Tag Archive: Markets

Weekly Market Pulse – Real Rates Finally Make A Move

2021-02-22

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2021-02-22

Last week was only four days due to the President’s day holiday but it was eventful. The big news of the week was the  spike in interest rates, which according to the press reports I read, “came out of nowhere”. In other words, the writers couldn’t find an obvious cause for a 14 basis point rise in the 10 year Treasury note yield so they just chalked it up to mystery.

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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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Uncle Sam Was Back Having Consumers’ Backs

2021-02-18

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2021-02-18

US Retail Sales, NSA 1993-2021
American consumers were back in action in January 2021. The “unemployment cliff” along with the slowdown and contraction in the labor market during the last quarter of 2020 had left retail sales falling backward with employment. Seasonally-adjusted, total retail spending had declined for three straight months to end last year.

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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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Politics Get Weird, Markets Don’t Care

2021-01-19

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2021-01-19

US Personal Income data by YCharts
A mob, led by a shirtless man wearing a Viking helmet, stormed the Capitol building a couple of weeks ago and five people died before order was restored. A man from upstate New York sat in a Senator’s office and smoked a joint. Another roamed the halls of Congress with a Confederate flag.

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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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Consumers, Too; (Un)Confident To Re-engage

2020-12-19

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2020-12-19

Friedman's Plucking Model of Trend-Cycle Analysis
There is a lot of evidence which shows some basis for expectations-based monetary policy. Much of what becomes a recession or worse is due to the psychological impacts upon businesses (who invest and hire) as well as workers being consumers (who earn and then spend).

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What Did Hamper Growth ‘In A Few Months’

2020-12-18

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2020-12-18

US Industrial Production, SA 2011-2020
Over here, on the other side of that ocean, the US economy can only dream of the low levels Chinese industry has been putting up this late into 2020. At least those in the East are back positive year-over-year. Here in America, manufacturing and industry can’t even manage anything like a plus sign.

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This Global Growth Stuff, China Still Wants A Word

2020-12-16

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2020-12-16

Before there could be “globally synchronized growth”, it had been plain old “global growth.” The former from 2017 appended the term “synchronized” to its latter 2014 forerunner in order to jazz it up. And it needed the additional rhetorical flourish due to the simple fact that in 2015 for all the stated promise of “global growth” it ended up meaning next to nothing in reality.Oddly the same for 2017’s update heading into 2018 and...

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Inflation Hysteria #2 (Slack-edotes)

2020-12-13

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2020-12-13

Macroeconomic slack is such an easy, intuitive concept that only Economists and central bankers (same thing) could possibly mess it up. But mess it up they have. Spending years talking about a labor shortage, and getting the financial media to report this as fact, those at the Federal Reserve, in particular, pointed to this as proof QE and ZIRP had fulfilled the monetary policy mandates – both of them.

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Inflation Hysteria #2 (WTI)

2020-12-12

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2020-12-12

Sticking with our recent theme, a big part of what Inflation Hysteria #1 (2017-18) also had going for it was loosened restrictions for US oil producers. Seriously.

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Inflation Hysteria #2 (Nominal UST)

2020-12-09

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2020-12-09

UST Yield Curve, 2017-2018
What had given Inflation Hysteria #1 its real punch had been the benchmark 10-year Treasury note. Throughout 2017, despite the unemployment rate in the US, globally synchronized growth being declared around the world (and being declared as some momentously significant development), and whatever other tiny factors acceding to the narrative, longer-term Treasury rates just weren’t buying it.

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Polar Opposite Sides of Consumer Credit End Up in the Same Place: Jobs

2020-12-08

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2020-12-08

CPS Household Survey, 2003-2020
If anything is going to be charged off, it might be student loans. All the rage nowadays, the government, approximately half of it, is busily working out how it “should” be done and by just how much. A matter of economic stimulus, loan cancellation proponents are correct that students have burdened themselves with unprofitable college “education” investments.

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