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Blatant Similarities

By |2017-05-01T18:36:47-04:00May 1st, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Declines in several of the world’s PMI’s in April have furthered doubts about the global “reflation.” But while many disappointed, some sharply, it isn’t just this one month that has sown them. In China, for example, both the manufacturing and non-manufacturing sentiment indices declined to 6-month lows. While that might be erased next month as normal short run volatility, the [...]

Still In So Many Ways 2014

By |2017-04-26T12:31:43-04:00April 26th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What was it that touched off CNY’s devaluation in the first place? When it started, “unexpectedly” of course, it was described as intentional policy designed to thwart speculators betting too heavily on the currency’s continued rise. But the first major move in the chess game between the PBOC and “whatever” it is driving the currency was to widen the daily [...]

‘Dollar’ ‘Improvement’

By |2017-04-24T19:44:18-04:00April 24th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to the headline TIC statistics, foreign central banks have in the past six months sold the fewest UST’s since the 6-month period ended November 2015. That may indicate an easing of “dollar” pressure in the private markets due to “reflation” sentiment. They are, however, still selling. In February 2017, the latest month available, the foreign official sector disposed of [...]

Big Difference Mechanical Tightening

By |2017-04-24T18:11:07-04:00April 24th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The mainstream narrative as it relates to Chinese money is “tightening.” Having survived the economic downturn last year, we are to believe that the PBOC is once again on bubble duty. They raised their reverse repo rates, considered to be their policy benchmarks, three times up to mid-March. The central bank also increased the rate on its Medium Term Lending [...]

To The Asian ‘Dollar’, And Then What?

By |2017-04-24T16:13:46-04:00April 24th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Bretton Woods system was intentionally set up to funnel monetary convertibility through official channels. The primary characteristic of any true gold standard is that any person who wishes can change paper claims into hard money. It was as much true in any one country as between those bound by the same legal framework (property). What might differ were the [...]

Assessing China’s Economic Risks

By |2017-04-17T19:25:05-04:00April 17th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

First quarter GDP in China rose 6.9%, better than expected and above the government’s target (6.5%) for 2017. It stands to reason, however, that if Communist officials thought they could get 6.9% to last for the whole year they would have made it their target, especially since 6.5% would be less than the GDP growth rate for 2016 (6.7%). In [...]

What Was Chinese Trade in March?

By |2017-04-13T16:52:34-04:00April 13th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As with all statistics, there are discrepancies that from time to time may obscure the meaning or validity of the particular estimate in question. For the vast majority of the time, any such uncertainties amount to very little. Overall, harmony among the major accounts reduces the signal noise from any one featuring a significant inconsistency. There are, of course, various [...]

February US Trade Disappoints

By |2017-04-04T11:56:33-04:00April 4th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The oversized base effects of oil prices could not in February 2017 push up overall US imports. The United States purchased, according to the Census Bureau, 71% more crude oil from global markets this February than in February 2016. In raw dollar terms, it was an increase of $7.3 billion year-over-year. Total imports, however, only gained $8.4 billion, meaning that [...]

The Basis For The Changing Basis

By |2017-03-28T12:13:18-04:00March 28th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It is simply the nature of modern Economics to get most things backward. Positive Economics particularly in the form of econometrics has been like a declaration of ignorance, where Economists have formally decided to try and understand as little as possible. If you know anything about statistics you know why, for the one thing that bogs down statistical equations and [...]

TIC Analysis of Selling

By |2017-03-24T16:38:30-04:00March 24th, 2017|Economy, Federal Reserve/Monetary Policy, Markets|

When the Treasury Department released its Treasury International Capital (TIC) data for December, what was a somewhat obscure report suddenly found mainstream attention. Private foreign investors had sold tens of billions in US securities primarily US Treasury bonds and notes which the media then made into some kind of warning to then-incoming President Trump. It was supposed to be a [...]

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