201411.25
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Contours of the Cliff

I usually ignore sentiment surveys as, to reiterate one more time, they do not mean what people think they mean (and certainly not how they are used). The ISM Manufacturing Survey, for example, has been on fire for most of 2014 in an almost exact mirror of 2011. And just like 2011, that told us…

201411.23
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The Return of Conundrum

co·nun·drum – noun: A confusing or difficult problem; a question or problem having only a conjectural answer Merriam-Webster Back in the last Fed tightening cycle, Alan Greenspan described the refusal of long term rates to follow short rates higher a conundrum, something he couldn’t really explain. Unlike past periods of tightening, long term rates refused…

201411.17
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From Unqualified ‘Savior’ To Afterthought In Only Five Months

China’s figures last week were not “helpful” to the “global growth” narrative, and now Japan and Europe have contributed their share of turning sentiment. It seems as if credit markets might actually be on to something with all this bearishness standing in stark contrast to stock markets that just don’t care about much except self-feeding…

201411.16
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Bubble Behavior?

I really hate the term bubble. With regard to markets, frankly it has no meaning. One man’s bubble is another man’s rational bull market. There is no agreed upon valuation metric which, once exceeded, pegs a market or a sector or a stock as a bubble. My view on the matter is that “bubbles’ are…

201411.14
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Not Just The Franc Showing Euro Concerns

With Europe reporting GDP, reactions have been somewhat varied. In some places, it was taken as not as bad as feared, while others were downright cheered by a lack of total collapse, as if that is now the standard for economic progress. Since GDP tends to be noisy in the short run, the major components,…

201411.13
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China Falters Again, Though Commentary Carefully Avoids Full Recognition

There was not much good news from China last night, particularly as there were no PMI releases to allow the media and economists to project uncorrelated optimism. Everything from industrial production to retail sales came in under “estimates”, with industrial production in October particularly worrisome as the second worst month (only better than August) since…

201411.12
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Why Bubbles Are Being Recognized

The nature of liquidity under the eurodollar standard is to essentially link “markets” that outwardly seem to have little or no relation. You can see the synchronized ups and downs quite clearly but miss the ultimate connection, especially under the orthodox assumption of the world’s economies and their “natural” finance as mostly closed systems with…

201411.11
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Marked Progression From Financial Promise to Economic Reality

The re-emergence of “tight” dollar “supply” has created much the same problems as had been seen prior to October. That means the usual places exhibit duress to varying degrees. What I don’t think is really appreciated is how this year’s episode is transformative toward a different set “ruling” the global dollar short. In one sense,…

201411.10
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Dragging Tycho Brahe To The Repo Market

I probably should start by issuing the caveat that it is dangerous to compare anything of the modern age to the revolution in astronomy dating back to the time of Copernicus. This is not at all about the supposed lack of tolerance at the time, as it seems as if there was more than enough…

201411.09
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Political Economy

I hate to do it, but I’m going to have to write about politics this week. Believe me, it isn’t something I relish, but in light of the recent election, it would be dereliction of duty to ignore the elephant and donkey in the room. Let’s get this out of the way right up front;…