201605.03
0
0

Benign Foreign Dollar Buffer or Systemic Collateral Issues, Continued Illiquidity and ‘Dollar Strain’?

There isn’t a whole lot known about the Federal Reserve’s Foreign Reverse Repo accommodation, and I believe that is intentional. The rate which the Fed pays to “borrow cash” from foreign central banks and governments is unknown. What is known is just how much in total the Fed is “accommodating” foreign dollar business. This RRP,…

201605.03
0
0

Getting Far Too Caught Up In The One Step Forward

It seems as if some “markets” are having a difficult time coping with the different speed at which the economy is changing. Maybe that should be expected given the dramatic transformation of them into often computer-driven frenzies of headline scans. But this is something else, made so by the nature of this current economic condition…

201605.03
1
0

PMI’s May Seem To Change, But The Trend Does Not

The ongoing lesson in PMI interpretation added another layer with China’s turn. The official manufacturing PMI dropped back to 50.1in April from 50.2 in March. Last month’s rise above 50 was the first in that position since last July. Because of the mainstream interpretation about what 50 or not 50 means, it was taken then…

201605.02
0
0

The Weakness Is Really Different Now

If there is any wonder why PMI’s deserve scorn, this morning’s twin bill delivered solid reasoning. Both the ISM Manufacturing Index and the Markit Manufacturing PMI declined, and both remained above 50. However, there was no real consensus about what any of it meant. Depending on the media outlet determining commentary about either, there was…

201605.02
3
0

Coming To Terms With Money; Part 2

To economists nothing about the 2000’s makes sense (a condition that has only grown worse in the 2010’s). At the same time productivity growth suddenly disappears, in its place is this incomprehensible “global savings glut.” While it has been tempting to dismiss these shifts as anomalies, even orthodox economists cannot just ignore them given the…

201605.02
2
0

Coming To Terms With Money; Part 1

The assumed relationship between inflation and employment, unemployment really, has been tortured in the last half century. Given the constant mistakes economists make in this regard, it is fair to conclude that they really don’t have much idea at all about the connection. There is a fatal conceit contained within the orthodox views here that…

201604.29
0
0

They Want It To Be About Inflation

There was more bad news for the FOMC over the past few days beside the once again near-zero GDP estimate. If the labor market were truly growing as is claimed, we should be finding “inflation” in a broad set of different economic views. From the standard inflation calculations to various estimates for wages or income,…

201604.29
0
0

Always About Income

The emphasis on the labor market has become ubiquitous but it is not being used in the manner with which it should be used. It is now permanently attached to words like “despite” or “in contrast” no matter which economic data point is being described. The Wall Street Journal provides a perfect example in writing…

201604.29
4
0

Understanding the Basis Is The Most Pressing Task In The World

On December 27, 1990, changes to Regulation D went into effect with the maintenance period that began that day. Among those alterations was a reduction in the reserve requirement imposed upon what are officially called “eurocurrency liabilities.” Under the Monetary Control Act of 1980, which made reserve requirements universal to any US chartered federally insured…

201604.29
0
0

Chart Of The Week: Silver Miners vs Gold Miners

You’d have to be living under a rock to not know that gold is surging this year. And gold miners are performing even better than the metal itself. In a sign that the rally in precious metals might be getting a little more speculative, silver has started to outperform gold. And silver miners are outpacing…