The function of recession is not just some negative numbers that appear from seemingly nowhere, though that is how convention sees it of “unforeseeable” trends and “shocks. It may take the NBER years in some cases to declare, officially, a cycle peak but that doesn’t mean there aren’t warning signs much closer to the event. Among them is, again, not [...]
It is easy to get carried away with modern finance, diving into the immense flourishing of finance that has taken place. Conceptions have become far more complex, sometimes unnecessarily so, leading to impairments in distinguishing forest and trees. In credit markets, we focus narrowly on spreads and curves because that is where the “action” seemingly takes place. That leaves observation [...]
There seems to be perhaps more than a little too much notice about Friday’s jobs report finally regaining the prior peak. In some places, largely political in nature, it has been cause for celebration as if it is some reckoning akin to an actual recovery. That might be true in a vacuum, but compounding in economics is more than just [...]
Whether it has been the American version or that pioneered by the Bank of Japan, QE is first and foremost an experiment in psychological manipulation. All central banks derive most of their “authority” from moral suasion, that old textbook “axiom” of getting market participants to act in the manner in which you only threaten. QE is different in that it [...]
Coincident to the relatively boring retail sales report, the Census Bureau estimated declining trade fortunes across the whole goods supply chain. In the seasonally adjusted data, total trade sales fell 0.1% in April after declining 1.2% in March. Compared to April 2012, total sales were up only 1.5% (meaning they declined on a real basis). Most of the April decline [...]
When I mentioned that Greenspan’s market has persisted long after his words fell from memory, that extended to overextended stock investors as well. By almost any measure, Ben Bernanke has outdone the “record” of his predecessor, yet he has so few quotable lines outside of those really bad predictions during the runup to the 2008 panic. Greenspan will be forever [...]
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