Tag Archive: economy
Curve Inversion 101: US CPI Politics Up Front, China PPI Down(ing) The Back
While the world fixated on the US CPI, it was other “inflation” data from across the Pacific that is telling the real economic story. Having conflated the former with a red-hot economy, the fact American consumer prices aren’t tied to the actual economic situation has been lost in the shuffle of the FOMC’s hawkishness, with markets obliged to price wrong-way Jay.
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It’s Not Nothing, It’s Everything (including crypto)
Markets got aggressive long before the FOMC did. Everything, and I mean everything, has been trending the other way. Jay Powell says inflation risks are most pressing when markets have consistently priced the opposite for a whole lot longer.
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Prices As Curative Punishment
It wasn’t exactly a secret, though the raw data doesn’t ever tell you why something might’ve changed in it. According to the Bureau of Economic Analysis, confirmed by industry sources, US new car sales absolutely tanked in May 2022.
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Update The Conflict of Interest Rate(s)
What changed? For over a month, the Treasury market had the Fed and its rate hiking figured out. Rising recession risks had been confirmed by almost every piece of incoming data, including, importantly, labor data.
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Simple Economics and Money Math
The BLS’s most recent labor market data is, well, troubling. Even the preferred if artificially-smooth Establishment Survey indicates that something has changed since around March. A slowdown at least, leaving more questions than answers (from President Phillips).
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“Inflation” Not Inflation, Through The Eyes of Inventory
It isn’t just semantics, nor some trivial, egotistical use of quotation marks. There is an actual and vast difference between inflation and “inflation.” And in the final results, that difference isn’t strictly or even mainly about consumer prices.Who cares, most people wonder. After all, what does it really matter why prices are going up so far?
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A Volcker Pan Recession
The Volcker Myth is simple because there isn’t math for it just voodoo economics (to borrow George HW Bush’s phrase). In theory, the FOMC finally realized after more than a decade of currency devastation and its economic, financial, and social consequences, hey, inflation and money.
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May Payrolls (and more) Confirm Slowdown (and more)
May 2022’s payroll estimates weren’t quite the level of downshift President Phillips had warned about, though that’s increasingly likely just a matter of time. In fact, despite the headline Establishment Survey monthly change being slightly better than expected, it and even more so the other employment data all still show an unmistakable slowdown in the labor market.
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No Pandemic. Not Rate Hikes. Doesn’t Matter Interest Rates. Just Globally Synchronized.
The fact that German retail sales crashed so much in April 2022 is significant for a couple reasons. First, it more than suggests something is wrong with Germany, and not just some run-of-the-mill hiccup. Second, because it was this April rather than last April or last summer, you can’t blame COVID this time.
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Follow China’s True Line
It’s a broken a record, the macro stylus stuck unable to move on, just skipping and repeating the same spot on the vinyl. Since Xi Jinping’s lockdowns broke it, as it’s said, when Xi is satisfied there’s zero COVID he’ll release the restrictions and that will fix everything. The economy will go right back to good, like flipping a switch.
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ADP Front-Runs BLS and President Phillips
It’s gotten to the point that pretty much everyone is now aware of the risks. Public surveys, market behavior, on and on, hardly anyone outside politics thinks the economy is in a good place. Gasoline, sentiment, whatever, Euro$ #5 in total is much more than what’s shaping up inside the American boundary. Globally synchronized of which the US is proving to be a close part.
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Can’t Blame COVID For This One
Late in March 2021, then-German Chancellor Angela Merkel announced a reverse. Several weeks before that time, Merkel’s federal government had reached an agreement with the various states to begin opening the country back up, easing more modest restrictions to move daily life closer to normal.
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President Phillips Emerges To Reassure On Growing Slowdown
Just the other day, President Biden took to the pages of the Wall Street Journal to reassure Americans the government is doing something about the greatest economic challenge they face. Biden says this is inflation when that’s neither the actual affliction nor our greatest threat.
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Peak Policy Error
Another economic discussion lost to the eventual coronavirus pandemic mania was the 2019 globally synchronized downturn. Not just downturn, outright recession in key parts from around the world, maybe including the US.
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Weekly Market Pulse: Is The Bear Market Over?
Stocks had a rip snorter of a rally last week and a lot of people are pondering the question in the title over this long weekend. The S&P 500 was down 20.9% from intraday high (4818.62, January 4th) to intraday low (3810.32, May 20th). From that intraday low the market has risen 9.1% in just six trading days.
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Inventory Flood Continues Just As Consumers Tap Out
If it continues to play out the same way, it would be all the worst scenarios lumped together all at the same time. A real unfortunate convergence, yet one that has been entirely predictable. Consumers reaching their absolute spending limits.
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‘Unconscionably Excessive’ Denial
What would “unconscionably excessive” even look, legally speaking? More to the issue, who gets to decide what constitutes “excessive?”
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Is It Being Demanded?
Shipping container rates have been dropping since early March – right around the time when we had just experienced our “collateral days” and then stood by to witness chaotic financial fireworks, inversions, the whole thing.
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Hong Kong Stocks Pivot Euro$ #5
The stock market hasn’t been moneyed; well, US equities, anyway. What do I mean by “moneyed?” Common perceptions (myth) link the Federal Reserve’s so-called money printing (bank reserves) with share prices.
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RRP (use) Hits $2T, SOFR Like T-bills Below RRP (rate), What Is (really) Going On?
You might not know it, but front-end T-bill yields are not the only market spaces which are making a mockery of the Federal Reserve’s “floor.” There are others, including the same money number the same Fed demanded the world (or whatever banks in its jurisdiction it could threaten) ditch LIBOR over.
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