201503.03
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It’s Not A Stock Bubble But A Bigger Corporate Bubble

With liquidity running somewhat perilously noncommittal since June, you would think the riskiest parts of the credit market would be most affected. That is incorrect and once again stands out as to the bubbly nature of the current age. Aside from liquidity draining enthusiasm into and around October 15 and December 1, high yield debt…

201503.03
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Where There’s A Rising ‘Dollar’ There Is Short Collateral But Plentiful ‘Reserves’

The Federal Reserve is running another large-scale test on its Term Deposit Facility (TDF), the account by which it intends to establish a European-style floor to its also intended interest rate corridor. Judging by the fact that nobody has paid any attention to this test or the one that preceded it, except for those that…

201503.03
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Swirling ‘Dollars’

Despite the relative peace and tranquility in dollar-denominated credit markets at present, the “dollar” itself continues to rise. Clearly the acceleration of that trend has waned in recent weeks, but nonetheless is still moving upward to the point it is at the highest level in more than a decade. Somehow most commentary takes such a…

201503.02
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Optimism/Pessimism: Stocks At Record Highs While Savings Rate Jumps

Stocks had a great day today unshaken by whether the manufacturing part of the economy was growing more quickly or at the slowest rate in 13 months. Confusion isn’t part of the asset inflation lexicon. In economic news, the U.S. manufacturing sector had its best gains since October, according to Markit’s final Manufacturing Purchasing Managers’…

201503.02
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Crude Parallels

The Great Recession was seven years ago so it might seem appropriate that our memories of the specific nature and order of events is lost to time. However, given that it will be a seminal event in history (hopefully not surpassed) there is less leeway to having such a short grasp on the important pieces….

201503.02
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China Steering Away From or Back Toward Bubbles?

The confusing nature of the PBOC’s actions in the past year or so has led now to publications of theories over a potential power struggle at the central bank. While finally acknowledging that last year was all about “targeted” approaches to monetary “guiding” economic reality, this year is about to explode in personnel changes and…

201502.27
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Chicago Really, Really Didn’t Cooperate

The last time I commented on the Chicago Business Barometer (formerly the Chicago PMI) it was over a one-month drop that was quickly erased. That violated a personal rule whereby I make every effort to ignore sentiment surveys as they both do not mean what they are taken for and are usually of dubious value….

201502.27
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Harmonized Inflation

France was the latest Eurozone country to announce officially an entrance into negative “inflation.” The French were very cautious, overly it might be said, to assure that such an outcome was not at risk of pushing that economy into “deflation.” Apparently, rigidity in wages from socialism is a factor as an economic buffer, though left…

201502.27
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GDP Is Speculative

I think the ongoing destruction in the Japanese Household sector demonstrates very well a specific shortcoming about economic statistics like GDP. The basic calculation of the particular measure that forms the headlines of almost all commentary is a comparison of the current quarter to the previous one. That right away opens the door to incongruities…

201502.27
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Still No Gain

Despite all evidence to the contrary, an imbalanced ledger of data that grows more imbalanced by the month, commentary continues to describe QE as pro-growth stimulus. As usual, the purest form of rebuke to that sentiment can be found in Japan where QQE has performed a global service just not in the way its theorists…