201504.24
1
0

Repo And Interbank Revelations

There was no third consecutive quarterly liquidity event on April 15, but I think there was an observation of the same systemic crack that just didn’t, this time, go anywhere. I have been highlighting repo rates particularly during April where GC rates failed to reset as they had done after every other quarterly window dressing….

201504.24
1
0

Another Drop in Durable Goods

There were a lot of references to the top-line durable goods figure, which was better at 4% in March, but surprisingly almost every piece of commentary was acquiescent to the very disappointing internals. If there was weather depression in the Q1 “slump” so far, it should have abated in March and kicked off an unmistakable…

201504.24
1
0

Old Fashioned In Europe

The theme this week has been one of killing currencies, or monetary genocide, as that seems to be reaching once-believed improbable levels of descent. While not specifically a self-contained series, the prior pieces, which are relevant to this discussion, are here, here and here. My intent so far as this angle is far more speculative,…

201504.23
3
0

Turns Out The ‘Rising Dollar’ Is Real

The purpose of trying to frame revenue and earnings as a figment of dollar calculations is, of course, to make it seem as if these are just numbers that have little meaning. The emphasis on “constant currency” terms is not just a means to alter the figures but the very meaning itself. As IBM has…

201504.22
6
0

Systemic Reset as QE Reset?

If there is a set of data points that should be most concerning and useful (in that regard) to policymakers they are certainly related to junk debt. You can throw away even the irregular nature of GDP and surely ignore the Establishment Survey and unemployment rate. Given that those statistics are at least captured by…

201504.22
2
0

It All Went So Quickly

It seems a very long way from here, but it was only December 23rd when the economy was taken as “booming.” That was the day that excited economists under direct confirmation, allegedly, that this time was different. The Commerce Department had reported Q3 GDP up to 5%, raising estimates for business investment and consumer spending….

201504.22
3
0

Potemkin on the Pacific

For the first time since June 2012 Japan has attained a trade surplus. It is, however, premature to interpret that as an end to the impoverishment the island has undertaken these past three years, the last two under QQE. There are various reasons for the end of the negative trade imbalance, but the most significant…

201504.22
5
0

‘Rationality’ Behind the Currency Genocide

I believe the phrase that is attaining Paul Krugman all these invitations to “consult” on economic failure is one that he has used pretty consistently for years. He says “deflationary vortex” and for a long while it was ignored as studious monetarists were busy inflating away; except that none of them, from the Fed to…

201504.21
3
0

Aiming Now At the ‘Dollar’

With the PBOC’s apparent schizophrenia on display it is unsurprising that there would be another default. I don’t find any coincidence between the timing of that announcement, in Hong Kong, and the fact that the PBOC both “tightened” and “loosened” in the past few days. They have been pretty consistent about that going back to…

201504.21
6
0

Currency Genocide Inward

Yesterday brought on an exposition on the death of currency, but it was only one dimension in that process. Owing to the orientation of monetary policy, especially under QE conditions, most attention is focused outward from short to long. The irreconcilably truth, as I put it, is that destroying time value amounts to depressing financial…

201504.20
1
0

China Literally Does It Again

The fact that China did something will always be treated with hyperventilation, but lately that includes an almost bi-polar nature. Last week, the PBOC branch in Shanghai made what looked to be a “tightening” gesture upon Chinese stocks, ordering commercial banks, in a memo, to check for risks in margin debt. They also banned margin…

201504.20
3
0

Currency Genocide; Or Let’s Kill It More

There is an irreconcilable tension that lies at the heart of every “extraordinary” monetary policy. It isn’t something that is talked about much, and in fact it is steadfastly avoided as if these were two distinct topics. Bringing them together amounts to “crossing the streams” (to use 1984-style metaphors) and tends to undermine the idea…