201409.17
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The Business of Movies Without Customers

The biggest thorn in the recovery narrative, or whatever it is that the FOMC claims is guiding its hand, is that consumers are not spending as they “should” under such circumstances. Retail sales not only have disappointed this year, bookended by “unexpected” weather on one and an as-yet excused position for the other, they are…

201409.17
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Dollar Shift Is Actually More Dramatic Than Appears

For the conspicuous lack of drama surrounding currencies in 2014 vs. 2013, there does not seem to be much by way of actual change. Perhaps the only real difference this year (through July) compared to last is how central banks are responding to what they perceive of dollar availability. It is entirely a different perspective…

201409.17
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There’s A Lot To Eonia and the ECB

The ECB turned to negative rates, at least as far their floor, back in June which was supposed to “force” banks to find a suitable alternative to liquid and safe. In orthodox terms this is called the “portfolio effect” as making low-risk contain an outward-facing cost should, as the theory goes, make financial participants shift…

201409.17
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QE’s Taper Reveals Liquidity Degradation

Since we are now in the middle of the final month of a quarter, checking repo stats shows what we have come to expect of a fragile liquidity system. Once again, repo fails spiked sharply in the latest weekly statistics from FRBNY as primary dealers and the Fed’s own repo “fix” fail to affect the…

201409.14
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A Closer Look: Market Cap

The S&P 500 Cap-Weighted Index ((IVV))  has been on a slow, stubborn march forward to the 2000 level for much of the year, but it seems as if the market has tired a bit in the last couple of weeks. If the index doesn’t bounce off the 50-day moving average this coming week, we might…

201409.14
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Good Times, Bad Times

The economic data has taken on a more positive tone recently, at least in some areas, and with an FOMC meeting and Janet Yellen press conference on the schedule this week, the bulls pulled in their horns last week. It seems that, for now anyway, good news is bad news for markets as any indication…

201409.12
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Flat Is Out Again, Though Sentiment May Not Be

For all the drama and activity of bearishness in August, curve steepening has been the primary influence in September. There haven’t been as many notable events that would easily and cleanly explain the sudden shift, other than peculiarities in the cash markets (including supply flow). In other words, I don’t think it much of a…

201409.12
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Praying to the God of ‘Global Growth’

Part of the tale being spun perpetually about the economy, any economy in this day and age, relies on nothing more than circularism. Because monetary policy is so captured by managing expectations, meaning that economists and policymakers will never be anything but positive about anything ever again, you end up with nonsense as a foundation…

201409.12
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August Was Concerning

The retail sales release for August was actually quite alarming. The track of sales pretty much confirms the end of the spring “bounce” that showed up in Gallup’s figures, but the real concern is that the “bounce” itself was never more than a minor adjustment; an absence of further erosion as it were. That is…

201409.11
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Danger As ‘Stimulus’

With the yen precipitating levels not seen since the very week Lehman collapsed and finally confirmed just how global the crisis was (and would remain), “markets” in Japan and everywhere have begun to “anticipate” (beg?) even more. The yen briefly touched (devalued) 107 to the US$, a remarkable run that threatens to even further upend…

201409.10
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Spending Flat to Lower, As Are Certain Indications of Consumer Confidence

Gallup’s daily spending tracking poll dipped slightly in August, but what matters most is that spending levels have been flat now going back more than a year. There is no insight provided as to why that has occurred, only that people at the bottom ends of the income spectrum are unwilling or, more likely, unable…

201409.10
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Apps and the End of Subsidy

With the main flow of housing data a few weeks off, there is more discouraging news in the area of housing finance. Despite the retracement of interest rates, the 30-year conventional fixed in particular, since last year’s dramatic rout has done absolutely nothing toward re-establishing volumes consistent with the interim mini-bubble of 2011-12. With every…