US Credit Bear Answers Europe & Japan

I have already written enough on a Friday before a long weekend about the growing pessimism in credit, but it bears reinforcing that such removal of central bank faith is not limited to Europe and Japan. US credit markets and dollar systems are equally partaking in the speed and depth of the bear flattening. Just .. read more

Did Eonia Just End the ECB’s Recovery Fiction?

What should most troubling to investors of all stripes and locales is that what is going on in Europe is almost exactly the same as what is taking place in Japan. Despite nearly all outward appearances, Japan and Europe have far more in common than differences, at least where it counts. The Japanese have finally .. read more

Our Future On Full Display Right Now

The Bank of Japan has already been pressured by events to reduce its economic expectations for 2014. At the end of 2013 there was enough cautious optimism that Japanese officials went ahead with their dubious proposal to try to appear fiscally responsible. The tax increase was expected to create a mild contraction in GDP before .. read more

Attending the Exits, Part 2

There are several misconceptions about the US$ as the world’s reserve currency, including the use of the hegemony qualifier. Part of that stems from a very persistent lack of understanding about what actually took the place of the gold exchange standard after Bretton Woods (which itself is misunderstood as it replaced other forms of exchange .. read more

The Jackson Hole Snoozefest

The stock market rallied hard into Janet Yellen’s speech Friday at Jackson Hole, expecting some epiphany I suppose about the future course of monetary policy. What we got instead was Labor Market Dynamics And Monetary Policy, the purpose of which I can only suppose was to bore the market to death. Economics is not the .. read more

Gold, Bonds and Global Repositioning

There is a growing bid for safety in almost every corner of the globe at this moment, save for a few outliers. Even the 10-year JGP sits at 50 bps today despite the spike in consumer inflation engineered by the Bank of Japan’s QQE. Of course, with BoJ buying up almost everything in sight, that .. read more

They Really Should Begin to Model The Inverse

As I noted yesterday with US housing construction, there has been a very unusual amount of emphasis added to the month-to-month changes of various indications. Maybe that is no more than normal, but it seems as if the confidence displayed in the minutiae has been amplified. Given the circumstances, that is both understandable and reprehensible .. read more

Rocky Days Ahead

There is little for me to say about the GDP figures from Europe, released this week to much shock and discomfort, as I am frankly tired of GDP and eagerly await the unhonored end of its continued mainstream “significance.” The largest problem with it is that its correlation with actual economic results has clearly broken .. read more