201605.27
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Converting Into The (So Far) Broken Correlation

The Chinese exchange rate has traded lower for five consecutive days, and aside from essentially no change last Friday would have been eight in a row. That contrasts with the downward pattern that existed ever since the turn in mid-April where only the general direction was down in not so much a straight line. The…

201605.27
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Investment Risk These Days Includes The Census Bureau

When I started in this business more than twenty years ago, I fully expected to be a profession investor in the purest sense of the term. I envisioned spending my days tearing apart corporate financials, especially balance sheets, and matching them to common sense expectations of new products and imaginative advances. It was the 1990’s,…

201605.26
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Even More Recovery Was Erased

As if something out of bad dream, the economy continues to shrink. Actually, the economy has been shrunken this whole time, it is only the full recovery narrative that has shriveled as each drastic data revision blasts apart what little is left of the positivity. We are made to believe that government data providers go…

201605.25
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The Money of Oil

The Ricardian theory of free trade has dominated economics philosophy for good reason. It has a sound basis in common sense and offers a theoretical guide to understand the nature of exchange from a systemic standpoint. It does not, however, cover all such basis for all such manner of trade. Comparative advantage is somewhat straightforward…

201605.25
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The End of The Beginning, Updated

Markit’s Services PMI fell to just 51.2 in May, dropping a rather large 1.6 points from 52.8 in April. That meant the combined US Composite PMI, which puts together both manufacturing and services, was barely above 50, registering just 50.8. As with all PMI’s the distinction around 50 is unimportant, what matters is the direction…

201605.25
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The Remarkable Accuracy of The Ticking Clock

The People’s Bank of China today fixed the CNY exchange (reference) rate below 6.56 for the first time since early February. That means all the tremendous effort that went into erasing December and January’s “dollar” pressure (not devaluation) has been unwound, as the currency now trades just about where it was at the start of…

201605.24
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Something In Some of The Data?

New home sales surged in April to 619k SAAR. That was the highest rate, by far, since January 2008 more than eight years ago. It was also the biggest monthly gain in twenty-four years, which either suggests home sales are more than rebounding or casts doubt upon the quality of the data. Economists left no…

201605.24
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A Discrete Look At What Is Bigger Than All The World’s QE’s Combined

In this brave new banking world of impenetrable bureaucratic morass designed to keep us all from ourselves (slogan: don’t panic, there’s a lot of new math), there are new acronyms for just about anything. To regulators, some groups of letters mean a lot more than they might for banks, while investors, loosely defined, focus on…

201605.23
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More Global PMI Suspicion

While Markit’s economic sentiment surveys had been perhaps a touch more optimistic about the state of the world than others or other data, May has been a rough month for that comparison. Again, it’s not the absolute number calculated for each survey but rather the relative direction and, in these cases, the uniformity of that…

201605.23
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More PMI Suspicion

It is easy to make jokes about the BEA’s newfound respect for “residual seasonality” that in the words of CNBC’s chief economist makes each Q1 appear to be a “different economy altogether”, but that doesn’t mean there isn’t something to it if in a far different manner than the mainstream would ever contemplate. There clearly…