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

The Anniversary: No Going Back

It is hard to believe that this past weekend marked the seventh anniversary of the paradigm shift in global financial function. Everything that has occurred in the years since can be traced to those days in August 2007 when money markets broke down for the first time. Even the current, though measured, move away from .. read more

The China Shuffle

Chinese financial behavior more recently has been far more favorable than the first part of the year. While there still remains this idea of PBOC control, I think, again, that the second quarter fully bears out the lack of control and the fear that engendered. Very quietly, the PBOC in June rolled out something called .. read more

Economists Try To Calculate The Wages of Angels Dancing On Pinheads

Janet Yellen began the debate, loosely termed, when she classified recent CPI and other measures of price changes as “noisy.” That created sort of an odd wedge between the FOMC policymaking orthodoxy and the wider set of orthodox economists that typically share the same exact dispositions on everything (especially since one feeds the other). The .. read more

China and the Central Bank Exposition

Earlier in the year, China was the primary topic of conversation as its economy teetered upon the precipice of the great unknown, growth less than the “minimum”, while corporate defaults suddenly became somewhat contagious. At the time, monetarists globally were unconcerned despite the outward projection of a high degree of disorder because they “knew” the .. read more

Pity Japan

I have little doubt that the most perverse aspect of orthodox economics is the idea of monetary neutrality. Taken as nothing more than an article of faith, monetary practitioners use the principle as cover to undertake drastic and blunt intrusions into markets and economies, with no guilt over having done so because they can simply .. read more

The Bad News Of Repo Fails Subsiding

With the latest data from FRBNY in hand, the surge in repo fails authorities and certain credit market observers that were stressed over the affair, it is actually confirmation of regularity, and thus a high degree of systemic deficiency. Further, as a real world test, it ends any credibility the reverse repo program had as .. read more