201503.30
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Disinflation Is Not Cash

Personal spending had fallen, seasonally-adjusted, for two consecutive months placing warning upon the household sector. The just-released estimates for January show only the smallest of rebounds, just +0.1%, in February suggesting that nothing yet has been resolved in either direction. Unlike last year, there is no surge that would indicate a temporary straying from the…

201503.30
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Bernanke Admits, After Decades Contrary, The Fed Is Powerless

Former Fed Chairman Ben Bernanke welcomed himself to the online economics community by initiating a personal blog at the Brookings Institute where he has landed as a Distinguished Fellow in Residence. This initial posting has created quite a stir, as you might expect, which has to be among the primary reasons for this venture. I…

201503.27
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Banco do Brasil Denies Its Own Self-Destructive Measures

The axiom of most central banking is to “buy time” so that any deemed improper imbalance can be retrieved, set aside and allow for restoration of positive function. Colloquially, it is often referred to as “extend and pretend” not just because of intended affront but rather due to how fitting the circumstances so often apply….

201503.27
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But The Payroll Report…

It wasn’t supposed to be the case that China would steal all the attention from Japan. We are only a few days away from QQE’s second anniversary and all expectations were purposely set to be a full-blown revival by now. The dedication and skill with which the Japanese economy was handled was meant to conclusively…

201503.27
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Cash Flow Seems To Explain Why 5% GDP Was A Myth (Among Other Discrepancies)

Coincident to the “final” release of quarterly GDP are the updated estimates for corporate profits. While the Q4 headline didn’t much alter from the preliminary version sent out a month ago, there was much in the profit section relevant to both economic cycle and structure. The BEA provides several different breakouts of business profits, but…

201503.26
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FOMC: Not Only Is There No Recovery, Don’t Ever Expect One

Taking a look back at economic projections from orthodox models (and the theories they incorporate and encompass) is more than just a review of past econometric failures. That is the most obvious component as the ability of mainstream models to forecast actual economic conditions is inarguably flawed beyond repair. That calls into question, certainly, current…

201503.25
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A Realistic Scenario For Unrealistic New Homes

At first glance, yesterday’s release of new home sales estimates defied any sense of sense. As such, it seemed better to simply let it alone until revisions attempt to address the extreme outlier results for February. However, after further review, there may be another factor to consider as to whether there is anything worthwhile rather…

201503.25
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Durable Goods Take February Too

So far the economic retrenchment has persisted into February, outlasting any significant January weather. The latest worrisome figures came in the form of durable goods and especially capital goods. The former is another peg in the consumption side while the latter is one of the few glimpses of wealth creation (if far from a complete…

201503.25
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The True Expression of the Modern Yield Curve

The emphasis of QE in terms of “portfolio effects” and interest rate “stimulus” is to visit upon the entire curve what monetary policy has done in the past in only the shorter maturities. So the evolution of monetarism under activism and interest rate targeting is to bring the entire curve down whereas before it was…

201503.24 0

Distinguishing Curves

While the more interesting action has shifted to funding markets, the treasury curve remains at least relevant to the analysis of all those ebbs and flows. For the most part, the yield curve in UST has found itself stuck in a rather tight range right at the bottom of the “cycle.” While that would be…