such immense proportions, but such are the mistakes of the last decade carrying with them just these kinds of enormous costs.

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Commodity and Oil Prices: Staying Suck

2017-05-24

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2017-05-24

U.S. Industrial Production, 2006-2017
The rebound in commodity prices is not difficult to understand, perhaps even sympathize with. With everything so depressed early last year, if it turned out to be no big deal in the end then there was a killing to be made. That’s what markets are supposed to do, entice those with liquidity to buy when there is blood in the streets. And if those speculators turn out to be wrong, then we are all much the wiser for their pain.

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Bi-Weekly Economic Review

2017-05-23

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2017-05-23

The economic data releases since the last update were generally upbeat but markets are forward looking and the future apparently isn’t to their liking. Of course, it is hard to tell sometimes whether bonds, the dollar and stocks are responding to the real economy or the one people hope Donald Trump can deliver when he isn’t busy contradicting his communications staff.

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Trying To Reconcile Accounts; China

2017-05-21

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2017-05-21

China Fixed Asset Investment, April 2013 - April 2017
Chinese economic data for April 2017 has been uniformly disappointing. External trade numbers resembled too much commodity prices, leaving an emphasis on them rather than actual economic forces. The latest figures for the Big 3, Industrial Production, Retail Sales, and Fixed Asset Investment, unfortunately also remained true to the pattern.

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Reasonable Retail (Therefore Consumer) Expectations

2017-05-20

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2017-05-20

Transitory Retail Sales, January 2013 - May 2017
Retail sales estimates are not adjusted for inflation, but even so whenever they get down toward the 3% growth level you can be sure there is serious economic trouble. The 6-month average for overall retail sales dropped below 3% in March 2001, the month that marked the start of the official dot-com recession (though that is not the official name for the cyclical peak, it probably should be).

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Hopefully Not Another Three Years

2017-05-19

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2017-05-19

The Still-Shrinking 'Recovery'
The stock market has its earnings season, the regular quarterly reports of all the companies that have publicly traded stocks. In economic accounts, there is something similar though it only happens once a year. It is benchmark revision season, and it has been brought to a few important accounts already. Given that this is a backward looking exercise, that this season is likely to produce more downward revisions shouldn’t be surprising.

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China Inflation Now, Too

2017-05-18

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2017-05-18

China Producer Price Index, April 2007 - May 2017
We can add China to the list of locations where the near euphoria about inflation rates is rapidly falling apart. This is an important blow, as the Chinese economy has been counted on to lead the world out of this slump if through nothing other than its own sheer recklessness. “Stimulus” was all the rage one year ago, and for a time it seemed to be producing all the right effects. This was “reflation”, after all.

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Lackluster Trade, China April Edition

2017-05-17

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2017-05-17

China’s trade statistics for April 2017 uniformly disappointed. They only did so, however, because expectations are being calibrated as if the current economy is actually different. It is instead merely swinging between bouts of contraction and low-grade growth, but so low-grade it really doesn’t qualify as growth.

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Inflation Is Oil, But Inflation Is Much More Than Consumer Prices

2017-05-16

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2017-05-16

CPI Changes On Energy, January 2016 - May 2017
The average annual change in the WTI benchmark price was in April about 25%. That was still a sizable increase year-over-year, and just marginally less than March’s average of 33%. For calculated inflation rates, it represents the last of the base effects that have to this point made it appear as if economic improvement was possibly serious.

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Lackluster Trade

2017-05-14

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2017-05-14

US Imports, June 1989 - May 2017
US imports rose 9% year-over-year (NSA) in March 2017, after being flat in February and up 12% in January. For the quarter overall, imports rose 7.3%, a rate that is slightly more than the 2013-14 comparison. The difference, however, is simply the price of oil.

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How The US Government Let A Giant Bank Pin A Scandal On A Former Employee

2017-05-12

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2017-05-12

UBS Zurich
The following is an excerpt from David Enrich's nonfiction financial and legal thriller The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History. (Read part of the prologue here; another excerpt can be found here) This excerpt takes place shortly after the accused mastermind of the Libor scandal, Tom Hayes, is fired from his job at Citigroup, kicking government...

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SocGen: Beware The Ghost Of 1993

2017-05-12

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2017-05-12

The Vix is at its lowest level since 1993, Commodities and rates are dragging the AUD down
With Monday's financial media blasting reports about the VIX collapse to levels not seen in 24 years, going all the way back to 1993, it is worth remembering that the near record low volatility collapse of 1993 did not end well either for stocks, or for bonds, with the great 1994 bond tantrum. Reminding us of that, and of broader implications for the cross-asset space, is SocGen's Kit Juckes with his overnight note, "The ghost of 1993"

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The Wrong People Have An Innate Tendency To Stand Out

2017-05-12

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2017-05-12

Japan Government Bond Yields, January 1985 - May 2017
I don’t think Milton Friedman would have made much of chess player. For all I know he might have been a grand master or something close to that rank, but as much as his work is admirable it invites too the whole range of opposite emotion. He was the champion libertarian of the free market who rescued economics from the ravages of New Deal socialism, but in doing so he simply created the avenue for where Economics of that kind could be transposed...

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A Problem Emerges: Central Banks Injected A Record $1 Trillion In 2017… It’s Not Enough

2017-05-11

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2017-05-11

Aggregate Balance Sheet Of Large Central Banks, 2000 - 2017
Two weeks ago Bank of America caused a stir when it calculated that central banks (mostly the ECB & BoJ) have bought $1 trillion of financial assets just in the first four months of 2017, which amounts to $3.6 trillion annualized, "the largest CB buying on record."

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Noose Or Ratchet

2017-05-11

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2017-05-11

Quarterly Report On Bank Derivative Activities, April 1995 - April 2016
losing the book on Q4 2016 balance sheet capacity is to review essentially forex volumes. The eurodollar system over the last ten years has turned far more in this direction in addition to it becoming more Asian/Japanese. In fact, the two really go hand in hand given the native situation of Japanese banks.

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Auto Pressure Ramps Up

2017-05-10

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2017-05-10

Motor Vehicle Sales And Production, January 2011 - May 2017
The Los Angeles Times today asked the question only the mainstream would ask. “Wages are growing and surveys show consumer confidence is high. So why are motor vehicle sales taking a hit?” Indeed, the results reported earlier by the auto sector were the kind of sobering figures that might make any optimist wonder.

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