economy

For All That Seems To Go Right, What’s Always Missing?

By |2018-01-22T19:33:34-05:00January 22nd, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On April 29, 2011, the US benchmark oil price (WTI) surged above $113 per barrel. It wasn’t just American oil prices, either, as other benchmarks around the world were on a huge run. It was the highest for crude oil in three years, going back to the weeks immediately following Lehman. At that price, more so the parabolic trajectory, it [...]

Hopefully Not Another Three Years

By |2017-05-11T16:55:36-04:00May 11th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The stock market has its earnings season, the regular quarterly reports of all the companies that have publicly traded stocks. In economic accounts, there is something similar though it only happens once a year. It is benchmark revision season, and it has been brought to a few important accounts already. Given that this is a backward looking exercise, that this [...]

Why Aren’t Oil Prices $50 Ahead?

By |2017-02-17T18:00:08-05:00February 17th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Right now there are two conventional propositions behind the “reflation” trade, and in many ways both are highly related if not fully intertwined. The first is that interest rates have nowhere to go but up. The Fed is raising rates again and seems more confident in doing more this year than it wanted to last year. With nominal rates already [...]

Figuring Home Resales

By |2016-10-20T17:20:19-04:00October 20th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Home resales rebounded in September according to the National Association of Realtors (NAR) from an admittedly lackluster summer. Outside of that narrow view of just the past three months, resales, however, really haven’t grown at all going back to last summer. Year-over-year, sales were down 1.8% in July, up just 0.2% in August, and only 0.6% in September. Like Ford’s [...]

Standards For Interpretation And Analysis Matter A Great Deal

By |2016-10-07T17:36:08-04:00October 7th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

After falling by nearly 7% year-over-year in July, the third worst drop since 2009, wholesale sales expanded by nearly 7% in August, the highest gain in almost two years. As with factory orders, however, there are seasonal effects to consider given these are unadjusted comparisons. Blended together, cumulatively wholesale sales for both July and August were down about 1%. Seasonally-adjusted, [...]

A Realistic Decomposition Of Rates, Or At Least A Realistic Interpretation Of It

By |2016-09-28T13:10:03-04:00September 28th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Last April, former Fed Chairman Ben Bernanke wrote a series of blog posts for Brookings that was intended to explain one of the biggest contradictions of his legacy. If quantitative easing had actually worked as he to this day suggests that it did, why wasn’t the bond market in clear agreement? In order to try to reconcile the huge discrepancy, [...]

No Need For Yield Curve Inversion, There Is Already Much Worse Indicated

By |2016-09-27T16:39:41-04:00September 27th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Though I highly doubt he will admit it, he’s just not the type, even Ben Bernanke knows on some level that bond market is decidedly against him, or at least his legacy. Economists have a funny way of looking at bonds, decomposing interest rates into Fisherian strata. To monetary policy, interest rates break down into three parts: expected inflation over [...]

…And The Treasury Market Is Trying Very Hard To Kill The Legend

By |2016-09-23T15:20:31-04:00September 23rd, 2016|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As noted earlier today, the bond market is not truly a mystery or middle. In very simple terms that even Alan Greenspan might be able to understand, rising inflation and economic opportunity are reflected in higher interest rates and a steeper yield curve; full stop. The bond market, however, does not possess a crystal ball and thus must rely on [...]

We Are Stuck In Depression Until The Legend Of The ‘Maestro’ Finally Dies

By |2016-09-23T11:38:31-04:00September 23rd, 2016|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Alan Greenspan is confused - again. The man who admitted to the world a decade ago he didn’t know much if anything about interest rates is now trying to change that reputation by suggesting yet again interest rates are set to rise. In testimony before Congress in February 2005, the then-Chairman of the Federal Reserve actually said: For the moment, [...]

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