201508.31
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The Age of Voodoo

The Jackson Hole gathering may end up providing at least some clarification, but not even close to the manner in which everyone seems intent on inferring. With Janet Yellen’s notable absence, there isn’t the same sort of celebrity about what would have been the media hanging upon every word; that is, after all, what the…

201508.31
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The Weekly Snapshot

Top News Headlines Whipsaw market in full effect. Stocks stage a bounce-back, at least temporarily. The VIX Index is still at 26. Crude oil up over 10% for the week; biggest weekly gain in 6 years. Sanders, Trump ride anti-establishment wave. Fed rate cut to be delayed? Alaska’s Mount McKinley to be renamed Denali. Random Thought…

201508.30
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Still Not Where We’re Going…

Let’s start this week’s missive off with a disclosure of sorts – I am not Joe Calhoun. Unlike Joe, I have managed to hold on to my hair over the years although the last week has been challenging in that regard.  Joe and his lovely wife, Fay, took an extended weekend off and headed towards…

201508.30
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PBOC’s Financial Liberalization Path

Here is a small piece from our strategic macro research partner, MRB, on what some may have missed in the People’s Bank of China move Tuesday. Yes rates and reserve requirements were cut to combat the tightness in financial markets stemming from a combination of lower nominal growth and higher expected future cost of capital….

201508.28
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Turning Just 2.4% Income Growth Into A Robust Recovery

Today’s release of personal income and spending is very much related to the revised GDP figures, though I have no doubt that the BEA wishes it were not. To start with, the ongoing chain of benchmark revisions has produced an inordinately volatile set of economic accounts. That is quite against the stated purpose of all…

201508.28
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What The Yen Might Reveal

The moment you add the yen to any larger financial discussion it inevitably brings out passionate response. I think that is derived partially from its status as unbelievably durable; if there is one currency in the world that “deserves”, so to speak, ultimate execution it is that of the Japanese. The Bank of Japan has…

201508.27
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When The Yen Was A Last Resort Safety Bid, You Know It Was Bad

It looks like the reversal of Monday’s dramatic and frightful liquidation has held and gained in the past two days. From that we can infer, of only the near-term, that those forced repositions were enough to square the liquidity imbalance from the latest “dollar” run. The two words are related not just in a common…

201508.27
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GDP Might Have Been Almost 4% In Q2, But GDI of Just 0.6% Has The Quite Damning Weight Of Revisions

Lost in the euphoria over second quarter GDP revisions is the ongoing corporate struggle in terms of profits and how that suggests a more than reasonable proportion of GDP’s ability to measure the economy is overstated. To this point, I had focused more so on the productivity problems as they related to a potential over-optimism…

201508.26
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Like 2008 Never Happened

It seems increasingly to dawn on Chinese commentary that there is much more going on than “devaluation.” The latest has drawn in the Chinese hoard of UST assets, as it is clear that China is “selling” them though there is great confusion as to why or even what that actually means. The world of forex…

201508.26
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Durable And Capital Goods Still Contracting

At some point, these continuous divergences between seasonally-adjusted extrapolations and unadjusted year-over-year comparisons will cease to provide so much apparent relief. Time after time, the smallest jump in the monthly variation is taken as cause for completely discarding all prior economic worries even though the more measured and consistent unadjusted growth rates continue to press…

201508.26
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Rationalizing Betrayal

To illustrate just how badly Monday’s selloff (and yesterday’s late day reversal) seems to have shaken core confidence in the overriding narrative (ALL IS WELL!) you need only view the drastic reversal on what stock prices supposedly mean. With QE’s producing little or no tangible economic benefit, certainly nothing specific with which its proponents can…