The Unearned Age of Certainty

In continuing yesterday’s pointed critique of the current state of monetarism, there is another element to consider here. To reiterate, last year the yen devaluation was unquestionably seen as a catalyst toward rebirth of Japan Inc, and thus Japan economically (and maybe even demographically). This sentiment was as ubiquitous as it was accepted on faith: .. read more

Death of Ceteris Paribus

It was the introduction of two Latin words that doomed the modern discipline of economics. As the mathematical modeling craze swept into what is now econometrics, the derivation of theories and, more importantly, the statistical “evidence” of those theories rested upon ceteris paribus – “with other things the same.” It is difficult to accept even .. read more

Always the Dollars

Even though the data is stale by the time of its eventual release, I think the TIC figures still maintain some relevance. If nothing else, even on a rear-facing basis, it provides more consistent data to confirm or deny previous narratives. To this point, that description includes central banks mobilizing dollar assets to deflect continuous .. read more

The Inconvenient Marriage of Yuan and Gold

The latest money growth figures from China seemed to have brought back worries over more disorder in finance. Tomorrow the Chinese government will release GDP figures for the first quarter and current expectations (I know) are for 7.3% Y/Y growth. That would be the slowest rate of expansion in memory. The two are inextricably linked .. read more

A Weak Dollar Environment

The US Dollar index exhibits the classic characteristics of a downtrending asset: Declining 50 and 200 day moving averages with the 50 solidly below the 200. Momentum indicators (MACD, PMO) both on sell signals. A longer term view shows the index on the edge of support: A break of the 78-79 support level would open .. read more

Dollar and Trade Delinked Globally; It’s All Finance Now

The news from China this morning was unexpected only to those who still cling to the idea that the PBOC control is omnipresent. Exports were down 6.6% Y/Y in March (after dropping 18.1% Y/Y in February), while imports simply collapsed 11.3% Y/Y. Since China has been operating as the global trade pivot, the results on .. read more

The ECB Boiler Room

To say that Greece is an economic and fiscal mess is to be repetitive. While the imprint of victimization stains much of the economic collapse, it is at least somewhat strongly applicable in the reminder that financialism is a huge strain in the long run. As with nearly everything European since last summer, the whispers .. read more

Lack of US Demand Dooms Global Trade

The word decoupling has made a comeback in recent months. In 2008, it was believed that the world would be able to withstand a slowdown in US growth, as global markets would “decouple” from the primacy of US consumers. In some ill-conceived instances, it was even argued that financial markets would as well. Of course, .. read more