201412.19
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A Different Kind of Inversion

One of the most curious aspects of the FOMC’s apparent rush to end its “accommodation” is the distinct lack of any market-based reinforcement. Using only statistical analysis of economic accounts, the Fed is, in effect, saying that it is ignoring all market indications contrary to its main assessment. That extends not just to overall economic…

201412.19
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Stage 2 Of Oil Price ‘Explanations’

Though they still refer to “supply” in almost every written piece about the recent oil price action, it is now more of a background note. Instead, the narrative is being forced by reality to adjust. Finally recognizing the role of demand in oil prices, the excuse morphs into “it’s only temporary.” Global oil markets are…

201412.19
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Credit Doesn’t Care At All What the FOMC Says

The stock market takes off in holiday celebration of the FOMC being even less clear than it really has been in some time; perhaps going all the way back to Alan Greenspan’s intentional mush. Equity “investors” are happy that the Fed may be happy about the economy, even though there is nothing in actual markets…

201412.18
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Switzerland ‘Fights’ The Russian Problem, But Russia’s Problem Is As Brazil

Indonesia has been here before, playing a key role in fomenting the Asian “flu” in 1997 and 1998. As it turned out, the slide in the rupiah last year, caught up in the taper drama of US “dollar” tightening, was just the initial phase of what looks to be shaping up as a protracted “dollar”…

201412.17
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Woe the ‘Dollar’

It seems Charles Dickens had a flair for 21st century economics all the way back in the 19th century. Writing in his book Little Dorrit (thanks to W Krauss for the reminder) he observed that credit systems tended to be, “…a person who can’t pay, gets another person who can’t pay, to guarantee that he…

201412.17
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Home Construction And The Legacy Channel

The primary monetary channel for “stimulating demand” has traditionally fallen through real estate. Mortgage finance is the largest private source of financialism, reaching directly to people’s personal economy. The price appreciation of houses and the availability of mortgage credit are seen by orthodox economics as the basis for marginal “demand” changes in a theoretical philosophy…

201412.17
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Finally Some Inflationary ‘Demand’

It may not be Japan that falls victim first to currency collapse, as Russia is poised on the brink of 1998-style disaster. The nature of inflation in Russia right now is the basis for orthodox economics and its proposition under rational expectations theory. In fact, Russians at this very moment are “proving” the theory: Russian…

201412.16
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How We Got Here

The answer to every economic problem is one version of statism or another. If monetarism doesn’t succeed in “pump priming” with credit and inflation “stimulus” then surely the fiscal side will with “automatic stabilizers” and indiscriminate government expansion. These two grand economic strategies are often separated as if they are distinct sets of disparate theory;…

201412.16
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TIC Confirmation of October

With the latest TIC data in hand it looks more and more like “dollar” problems started in the interior and spread outward. What I mean by that is eurodollar banks were the first to see or cause disruption which radiated outward into other currencies and credit systems. That would seem to confirm (for me, anyway)…