201807.06
7
14

Good Reason To Fear The Futures

The eurodollar futures curve has already turned on them. That’s why the sudden interest in things like federal funds futures. If it seemed yesterday with the release of the last meeting minutes that the FOMC members appear to be getting nervous, there is good reason. The eurodollar curve is already slightly inverted. Remember, these contracts…

201807.06
0
5

The Trade of Trade Wars

The opening shots of the so-called trade war have actually been very kind. It’s the sort of stuff Keynesian Economists live for. Activity has been accelerated across a broad front. US imports moved first and now perhaps US exports are in on it, according to the latest Census Bureau estimates. To begin with, the import…

201807.06
1
6

Bi-Weekly Economic Review: Welcome To The Slowdown

Welcome to the slowdown. It isn’t much – yet – and it may just be a passing phase, but there is little doubt that the US economy has slowed somewhat. The rise in short term interest rates has stalled and the long end of the curve has rallied. The result is a flatter yield curve…

201807.06
1
5

Much More Than Payrolls

There are two very big problems with these constant, increasingly shrill labor market anecdotes. The first is that they don’t end up meaning what the tellers think they do. The purpose of these stories is clear enough, it’s just that the logic doesn’t work in the end. Here’s another example from the Wall Street Journal…

201807.05
2
5

Very Strong(ly Worried)

Inflation hysteria and the boom hysteria may both seem like they are one and the same thing. They are related, sure, and they represent similar objects. However, there are subtle differences. The mania over inflation, for example, has subsided while the one about the economy reaches its own feverish pitch. In early June, Newt Gingrich…

201807.05
1
5

Talk About Binary; No In Between, Either Boom or Renewed Deflation

CNY has held up over the last few days after Chinese officials intervened. Central bank actions like these tend to work if only over the very shortest timeframes. The tentative calm there, however, hasn’t extended universally. Copper, for one, has fallen right out of its Reflation #3 range. Selling off solidly for almost a month…

201807.03 9

The Dreaded Vote of Confidence

Chinese officials are getting nervous. Everyone knows that whenever your favorite sports team struggles and fans are calling for the head coach’s head, any owner or general manager who then issues the dreaded (from the coach’s perspective) vote of confidence is essentially sealing his fate. PBOC Governor Yi Gang issued a similar sort of statement…

201807.02 4

The Populist Revolt; Now Mexico

Mexico will have a new President on December 1. Falling short in each of the prior two elections, Andrés Manuel López Obrador won convincingly this time. Though a thorough leftist, AMLO, as he is called in Mexico, ran on the familiar populist, anti-establishment topics. For yet another country its political background has shifted dramatically. Mexicans…

201807.02
8
8

The Deeper Red of JPY and WTI

There are several factors missing from the latest eurodollar rout. Well, not really missing so much as sitting this one out to this point in time. We knew things were really getting serious in 2015 when the Japanese yen joined the currency parade. Only it didn’t fall as others had, JPY rather rose very much…

201807.02
Off
7

There’s No Income So There Can’t Really Be Shortages

The plural of anecdote is not data. At any given time in any given economy you can find counterexamples. During the Great Depression, for example, millions of Americans were doing very well for themselves. It wasn’t difficult to locate and talk to those who were prospering during what was a legitimate catastrophe. It’s never all…