201703.28
0
1

What The World Needs Now

What good would opening monetary policy do? The “audit the Fed” bill has been passed again, this time out of committee and possibly set for a floor vote in the House. Though questions remain about the Senate, with at least President Trump its prospects are better than at any time it passed before. Proponents of…

201703.28
0
0

The Basis For The Changing Economic Basis

When Apple introduced the first iPhone in January 2007, the 8 gig model retailed for $599. The company cut the price to $399 that September in an alliance with AT&T. The 8 gig iPhone 3G that debuted in July 2008, just eighteen months later, was set at $199, and less than a year after that…

201703.28
0
2

The Basis For The Changing Basis

It is simply the nature of modern Economics to get most things backward. Positive Economics particularly in the form of econometrics has been like a declaration of ignorance, where Economists have formally decided to try and understand as little as possible. If you know anything about statistics you know why, for the one thing that…

201703.27
1
2

Curves Need No R-star; Economists Need R* To Decode Curves

As the yield curve flattened out almost in a straight line from late 2013 until July 2016, it became common to suggest the historical relationship between inversion and recession. While that may still be a valid interpretation, as the yield curve ultimately did not invert and the US did avoid falling fully into recession, it…

201703.27
1
0

Bi-Weekly Economic Review

The Fed did, as expected, hike rates at their last meeting. And interestingly, interest rates have done nothing but fall since that day. As I predicted in the last BWER, Greenspan’s conundrum is making a comeback. The Fed can do whatever it wants with Fed funds – heck, barely anyone is using it anyway –…

201703.27
0
2

Consensus Inflation (Again)

Why did Mario Draghi appeal to NIRP in June 2014? After all, expectations at the time were for a strengthening recovery not just in Europe but all over the world. There were some concerns lingering over currency “irregularities” in 2013 but primarily related to EM’s and not the EU which had emerged from re-recession. The…

201703.24
1
3

TIC Analysis of Selling

When the Treasury Department released its Treasury International Capital (TIC) data for December, what was a somewhat obscure report suddenly found mainstream attention. Private foreign investors had sold tens of billions in US securities primarily US Treasury bonds and notes which the media then made into some kind of warning to then-incoming President Trump. It…

201703.24
1
4

Durable Goods After Leap Year

New orders for durable goods (not including transportation orders) were up 1% year-over-year in February. That is less than the (revised) 4.4% growth in January, but as with all comparisons of February 2017 to February 2016 there will be some uncertainty surrounding the comparison to the leap year version. That would suggest that orders as…

201703.24 4

The Inverse of Keynes

With nearly all of the S&P 500 companies having reported their Q4 numbers, we can safely claim that it was a very bad earnings season. It may seem incredulous to categorize the quarter that way given that EPS growth (as reported) was +29%, but even that rate tells us something significant about how there is,…