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Markets

The Purge of QE

By |2017-03-29T17:26:41-04:00March 29th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As I wondered yesterday, what good would opening up the Federal Reserve do for us? What you would find is already out on the table. We would be treated to hidden insight that already exists in public, such as that delivered by FRBSF President (and CEO) John Williams just today (thanks to T. Tateo for pointing it out). He pronounced [...]

What The World Needs Now

By |2017-03-28T18:57:02-04:00March 28th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What good would opening monetary policy do? The “audit the Fed” bill has been passed again, this time out of committee and possibly set for a floor vote in the House. Though questions remain about the Senate, with at least President Trump its prospects are better than at any time it passed before. Proponents of the idea want to make [...]

The Basis For The Changing Economic Basis

By |2017-03-28T17:13:52-04:00March 28th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When Apple introduced the first iPhone in January 2007, the 8 gig model retailed for $599. The company cut the price to $399 that September in an alliance with AT&T. The 8 gig iPhone 3G that debuted in July 2008, just eighteen months later, was set at $199, and less than a year after that was suggested to retail at [...]

The Basis For The Changing Basis

By |2017-03-28T12:13:18-04:00March 28th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It is simply the nature of modern Economics to get most things backward. Positive Economics particularly in the form of econometrics has been like a declaration of ignorance, where Economists have formally decided to try and understand as little as possible. If you know anything about statistics you know why, for the one thing that bogs down statistical equations and [...]

Curves Need No R-star; Economists Need R* To Decode Curves

By |2017-03-27T19:33:29-04:00March 27th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As the yield curve flattened out almost in a straight line from late 2013 until July 2016, it became common to suggest the historical relationship between inversion and recession. While that may still be a valid interpretation, as the yield curve ultimately did not invert and the US did avoid falling fully into recession, it misses the far more important [...]

Bi-Weekly Economic Review

By |2017-03-27T17:51:06-04:00March 27th, 2017|Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks, Taxes/Fiscal Policy|

The Fed did, as expected, hike rates at their last meeting. And interestingly, interest rates have done nothing but fall since that day. As I predicted in the last BWER, Greenspan's conundrum is making a comeback. The Fed can do whatever it wants with Fed funds - heck, barely anyone is using it anyway - but they can't control what [...]

Consensus Inflation (Again)

By |2017-03-27T13:11:07-04:00March 27th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Why did Mario Draghi appeal to NIRP in June 2014? After all, expectations at the time were for a strengthening recovery not just in Europe but all over the world. There were some concerns lingering over currency “irregularities” in 2013 but primarily related to EM’s and not the EU which had emerged from re-recession. The consensus at that time was [...]

TIC Analysis of Selling

By |2017-03-24T16:38:30-04:00March 24th, 2017|Economy, Federal Reserve/Monetary Policy, Markets|

When the Treasury Department released its Treasury International Capital (TIC) data for December, what was a somewhat obscure report suddenly found mainstream attention. Private foreign investors had sold tens of billions in US securities primarily US Treasury bonds and notes which the media then made into some kind of warning to then-incoming President Trump. It was supposed to be a [...]

Durable Goods After Leap Year

By |2017-03-24T12:57:13-04:00March 24th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

New orders for durable goods (not including transportation orders) were up 1% year-over-year in February. That is less than the (revised) 4.4% growth in January, but as with all comparisons of February 2017 to February 2016 there will be some uncertainty surrounding the comparison to the leap year version. That would suggest that orders as well as shipments were somewhat [...]

The Inverse of Keynes

By |2017-03-24T11:33:18-04:00March 24th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

With nearly all of the S&P 500 companies having reported their Q4 numbers, we can safely claim that it was a very bad earnings season. It may seem incredulous to categorize the quarter that way given that EPS growth (as reported) was +29%, but even that rate tells us something significant about how there is, actually, a relationship between economy [...]

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