201502.26
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CPI Really Didn’t Cooperate

Say what you want about the CPI as it relates to inflation, the actual calculation is set up to measure essentially what GDP measures. That is why economists take their calculations of “inflation” as almost literal substitutes for actual economic activity. There is little denying the close correlation between economic activity especially in recession and…

201502.26
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Durable Goods Won’t Cooperate Either

Yesterday in trying describe Janet Yellen’s testimony to Congress about the economy, pundits apparently were forced to concede that the “data won’t cooperate”, thus leaving the economy in Yellen’s head to be wholly different than anything described elsewhere outside the media echoes. Today’s release of durable goods provides yet another data point that “will not…

201502.26
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New Home Sales Confirm Resales; New Home Prices Confirm Bubble

The pace of new home sales continues to be stuck right below that 500k SAAR, a flattening of activity that dates back really to January 2013. The data has at times peaked above 500k only to be revised subsequently lower, which does not provide a whole lot of confidence about recent months. January’s level was…

201502.25
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Yellen Can’t Get Cooperation

Janet Yellen’s testimony concluded, no one gets any more clarity about what the FOMC actually thinks. However, that itself is in one sense an indication as she vacillated a little too much about making a firm commitment to either the recovery or “transitory” oil prices. QE3 ended months ago and we are seven years into…

201502.25
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Regulations Are Bad Enough, But QE May Have Been So Much Worse

Along with the new Basel-y rules to be adopted for the banking system, there are other major changes that have remapped at least domestic finance since 2007. A big part of this pertains to the systemic liquidity capacity that I emphasize repeatedly, but in the sense that it is far more and different than just…

201502.25
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New Bank Rules Will Accomplish The Same As The Old Bank Rules

There has been an exodus of sorts of mathematical expertise out of ratings agencies and into the biggest banks themselves. That may not sound like much of a change, after all it was Wall Street that hired the most Ivy League mathematicians during the last bubbles of the 1990’s and 2000’s, but the talent being…

201502.24
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Next Step In ‘Dollars’?

I continue to believe that the Swiss National Bank’s action on January 15 opened a “release valve” of sorts inside the world of the global “dollar.” Prior to that day, heightened bearishness all throughout dollar-denominated credit dominated trading. That included funding markets, especially eurodollars. The eurodollar curve itself ignored almost everything else, including the FOMC…

201502.24
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This Is All Science, You See

There are any number of colloquialisms for monetary repression, “reach for yield” and serial asset bubbles being a few. In the vernacular of monetary policy itself, such color is disdained in favor of technocratic banality – “portfolio effects.” The idea is simple, which is to say that by repressing the returns on “safe” investments financial…

201502.24
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When The Sellers Go

For almost a year now, even before 2014’s version of winter, the constant theme has been one of growing and robust jobs. It had become so ubiquitous as to infiltrate every economic data point, including the housing market. There was some correlation last year between the sentiment about payroll expansion and at least a tepid…

201502.22
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A Closer Look: Commodities

The GSCI Commodity Index ((GSG)) consists primarily of Energy, but also includes Agriculture, Industrial Metals, Livestock, and Precious Metals as part of its holdings. The index broke down during the month of July on the backs of a stronger US Dollar and Saudia Arabia’s strategic decision to hold production levels. It now finds itself just…

201502.22
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A New Secular Bull Market?

There is an ongoing debate about the character of the current bull market in US stocks. There is a contingent that believes that this is a new secular bull market, one that is driven by factors that will last many years or decades. The counter to that is that this is merely a cyclical bull…

201502.20
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The Drowning of Innovation As A Mathematical Inequality

Economics as a discipline has always fancied itself more of a hard science than a social science. That is why economists like to talk like physicists as if there is surety in the figures they use so publicly. It has even infected media coverage of economics, as the nomenclature about economists’ predictions has taken on…