201509.01
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Perfect Storm of PMI Egress

Today was, apparently, the perfect storm of downbeat PMI’s. As usual, sentiment surveys have limited value except in cases of outliers or in unanimity. There was some of both across the world’s manufacturing updates. First, which was certainly most watched, China’s PMI fell to a three-year low below 50, further suggesting that there isn’t yet…

201509.01
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The Nightmare Scenario

It wouldn’t be a day ending in “y” without some funky news about what the PBOC is now doing. Today’s edition includes the unconfirmed rumors of forex deposits. Apparently the PBOC is going to require, starting October 15 (are they trying to force the bottleneck?), banks to reserve 20% of some figure which isn’t at…

201509.01
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Lingering

With stocks selling off at least in morning trading, everyone is back asking “is it over” after last week supposedly quelled so much surface disquiet. The rebound in oil prices has been robust and a broad survey of “dollar” proxies indicated that the hugely negative run from August has relented. The notable exception to that…

201508.31
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Volatility As ‘Money’; Or Really Rising Vol As Anti-Money

I think it is worth re-examining at this point, with a lull in the “dollar” at the moment, the effects of dark leverage upon actual bank mechanics and thus actual “dollar” supply. The idea of liquidity in the wholesale system is multi-dimensional and often confusing as it relates to what is typically believed. For example,…

201508.31
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It Was Never An Option

In her testimony before Congress in July, Janet Yellen laid out the same talking points that have been propagated onto Americans time and time again these past eight years. The economy is moving forward and the Fed is doing and has done everything it can, and that there are “green shoots” still though no full…

201508.31
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The Age of Voodoo

The Jackson Hole gathering may end up providing at least some clarification, but not even close to the manner in which everyone seems intent on inferring. With Janet Yellen’s notable absence, there isn’t the same sort of celebrity about what would have been the media hanging upon every word; that is, after all, what the…

201508.28
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Turning Just 2.4% Income Growth Into A Robust Recovery

Today’s release of personal income and spending is very much related to the revised GDP figures, though I have no doubt that the BEA wishes it were not. To start with, the ongoing chain of benchmark revisions has produced an inordinately volatile set of economic accounts. That is quite against the stated purpose of all…

201508.28
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What The Yen Might Reveal

The moment you add the yen to any larger financial discussion it inevitably brings out passionate response. I think that is derived partially from its status as unbelievably durable; if there is one currency in the world that “deserves”, so to speak, ultimate execution it is that of the Japanese. The Bank of Japan has…

201508.27
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When The Yen Was A Last Resort Safety Bid, You Know It Was Bad

It looks like the reversal of Monday’s dramatic and frightful liquidation has held and gained in the past two days. From that we can infer, of only the near-term, that those forced repositions were enough to square the liquidity imbalance from the latest “dollar” run. The two words are related not just in a common…

201508.27
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GDP Might Have Been Almost 4% In Q2, But GDI of Just 0.6% Has The Quite Damning Weight Of Revisions

Lost in the euphoria over second quarter GDP revisions is the ongoing corporate struggle in terms of profits and how that suggests a more than reasonable proportion of GDP’s ability to measure the economy is overstated. To this point, I had focused more so on the productivity problems as they related to a potential over-optimism…