Tag Archive: Great Graphic

Great Graphic: Gold and the Dollar

2016-05-27

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2016-05-27

Many investors still think about gold as if it were money.  Economists identify three functions of money: store of value, means of exchange, and a unit of account.   It can be a store of value, but the price fluctuates compared with other form...

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Great Graphic: Dollar Pushes Back Below JPY110

2016-05-23

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2016-05-23

The yen is the strongest of the major currencies.  It has gained about 0.65% against the dollar.  It has been grinding lower throughout the Asian and European session and has remained in narrow ranges near its highs in the US morning. Japan still seems isolated in terms of it desire to intervene.  Ahead of the … Continue reading...

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Great Graphic: Non-Consensus Thinking on Trade

2016-05-05

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2016-05-05

Low-skilled workers abroad do compete with low-skilled workers at domestic affiliates. However, employment of high-skilled workers abroad compliments (as in leads to more) high skilled domestic employment.

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Great Graphic: Odds of President Trump Rise (Predictit)

2016-05-04

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2016-05-04

TRUMP . USPREZ16 This Great Graphic is a 90-day history of the “betting” at PredictIt that Trump becomes the new US President.  With Cruz suspending his campaign, the odds of Trump have risen just above 40%. The US national interests and challenges to those interests do not change much from year-to-year, and this may help …

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Great Graphic:US Rents and Core Inflation

2016-05-02

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2016-05-02

Shelter inflation in the U.S. is at 3.2% per year, but only 1% in Europe. It is 33% of the US CPI basket, but only 6.4% of the euro zone. This leads to massive distortions in CPI inflation, and to wrong bets of investors and FX traders.

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Great Graphic: Measuring Cost of Extend and Pretend

2016-04-26

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2016-04-26

There is a debate.  On one hand is Summers, who argues that modern economies have entered an era of secular stagnation.  Full utilization of the factors of production and particularly capital and labor is not possible without stimulating aggregate demand in a way that facilitates bubbles.  The broad strokes of the argument can be found …

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Great Graphic: Beware of Sophistry about the Yen and Nikkei

2016-04-12

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2016-04-12

There is a common ploy used by many analysts and reporters that often simply does not stand up to close scrutiny, and would in fact be mocked in the university.   The ploy is to take two time series and put them on the same chart but use different scales. Such a ploy often is used … Continue reading »

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Great Graphic: Nonperforming Loans, Another Divergence

2016-04-11

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2016-04-11

   Early in the financial crisis, the US forced all large banks to take an infusion of capital.  This helped put a floor under the US financial system.  Regulators and stakeholders encouraged US banks to address the significant nonperforming loan problem. The eurozone banking woes persist.  Before the weekend, the shares of the one the …

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Great Graphic: WSJ survey of Fed Expectations

2016-04-07

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2016-04-07

This Great Graphic shows the results of the last three Wall Street Journal survey of business and academic economists on the outlook for Fed policy. The key take away is that despite all the talk and ink spilled on the shifting Fed stance and the split within the FOMC, economists views did not change much … Continue...

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Great Graphic: Head and Shoulders in Dollar-Yen

2016-04-06

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2016-04-06

The old head and shoulders pattern in the dollar against the yen is back in vogue.  We first pointed it out in the first week of January here. Recall the details.  The neckline is drawn around JPY116.30 and measuring objective is near JPY107.00....

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Great Graphic: Bottom Building on CRB Commodity Index?

2016-03-28

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2016-03-28

Marc Chandler shows that after the commodity currency Canadian Dollar, also the CRB Commodity index could have found a bottom. See here his Great Graphic on the CAD bottom buildung. See also the CAD resilience despite falling oil prices.

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Great Graphic: Has the Canadian Dollar Bottomed Out?

2016-03-24

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2016-03-24

We have been looking for a bottom in the US dollar against the Canadian dollar.  It is been difficult, but now it appears that the technicals are turning.  This Great Graphic, from Bloomberg, shows that the US dollar is moving above a trend line...

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Great Graphic: Brexit Fears Boost Sterling Put Buying

2016-03-23

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2016-03-23

The UK referendum is three months away.   Three-month options are a common benchmark for various market segments; from speculators, to fund managers to corporations.  Events over the past week have raised the risks that the UK votes to leave the EU. The market has responded forcefully today, and even if you only follow the spot …

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Great Graphic: 10-Year Break-Evens and Oil

2016-03-22

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2016-03-22

Until last September, the Federal Reserve seems to play down the market-based measures of inflation expectations, preferring the surveys that showed views were anchored.    At the September 2015 FOMC meeting where the Fed had been expected to tighten until the August turmoil, officials cited among other considerations, the decline in market-based measures of inflation expectations. …

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Great Graphic: Dollar Index Retracement, Too Soon To Say Top is In

2016-03-17

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2016-03-17

The cry that the dollar has peaked is gaining ground.  We are not convinced.  The macro-fundamental case remains intact.  Divergence between the US and other high income countries continues, even if at a more gradual pace than the Federal Reserve expected a few months ago. This Great Graphic of the Dollar Index, created on Bloomberg, …

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Great Graphic: Vulnerability of the Canadian Dollar

2016-03-09

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2016-03-09

The Canadian dollar appears vulnerable.  It remains firm while the US two-year premium over Canada has risen sharply.   Like others, we do not expect the Bank of Canada to cut rates today and are looking past it. This Great Graphic was composed on Bloomberg.  It shows the 2-year spread (white line) and the US dollar …

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Great Graphic: US 2-year Premium over Germany and Japan at New Cyclical Highs

2016-03-07

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2016-03-07

We argue that the dollar is in its third significant rally since the end of Bretton Woods in 1971.  The Reagan dollar rally was driven by the policy mix of tight monetary policy and loose fiscal policy.  The G7 effort to stop the dollar's appreciation at the Plaza Hotel in September 1985 marked the end … Continue...

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Weekly Speculative Positions: Speculators Add to Short Euro and Sterling

2016-03-06

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2016-03-06

Speculators in the currency futures made mostly small adjustments to their gross foreign currency exposure.  There were only three position adjustments of more than 5k contacts.   Since the markets turned on 11 February, the Canadian dollar has been the strongest of the major currencies, appreciating a little more than 4.5% against the US dollar.    Gross …

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Great Graphic: Inflation Expectations via 10-Year Breakevens

2016-03-03

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2016-03-03

Over the next fortnight the major central banks, including the ECB, BOJ, Fed and BOE will hold policy-making meetings.  Of the four, expectations are the highest for the ECB to ease policy. Given the poor economic data, including deflationary pressures, and the tightening of financial conditions, the BOJ could also adjust policy.  However, after the …

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Great Graphic: Surplus Capacity is not the Same as Insufficient Aggregate Demand

2016-03-02

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2016-03-02

Many economists argue that the key challenge is that of insufficient aggregate demand.  That is why world growth is slow.  Hobbled with debt, households have pulled back.  Business investment is weak.  Government dissavings has been offset by household and business savings.  The solution offered by some economists is a large public investment program. The G20 …

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