fbpx

Economy

The Third Order of Unraveling ‘Bank Shots’

By |2016-10-03T16:53:24-04:00October 3rd, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In economics, there is a great deal of thought and debate surrounding first and second order effects. In short, a first order effect is something that is directly caused by some change, while a second order effect is caused by the first order effect. In many instances it is the second order effects that countermand any of the first, rendering [...]

Global PMI’s ‘Languish’

By |2016-10-03T12:42:22-04:00October 3rd, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

From the orthodox binary view, PMI’s aren’t making any sense. Convention currently dictates that the economy must be growing, and where not moving unambiguously toward recession. Translating those expectations into these sentiment surveys means that under expectations for the former PMI’s should be not just above 50 but increasingly so, while the recessionary condition should measure nothing above 50 and [...]

Some Possible, Theoretical Insight Into ‘Something’

By |2016-09-30T17:07:18-04:00September 30th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In December 2000, the Financial Post orchestrated what it billed as a great debate, a clash of titans pitting two giants of economics against each other in a series of eight questions. Dubbed the Nobel Money Duel, on the one side was Robert Mundell, a Nobel Laureate often credited as the “father of the euro.” On the other was Milton [...]

Where’s The Money?

By |2016-09-30T12:09:34-04:00September 30th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The personal savings rate rose slightly in August, though as I have shown before in truth we have no idea what the actual savings rate might be. The revisions to it over the years have made it one of the least reliable indications in the economics catalog. The reason is the suddenly frequent tendency of the BEA to seriously revise [...]

More Deutsche Bank Attention Means Even Less ‘Dollars’

By |2016-09-29T17:11:24-04:00September 29th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It seems as if Deutsche Bank is on everyone’s mind, even if nobody knows exactly why. Stocks were down today which is really unremarkable but has become so by the standards of just this year where nothing bad is supposed to be able to intrude. That aside, the news from Germany was quite unnerving. Bloomberg reported early this afternoon that [...]

Searching For 2a7 Comfort In CP And Finding Instead More Confirmation Of The Same ‘Something’

By |2016-09-28T17:10:07-04:00September 28th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

With 2a7 money market reform only a few weeks from its full implementation, there should be by now visible shifts in all the places where such reform will directly impact. Prominent among these money spaces is commercial paper, where the ranks of prime MMF’s that once lent in this market have been reduced in the shift toward government funds. As [...]

A Realistic Decomposition Of Rates, Or At Least A Realistic Interpretation Of It

By |2016-09-28T13:10:03-04:00September 28th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Last April, former Fed Chairman Ben Bernanke wrote a series of blog posts for Brookings that was intended to explain one of the biggest contradictions of his legacy. If quantitative easing had actually worked as he to this day suggests that it did, why wasn’t the bond market in clear agreement? In order to try to reconcile the huge discrepancy, [...]

Moving Beyond Normal

By |2016-09-28T11:33:47-04:00September 28th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Durable goods continue to suggest a weak economy that only seems to remain in that state. Year-over-year, unadjusted estimates for new orders rose slightly for the first time since May, while seasonally adjusted total orders (including the transportation sector) were fractionally lower at $226.9 billion. That amount was 2% less than January 2016 and 4.3% below August 2014. Once again [...]

No Need For Yield Curve Inversion, There Is Already Much Worse Indicated

By |2016-09-27T16:39:41-04:00September 27th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Though I highly doubt he will admit it, he’s just not the type, even Ben Bernanke knows on some level that bond market is decidedly against him, or at least his legacy. Economists have a funny way of looking at bonds, decomposing interest rates into Fisherian strata. To monetary policy, interest rates break down into three parts: expected inflation over [...]

Go to Top