201608.24
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Home Sales Fall, But It’s Really The Inventory That Might Be Significant

The contradictory nature of the real estate market continues to be exhibited in resales as well as new construction. Though sales of new homes jumped, resales fell. Since last June, the level of contracts for the sale of existing homes has been stuck around 5.4 million SAAR. That was about the same rate of activity…

201608.24
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The Product of NIRP: Exposing Psuedo-Science

It wasn’t the introduction of statistics that led to the dire state of “science”, rather it was the jettison of common sense in favor of, and the total deference to, statistics. This was not a single event or a clean break, of course, as it happened slowly over decades. But in the 21st century what…

201608.23
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Liquidity Risk Is Very Real And Really Not That Hard To Spot And Define

Going back to Japan for a third time today (it is more than deserved), at least in the setup, the Financial Times on August 1 astutely picked up what the rest of the mainstream media missed about the last BoJ policy moves. They correctly judged the “dollar” intentions, but also that it wasn’t nearly enough, as…

201608.23
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The Oil of ‘Dollars’, Japanese ‘Dollars’

Starting June 8, oil prices began falling again, reversing their more optimistic trend that had lingered since February 11 long after the usual correlation to CNY was broken. In fact, by the time WTI had peaked, CNY was already being meddled with again in clear PBOC interference. Despite being backward to what was 2015’s relationship…

201608.23
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Clues to the Origins And Stubbornness of the ‘Rising Dollar’

On March 9, 2016, front month trading for Japanese government bond (JGB) futures was halted at 12:32 pm Tokyo time. Selling had become intense, tripping the Osaka Exchange’s dynamic circuit breaker. The total length of the halt was just 30 seconds, but fingers were already being pointed in the direction of the BoJ. More than…

201608.23
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Bi-Weekly Economic Review: The Big Picture

Economic Reports Scorecard If you want to understand the US economy based on one economic report, you could do a lot worse than the report on productivity released last week. This was the third quarter in a row that showed a decline in US productivity. That is, output was up (GDP was positive) but not…

201608.22
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Confused By The Slope: All The Answers Were There in 2012 China

The simple fact of the matter is that 2012 wasn’t supposed to happen. By every orthodox prediction and theory about the set of tools deployed after the Great Recession (after it, the first clue) there was no reason to suspect anything but the usual cyclical occurrences. Sure, the recovery would be weak because the recession…

201608.22
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Magic Number Theory Must Be Magic For All Sides

John Williams: Finally, monetary policy frameworks should be critically reevaluated to identify potential improvements in the context of a low r-star. Although targeting a low inflation rate generally has been successful at taming inflation in the past, it is not as well-suited for a low r-star era. There is simply not enough room for central…

201608.22
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The Inequality of Logic Behind The Increasingly Emphasized Magic Numbers

It is a basic element of logic that if A = B and B = C, then A must also equal C. In terms of action, if I do a thing and that thing always leads to a predictable outcome, not seeing that outcome causes one to question whether or not one actually did that…

201608.19
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MacroVoices Podcast for August 18, 2016

Jeffrey Snider: All Signs Point to Global Systemic Reset  

201608.19
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Some South American Chapters of the Ongoing ‘Dollar’ Epic

In April 2009, the new Obama administration created somewhat of a political controversy when it was originally reported by the Wall Street Journal that the US was providing $2 billion or more to fund offshore drilling – in Brazil. To many on the “right”, that seemed quite hypocritical given the public stance on all things…

201608.18
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The Fear Economy: It Couldn’t Possibly Happen Here But It Did

In the late 1990’s, economists attempted to get reacquainted with something that they previously believed was an artifact of long ago history. The plight of Japan during that decade had revived fears of deflation and depression. Some economists, those daring enough to challenge entrenched notions, began even to contemplate whether or not it could happen…