Tag Archive: Markets

Real Estate Perfectly Sums Up The Rate Cuts

2019-07-28

NAR Existing Home Sales, Jan 2011 - May 2019

It’s only a confusing when you just accept the booming economy of the unemployment rate. From this perspective, 2018 was, and more so 2019 is, a downright conundrum. By all mainstream accounts, this just shouldn’t be happening.

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US Economic Crosscurrents Reach the 50 Mark

2019-07-27

by Jeffrey P. Snider

2019-07-27

U.S. PMI Chicago Fed NAI, Jan 2006 - July 2019

In the official narrative, the economy is robust and resilient. The fundamentals, particularly the labor market, are solid. It’s just that there has arisen an undercurrent or crosscurrent of some other stuff. Central bankers initially pointed the finger at trade wars and the negative “sentiment” it creates across the world but they’ve changed their view somewhat.

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Germany Struggles On

2019-07-25

by Jeffrey P. Snider

2019-07-25

Germany ZEW Financial Market Survey, Jan 2006 - 2019

The popular image of the German industrial machine politics is one which has Germany’s massive factories efficiently churning out goods for trade with the South of Europe (Club Med). Because of the common currency, numerous disparities starting with productivity differences had left the South highly indebted to the North just as the Global Financial Crisis would strike.

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What Does It Mean That Real Estate, Not Equities, Is Driving Monetary Policy?

2019-07-25

by Jeffrey P. Snider

2019-07-25

New Home Sales Population Adjusted, 1987-2019

In the world of assets classes, I don’t believe it is equities which hold the Federal Reserve’s attention. After the 2006-11 debacle, the big bust, you can at least understand why policymakers might be more attuned to real estate no matter how the NYSE trades. It may be a decade ago, but that’s the one thing out of the Global Financial Crisis which was seared into the consciousness of everyone who lived through it.

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Monthly Macro Monitor: We’re Not There Yet

2019-07-21

by Joseph Y. Calhoun

2019-07-21

I first wrote about the current economic slowdown a year ago and Jeff Snider actually started seeing signs of slowdown in the Eurodollar market as early as May 2018. So, the slowdown we’re in now certainly isn’t a surprise here at Alhambra. I think though that we often forget how long these things take to develop.

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Globally Synchronized, After All

2019-07-20

by Jeffrey P. Snider

2019-07-20

For there to be a second half rebound, there has to be some established baseline growth. Whatever might have happened, if it was due to “transitory” factors temporarily interrupting the economic track then once those dissipate the economy easily gets back on track because the track itself was never bothered.

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As Chinese Factory Deflation Sets In, A ‘Dovish’ Powell Leans on ‘Uncertainty’

2019-07-14

by Jeffrey P. Snider

2019-07-14

It’s a clever bit of misdirection. In one of the last interviews he gave before passing away, Milton Friedman talked about the true strength of central banks. It wasn’t money and monetary policy, instead he admitted that what they’re really good at is PR. Maybe that’s why you really can’t tell the difference Greenspan to Bernanke to Yellen to Powell no matter what happens.

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How To Properly Address The Unusual Window Dressing

2019-07-05

by Jeffrey P. Snider

2019-07-05

Unable to tackle effective monetary requirements, bank regulators around the world turned to “macroprudential” approaches in the wake of the Global Financial Crisis. It was mostly public relations, a way to assure the public that 2008 would never be repeated. A whole set of new rules was instituted which everyone was told would reign in the worst abuses.

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Japan’s Bellwether On Nasty #4

2019-06-25

by Jeffrey P. Snider

2019-06-25

Japan Industrial Production, NSA 2009-2019

One reason why Japanese bond yields are approaching records like their German counterparts is the global economy indicated in Japan’s economic accounts. As in Germany, Japan is an outward facing system. It relies on the concept of global growth for marginal changes. Therefore, if the global economy is coming up short, we’d see it in Japan first and maybe best.

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When Verizons Multiply, Macro In Inflation

2019-06-16

by Jeffrey P. Snider

2019-06-16

Inflation always brings out an emotional response. Far be it for me to defend Economists, but their concept is at least valid – if not always executed convincingly insofar as being measurable. An inflation index can be as meaningful as averaging the telephone numbers in a phone book (for anyone who remembers what those things were).

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Dimmed Hopes In China Cars, Too

2019-06-15

by Jeffrey P. Snider

2019-06-15

As noted earlier this week, the world’s two big hopes for the global economy in the second half are pinned on the US labor market continuing to exert its purported strength and Chinese authorities stimulating out of every possible (monetary) opening. Incoming data, however, continues to point to the fallacies embedded within each.

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Commodities And The Future Of China’s Stall

2019-06-13

by Jeffrey P. Snider

2019-06-13

Commodity prices continued to fall last month. According to the World Bank’s Pink Sheet catalog, non-energy commodity prices accelerated to the downside. Falling 9.4% on average in May 2019 when compared to average prices in May 2018, it was the largest decline since the depths of Euro$ #3 in February 2016.

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All Of US Trade, Both Ways, And Much, Much More Than The Past Few Months

2019-06-10

by Jeffrey P. Snider

2019-06-10

US Imports of Goods from China, NSA 1989-2019

The media quickly picked up on Jay Powell’s comments this week from Chicago. Much less talked about was why he was in that particular city. The Federal Reserve has been conducting what it claims is an exhaustive review of its monetary policies. Officials have been very quick to say they aren’t unhappy with them, no, no, no, they’re unhappy with the pitiful state of the world in which they have to be applied.

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Janus Powell

2019-06-09

by Jeffrey P. Snider

2019-06-09

Again, who’s following who? As US Treasury yields drop and eurodollar futures prices rise, signaling expectations for lower money rates in the near future, Federal Reserve officials are catching up to them. It was these markets which first took further rate hikes off the table before there ever was a Fed “pause.”

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Monthly Macro Monitor: Economic Reports

2019-06-04

by Joseph Y. Calhoun

2019-06-04

Is recession coming? Well, yeah, of course, it is but whether it is now, six months from now or 2 years from now or even longer is impossible to say right now. Our Jeff Snider has been dutifully documenting all the negativity reflected in the bond and money markets and he is certainly right that things are not moving in the right direction.

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What Kind Of Risks/Mess Are We Looking At?

2019-06-04

by Jeffrey P. Snider

2019-06-04

The fact that the mainstream isn’t taking this all very seriously isn’t anything new. But how serious are things really? That’s pretty much the only question anyone should be asking. What are the curves telling us about what’s now just over the horizon?

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More What’s Behind Yield Curve: Now Two Straight Negative Quarters For Corporate Profit

2019-06-01

by Jeffrey P. Snider

2019-06-01

The Bureau of Economic Analysis (BEA) piled on more bad news to the otherwise pleasing GDP headline for the first quarter. In its first revision to the preliminary estimate, the government agency said output advanced just a little less than first thought. This wasn’t actually the substance of their message.

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Europe Comes Apart, And That’s Before #4

2019-05-30

by Jeffrey P. Snider

2019-05-30

In May 2018, the European Parliament found that it was incredibly popular. Commissioning what it calls the Eurobarameter survey, the EU’s governing body said that two-thirds of Europeans inside the bloc believed that membership had benefited their own countries. It was the highest showing since 1983. Voters in May 2019 don’t appear to have agreed with last year’s survey.

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The Transitory Story, I Repeat, The Transitory Story

2019-05-24

by Jeffrey P. Snider

2019-05-24

Understand what the word “transitory” truly means in this context. It is no different than Ben Bernanke saying, essentially, subprime is contained. To the Fed Chairman in early 2007, this one little corner of the mortgage market in an otherwise booming economy was a transitory blip that booming economy would easily withstand. Just eight days before Bernanke would testify confidently before Congress, the FOMC had met to discuss their lying eyes....

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Proposed Negative Rates Really Expose The Bond Market’s Appreciation For What Is Nothing More Than Magic Number Theory

2019-05-23

by Jeffrey P. Snider

2019-05-23

By far, the biggest problem in Economics is that it has no sense of itself. There are no self-correction mechanisms embedded within the discipline to make it disciplined. Without having any objective goals from which to measure, the goal is itself. Nobel Prize winning economist Ronald Coase talked about this deficiency in his Nobel Lecture:

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