Tag Archive: Federal Reserve/Monetary Policy

Spending Here, Production There, and What Autos Have To Do With It

2021-03-17

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2021-03-17

US Retail Sales, 2016-2021
While the global inflation picture remains fixed at firmly normal (as in, disinflationary), US retail sales by contrast have been highly abnormal. You’d think given that, the consumer price part of the economic equation would, well, equate eventually price-wise.

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Looking Past Gigantic Base Effects To China’s (Really) Struggling Economy

2021-03-16

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2021-03-16

China Industrial Production, 1999-2021
The Chinese were first to go down because they had been first to shut down, therefore one year further on they’ll be the first to skew all their economic results when being compared to it. These obvious base effects will, without further scrutiny, make analysis slightly more difficult.

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JOLTS Revisions: Much Better Reopening, But Why Didn’t It Last?

2021-03-12

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2021-03-12

JOLTS - Job Openings, SA 2017-2021
According to newly revised BLS benchmarks, the labor market might have been a little bit worse than previously thought during the worst of last year’s contraction. Coming out of it, the initial rebound, at least, seems to have been substantially better – either due to government checks or, more likely, American businesses in the initial reopening phase eager to get back up and running on a paying basis again.

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What Gold Says About UST Auctions

2021-03-11

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2021-03-11

US Treasury & Auction Rates, 2018-2021
The “too many” Treasury argument which ignited early in 2018 never made a whole lot of sense. It first showed up, believe it or not, in 2016. The idea in both cases was fiscal debt; Uncle Sam’s deficit monster displayed a voracious appetite never in danger of slowing down even though – Economists and central bankers claimed – it would’ve been wise to heed looming inflationary pressures to cut back first.

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Deja Vu: Treasury Shorts Meet Treasury Shortages

2021-03-10

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2021-03-10

UST Yield Curve, 2013
Investors like to short bonds, even Treasuries, as much as they might stocks and their ilk. It should be no surprise that profit-maximizing speculators will seek the best risk-adjusted returns wherever and whenever they might perceive them.

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There’s Two Sides To Synchronize

2021-03-03

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2021-03-03

The offside of “synchronized” is pretty obvious when you consider all possibilities. In economic terms, synchronized growth would mean if the bulk of the economy starts moving forward, we’d expect the rest to follow with only a slight lag. That’s the upside of harmonized systems, the period everyone hopes and cheers for.

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Three Things About Today’s UST Sell-off, Beginning With Fedwire

2021-02-28

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2021-02-28

UST Yield Curve, 1990
Three relatively quick observations surrounding today’s UST selloff.1. The intensity. Reflation is the underlying short run basis, but there is ample reason to suspect quite a bit more than that alone given the unexpected interruption in Fedwire yesterday.

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Nine Percent of GDP Fiscal, Ha! Try Forty

2021-02-25

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2021-02-25

Japan CPI, 2006-2021
Fear of the ultra-inflationary aspects of fiscal overdrive. This is the current message, but according to what basis? Bigger is better, therefore if the last one didn’t work then the much larger next one absolutely will. So long as you forget there was a last one and when that prior version had been announced it was also given the same benefit of the doubt.

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For The Dollar, Not How Much But How Long Therefore How Familiar

2021-02-24

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2021-02-24

US Dollar / Brazilian Real, 2020-2021
Brazil’s stock market was rocked yesterday by politics. The country’s “populist” President, Jair Bolsonaro, said he was going to name an army general who had served with Bolsomito (a nickname given to him by supporters) during that country’s prior military dictatorship as CEO of state-owned oil giant Petróleo Brasileiro SA. Gen. Joaquim Silva e Luna is being installed, allegedly, to facilitate more direct control of the company by the federal...

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What Might Be In *Another* Market-based Yield Curve Twist?

2021-02-23

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2021-02-23

Pro forma CES Private Payrolls, 2020-2021
With the UST yield curve currently undergoing its own market-based twist, it’s worth investigating a couple potential reasons for it. On the one hand, the long end, clear cut reflation: markets are not, as is commonly told right now, pricing 1979 Great Inflation #2, rather how the next few years may not be as bad (deflationary) as once thought a few months ago.

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Eurodollar University’s Making Sense; Episode 46; Part 3: Bill’s Reading On Reflation, And Other Charted Potpourri

2021-02-21

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2021-02-21

46.3 On the Economic Road to NothingGoodVilleRecent, low consumer price inflation readings combined with falling US Treasury Bill yields are cautionary sign posts that say this reflationary path may not be the road to recovery but a deflationary cul-de-sac.

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Two Seemingly Opposite Ends Of The Inflation Debate Come Together

2021-02-19

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2021-02-19

US Import Price Index All Commedities, 2019-2021
It’s worth taking a look at a couple of extremes, and the putting each into wider context of inflation/deflation. As you no doubt surmise, only one is receiving much mainstream attention. The other continues to be overshadowed by…anything else.

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The Endangered Inflationary Species: Gazelles

2021-02-11

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2021-02-11

BLS National Business Employment Dynamics, 1993-2020
Nevada is, by all accounts and accountants, in rough shape. Very rough shape. An economy overly dependent upon a single industry, tourism, in this case, is a disaster waiting to happen should anything happen to that industry. Pandemic restrictions, for instance.

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Permanent Jobs And Permanent Job Losses

2021-02-09

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2021-02-09

Consumer Credit, Levels NSA 1990-2020
Even the feds haven’t been able to keep up. Without the government having taken over student loans in the wake of 2008-09’s Great “Recession”, there’d have been almost no additional consumer credit extended during the decade since.

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Even The People ‘Printing’ The ‘Money’ Aren’t Seeing It

2021-02-07

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2021-02-07

Inflation Europe, 2007-2020
Everyone in Europe has long forgotten about what was going on there before COVID. First, an economy that had been stuck two years within a deflationary downturn central bankers like Italy’s new recycled top guy Mario Draghi clumsily mistook for an inflationary takeoff. Both the inflation puzzle and ultimately a pre-pandemic recession have taken a back seat to everything corona.Whereas Draghi spent those years howling for inflationary conditions...

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Consumers, Producers, and the Unsettled End of 2020

2021-01-17

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2021-01-17

U.S. Retail Sales, NSA, Jan 1993 - Jul 2020
The months of November and December aren’t always easily comparable year to year when it comes to American shopping habits. For a retailer, these are the big ones. The Christmas shopping season and the amount of spending which takes place during it makes or breaks the typical year (though last year, there was that whole thing in March and April which has had a say in each’s final annual condition).

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If the Fed’s Not In Consumer Prices, Then How About Producer Prices?

2021-01-16

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2021-01-16

U.S. CPI Services Core Fed, Jan 1985 - -2020
It’s not just that there isn’t much inflation evident in consumer prices. Rather, it’s a pretty big deal given the deluge of so much “money printing” this year, begun three-quarters of a year before, that consumer prices are increasing at some of the slowest rates in the data.

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They’ve Gone Too Far (or have they?)

2021-01-10

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2021-01-10

Between November 1998 and February 1999, Japan’s government bond (JGB) market was utterly decimated. You want to find an historical example of a real bond rout (no caps nor exclamations necessary), take a look at what happened during those three exhilarating (if you were a government official) months.

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There’s Always A First Time

2021-01-09

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2021-01-09

Is it a race against time? Or is it trying to set aside today so as to focus entirely on a specific kind of tomorrow? It’s easy to do the latter especially when today is what it is; you can’t change what’s already gone on.

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Seizing The Dirt Shirt Title

2021-01-06

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2021-01-06

China PMI, 2010-2020
In mid-December 2019, before the world had heard of COVID, China’s Central Economic Work Conference had released a rather startling statement for the world to consume. In the West, everything was said to be on the up. Central banks had responded, forcefully, many claimed, more than enough to deal with that year’s “unexpected” globally synchronized downturn.

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