201505.29
1
0

Peering Toward Q2

A couple more points about GDP revisions and the outlook for Q2. First, with inventory revisions factored, GDP less the inventory contribution was -1.03%; worse than last year’s polar vortex problem. It was the worst quarterly result since the Great Recession, which more than suggests economic weakness as more than just winter or seasonal adjustments….

201505.29
3
0

From Money to Psychology, Japan Reveals The Basis of Corruption

At some point in the middle of the last century, economics of money shifted to economics of psychology. When Milton Friedman wrote his 1963 book, A Monetary History, it was an effort that uncovered the role of money in the collapse of the Great Depression as he and his co-author, Anna Schwartz, saw it. Whether…

201505.28
2
0

Not My Euphoria

In its 84th Annual Report released last June, the Bank for International Settlements departed from usual central bankish conventions and decried the growing departure from market discipline and even reality. The BIS even used the loaded term “euphoric” to describe what it saw as risk market prices no longer affected by fundamental economic conditions. As…

201505.28
8
0

Trying To Make Sense Upside Down

Yesterday I looked at funding markets and currency proxies for detecting the end to the “dollar” pause that began on March 18. Broader credit markets agree with that assessment so far, as nominal yields and the UST curve shape have started, at least, to be redrawn back into the tightening format. Nominal yields and inflation…

201505.27
2
0

Rather Than All Efforts Aimed At Making Central Banks More Efficient

Leave it to a self-described socialist to undermine his own argument. Decrying the apparent overabundance of personal hygiene and fashion, presidential candidate Bernie Sanders took to confounding as to how many ways evil capitalism could produce odor-altering products but leave so many so hungry. You don’t necessarily need a choice of 23 underarm spray deodorants…

201505.27
6
0

Further Testing ‘They Don’t Know What They Are Doing’

When looking toward what might be coming next from the FOMC, the reigning theme remains “they don’t know what they are doing.”  That sentiment applies, of course, retroactively to all the QE’s, Twists and badly implemented emergency measures on the way down, but attention is rightfully focused now on how to get to C.  Going…

201505.27
5
0

‘Dollar’ Reversal Gains

Nobody really knows what is going to happen as Greece disproves all the narratives about the ECB’s ability to actually fix anything. As with all things monetarism, the attempts of liquidity were really about time rather than dissuading imbalances. But the funny thing about trying to buy time is that it so often removes the…

201505.26
1
0

Zero-sum Real Estate?

Recent real estate figures for new home sales and existing home sales do not seem to agree on where the real estate market is trending. The new home sales numbers from the Census Bureau have been moving upward since the middle of last year (with potential revisions in mind) while resale levels from the National…

201505.26
3
0

The Smaller Economy Getting Smaller Still

Durable goods orders declined for the third consecutive month in April, meaning with January’s flat reading that new orders for this important segment of consumer “demand” has been consistently shrinking in all of 2015 so far. New orders for capital goods have been negative year-over-year in all four months. With the pace of shipments just…

201505.26
9
0

Two Years Later: Gold Was Right About The ‘Dollar’ As Economists Should Have Been Far Less Giddy About It All

A little over two years ago, in the middle of April 2013, there was a gold crash that came seemingly out of nowhere. Worse, for gold investors anyway, that crash was repeated just a few months later. Where gold had stood just shy of $1,800 an ounce at the start of QE3, those cascades had…

201505.25
8
0

The Pretense Of Knowledge

If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will…