201607.27
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What The FOMC Has To Keep Repeating Matters, Not What It Changes

As usual, everyone is focused on the wrong part of the FOMC statement. There is already a lot being made about the one sentence inserted as “hawkish” sentiment that puts the economy, supposedly, back on its fruitful, “full employment” track. In a clear sigh of relief undoubtedly in relation to the scary May payroll report,…

201607.27
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The Ritual of Summer

Domestic oil inventory rose in the latest week, updates from the US EIA show. That build broke a streak of nine consecutive weekly draws dating back to mid-May. It is not unusual for oil inventory to rise and fall in various weeks, but given the mechanics of oil prices of late there is an atypical…

201607.27
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Evolving Characteristics Don’t Seem To Alter The Ritual of Summer

On February 6, 2008, oil prices (WTI) dropped to $87.16, the lowest price since the prior October. Oil had been rising as the market misunderstood and dramatically mispriced what was going on; buying on the idea of monetary policy accommodation in growing intensity, while at the same time not factoring the hidden monetary destruction that…

201607.27
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Durable Goods Start To Suggest Summer

The seasonal spring rebound seems to have reset all the economic narratives. When economic accounts, along with financial markets, started to seriously slide toward the end of last year, for the first time even the mainstream began to admit, grudgingly, that weakness wasn’t just some remote happenstance that was a minor nuisance to an otherwise…

201607.26
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The Official Face of the ‘Rising Dollar’, Written Officially As Farce

Last July, the US Treasury Department finally issued its official report detailing its account of what happened on October 15, 2014. The statement was co-authored by staff at the Board of Governors of the Federal Reserve System, FRBNY, the SEC, and CFTC, as if the government were going overboard trying to prove its word the…

201607.26
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Economics of the Second Wave

There is a core fallacy at the heart of monetary policy (actually there are many, but I’ll keep it to just this single instance for the sake of brevity), one that was exposed by Milton Friedman himself, though indirectly and quite accidentally related to how he proposed an alternate scenario for the Great Depression. His view…

201607.26
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The ‘Dollar’ May Only Ever Rhyme

It isn’t just that oil prices are falling, that is only one dimension of the full oil spectrum concentrating in the spot market. The more interesting and important information is contained within the whole WTI futures curve. As “dollar” funding pressure has built up since the front month peak on June 8, it has steepened…

201607.25
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Confidence Game

Oil prices fell again today and it seems that gasoline is now on everyone’s mind. As noted last week, I don’t think that is the reason for the price action except in that it tells a very different story than the one in the media about “stimulus” hope. The significance of crude and gasoline is…

201607.25
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Second Wave A Second Time, The Second Part

What happened in the period between 2007 and 2011 was the same that happened in 1930 and really 1931. The monetary “miracle” of the 1920’s was predicated on the same sets of inequalities and imbalances; revealed afterward in not just the crash that unwound the core processes but really in the lack of recovery that…

201607.25
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Second Wave A Second Time

It seems as if the FOMC still doesn’t know what to make of itself. In June, the May payroll report released earlier that month clearly spooked them; not even Esther George bothered to dissent in favor a rate increase. Since then, the world seems so much better. The media tells us with every new economic…