201805.24
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Laboring Unnecessarily Over Housing Imbalances

There are three major housing related data series published each and every month. The first is on construction of new units, the intersection of real estate and the macro economy compiled by the Census Bureau. The second is the number of newly built single-family homes that have been sold, relating obviously to the level of…

201805.23
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COT Black: Diverging Like ’13?

During the week of February 21, 2017, Money Managers (MGR) in the WTI futures market went all the way for higher oil prices. The CFTC Commitment of Traders (COT) report showed a then-record 405k net to the long side. For whatever reason(s), oil prices didn’t necessarily follow at least not in the same nearly direct…

201805.23
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It’s Not The Minutes, It’s The Months and Years

It’s the kind of thing you’re supposed to overlook and not think too deeply about. Recall the basis of inflation hysteria: the economy was poised to take off and do so convincingly; that plus the ubiquitous LABOR SHORTAGE!!! meant that wages then inflation were going to break out higher; accelerating consumer prices were then to…

201805.23
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The Currency of PMI’s

Today is PMI day. Markit Economics released the flash results from several of its key surveys. Included is manufacturing in Japan (lower), as well as composites (manufacturing plus services) for the United States and Europe. Within the EU, Markit offers details for France and Germany. Given the nature of sentiment surveys, we tend to ignore…

201805.22
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Eurodollar University: Way Beyond Bank Reserves

The Crash of ’87 was a big deal, though not in the way most people remember. It was a stock market event, obviously, and those are the terms under which it has been understood. That’s not really its legacy, however, as the major shifts that began with Black Monday have had little and most often…

201805.21 4

Italy Went Boom A Long Time Ago (and that’s the point)

On June 21, 2017, Italy’s Parliament approved Law #96. The new regulation altered Law #130 of 1999. Pertaining to limitations on the activities of Special Purpose Vehicles (SPV), the 2017 amendment expanded their scope. The intention was clear; SPV’s were going to be used as the primary method of cleaning up Italian banks as a…

201805.21
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China’s Monetary Shell Game (Confirmed for Step 2)

Chinese bank reserves contracted in April 2018 for the first time in almost two years. The decline was small, just 0.2%, but it is still represents a significant deviation from the limited growth since the turmoil in 2015 and early 2016. The decline in reserves further corroborates our theory of events. To briefly review, China…

201805.18
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Chart of the Week; On the Contrary

It has been far more difficult to pick one Chart of the Week this week. There is so much going on right now, most of it revolving around the possible re-rising of the “dollar.” An unwelcome development, to be sure, but a potentially important one for the intermediate term direction of more than just EM…

201805.18
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TIC in March

When we last left off with the TIC data, the figures showed pretty clearly Japan’s retreat from “dollar” dealing during January and February. Global liquidations occurred during January and February. Therefore, it was reasonable to speculate upon Japanese origins of those liquidations. That wasn’t the only interesting development revealed by TIC. Over in Hong Kong,…

201805.18
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Welcome Back To The Wasteland

I believe if you were to ask most people their definition of the worst economic case, they would respond with some description of a crash. An exceedingly large contraction that spares practically no one, destroying much in its path. Like what followed 1929, that would seem to qualify. It’s why we spend so much time…