201507.29
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More QE Non-neutrality

The simple narrative about QE is drawn from what is believed a simple process. The central bank buys bonds and by doing so it is simply assumed to be an “extra” bid on bond prices; therefore interest rates fall in whatever issue is being targeted by QE. Even in the US, QE has had trouble…

201507.29
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At This Point, What Difference Does ‘Some’ Make

Despite being the last FOMC meeting before the ever-expected rate hike in September , there was a whole bunch of nothing in markets before and even after the policy statement. Even the typical knee-jerk was less than on prior meetings. Maybe traders have come to expect so very little from the policy statement, focusing more…

201507.29
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The Confidence Experiment

I typically stay away from sentiment indicators and measures of “confidence” not just because they are of dubious construction but they often don’t mean what they are taken for. In the case of consumer confidence, you get both problems simultaneously particularly at the ends of each cycle. In other words, just as “confidence” is at…

201507.28
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Home Sales and Pricing Not Building Up To Expectations

The housing market has failed to perform as expected on either side. Instead, as far as a broader set of measures, real estate is in a bit of stasis, neither really growing nor falling apart. Given the set of mainstream economic expectations, that is confounding and could ultimately be a problem. If the economy is…

201507.28
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Economists Try To Find ‘Missing’ GDP Rather Than The Lost Economy

With the advance report on GDP for Q2 set to be released this week, economists are working hard to explain why it doesn’t represent the utopian delivery that they swear had already occurred via monetary intervention. There is, in immediate terms, the universal appearance of “residual seasonality” in the past few months as an almost…

201507.28
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Swiss Eurodollar Anecdotes Upon Dark Leverage

It will be a few more days before the major banks release their quarterly balance sheet figures for Q2. We already know from their earnings reports that money dealing is no longer much of a high priority for global banks, as it is, quite simply, no longer profitable. Commentary still dwells on that as a…

201507.27
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New ‘Dollar’ Proxy Lows

The “dollar” problems continued this morning as several proxies continued toward new lows. Copper fell to as low as $2.342 (July contract still) while crude is down close to $47 in the front months. The back end of the WTI curve, perhaps more importantly with respect to growth and fundamentals tied to the “dollar”, fell…

201507.27
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Still Peering At Our Unstable Future

The old cliché is that everything of significance in life is a marathon rather than a sprint. In Japan, such sentiment strains all reason as there is no way that any marathon, economic or otherwise, could possibly be expected to last more twenty-five years. But here it is in 2015, thirty years after the Plaza…

201507.27
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Slump Completes Half Year With No End in Sight (And First Half Worse Than First Thought)

The benchmark revisions (trend-cycle) to durable goods left us with a smaller estimated economy but that wasn’t supposed to be a problem because all that matters supposedly is what comes next. In other words, the cycle was already deficient so the scale of that deficiency was not meant to suggest anything about the next phase,…

201507.26
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Frustrated Yet?

The last year has been a tough one for investors. There are a few places one could have booked a double digit gain in the last 12 months but not many and certainly not in assets that are in the standard portfolio. Currency hedged ETFs for European and Japanese stocks produced big gains but a…