china

TIC For July 2018: June Was Even Bigger Than We Thought, Meaning May 29

By |2018-09-18T17:33:50+00:00September 18th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You never quite know what you’re going to get with each monthly update. High frequency data tends to be noisy anyway, more so in the more exotic series. Following a month where something really changes, however, you aren’t quite sure if it will turn out to be nothing more than a phantom. Does last month’s [...]

Rebalancing China’s Rebalancing

By |2018-09-14T13:11:22+00:00September 14th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s no longer possible to know what state Chinese industry may be in. This is no small matter. Industrial production in China is the bedrock of economic growth throughout the rest of the world. Without it, there really isn’t anything left to do but struggle. And since industry’s performance there is predicated on demand in [...]

A Long Dollar Story: China’s Short Profits, Prices, and Producers

By |2018-09-10T16:59:18+00:00September 10th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For the first half of the Great “Recession”, China and the rest of the EM world seemed immune. It was American subprime mortgages that we were told was causing all the problems, and if European banks had somehow gotten themselves entangled in the rotten real estate mess so much the better for where growth was [...]

One Fragile Year In Review: It Was A Warning

By |2018-09-05T17:46:54+00:00September 5th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One year ago today, something broke. It wasn't a big thing, practically a footnote seemingly not worth mainstream attention. Out of nowhere, the 4-week T-bill yield spiked. On Friday, September 1, 2017, the equivalent interest rate for the instrument was steady at 96 bps. That was already a problem because the Federal Reserve’s RRP was [...]

More Dominos

By |2018-09-05T12:54:45+00:00September 5th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You get the impression often that these guys have no idea what drives the dollar. They cling to all sorts of theories, of course, from interest rate differentials to perceptions of economic strength. That seemed to be the case in 2017 and its “weak dollar” environment. Globally synchronized growth would mean potency pretty much everywhere, [...]

Downside Not Upside Global Risk

By |2018-08-28T18:59:35+00:00August 28th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The UST yield curve continues to flatten (as it does elsewhere). All sorts of mainstream articles have been published lately about it. Many of them often refer to academic pieces ostensibly trying assuage all fears about the yield curve’s threatening inversion. Fret not the distortion, they say. And they are right. As I constantly remind [...]

When Central Banks DON’T Print

By |2018-08-17T11:41:30+00:00August 17th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We all know, or we think we do, what happens when central banks print money. There are any number of historical images from which we can refresh our collective memory. Weimar Germany usually comes to mind, as does Venezuela or Zimbabwe in recent times. But what about the opposite? It sounds absurd. No government officials [...]

Ugly China’s American Mirror

By |2018-08-14T11:46:26+00:00August 14th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Yesterday, we spotlighted Brazil’s economy as perhaps a leading indicator for where things stand. Today, it’s China’s turn. Neither are very encouraging. Both offer instead only growing concern. The reason isn’t just the possibility of the world economy rolling over in 2018, rather it’s from what level any deceleration might have begun. Despite the characterization [...]

Unwelcome August

By |2018-08-13T16:58:51+00:00August 13th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy|

There is just something about August. It is irresistible, apparently, in all the wrong ways. For starters, there are big ones and small ones but somehow they all line up against liquidity and plentiful eurodollar money. In the former class there was, of course, August 9, 2007, August 9, 2011, and August 10, 2015. Even [...]

The Smoke Thickens In China

By |2018-08-13T11:54:23+00:00August 13th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A major part of any yield curve is inflation expectations. Nominal growth particularly toward the longer end of curves sets the agenda for trading. But further out there are several confluences that may cause distortions. For Economists, these are conundrums. There are times, however, when curve dynamics remain pretty simple. These are not usually the [...]