201607.12
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The Hope Trade Returns Though Severely Stunted As It Should Be

All it takes are the words “record high” and all economic or financial sins are forgiven and forgotten. The financial media cannot contain themselves whenever they get the chance to use the term, adding qualifications like “soar” and “sharply” to make sure everyone gets the message. Context need not apply because stocks are supposed to…

201512.06
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7 Macro-Drivers for Capital Markets in 2016

Global Growth Recession risks are low and growth should improve in 2016. Excess supply is especially apparent in the raw materials/commodities sectors. This state of overcapacity/supply and a strong dollar combined from 2014-2015 to create an environment of falling prices and sluggish growth in global manufacturing. The services sector continues to perform well. Continued expansion in the…

201504.30
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Crude Economics Looks To The Back End

So far, yesterday’s FOMC has not re-ignited the dreaded “rising dollar.” In fact, there hasn’t been much reaction at all as far as funding markets go. Even oil prices remain near their recent highs, with spot WTI as high as $59.40 so far this morning. That is, again, far more a reflection of this latest…

201502.15
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Macro Themes and Research Highlights

The US currency is strengthening in conjunction with the a strengthening US economy (proxied here by employment growth and surveys of businesses on hiring intentions and growth prospects). The last time we had this environment was in the 90’s. The combination of increased spending power accompanied by job growth could result in an empowered US consumer….

201501.06
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It Depends On Where You Start

It may be progress in some sense, but we have apparently shifted beyond the “unexpected” stages of the economy. Disappointing data, as with the crude oil collapse, is now being termed “temporary.” That was the case with almost all the data this week, including factory orders, all of which was disappointing and thus “temporary.” But…

201409.24
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TNT Attrition

There was a bit of a stir caused by Dutch logistics firm, TNT Express. The company has been expressing caution, if not downright pessimism about its prospects due to economic considerations. Today, it lowered its targets for growth, with the stock taking a beating in so doing. However, it is the manner of that downgrade…

201405.30
4
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Inflation As A Deeper Concept

The problem with talking about inflation, and there is a lot of it recently, is conflation. Modern measures and concepts about pricing mash together every kind and form to create something that doesn’t really mean what was intended. On the “up” side we have monetary debasement coupling with orthodox concepts of “pricing power” and thrown…

201405.30
1
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Economists v. Bonds

By now the bond market is really starting to annoy all the “right” people. The bear flattening that has taken place since operational taper commenced is a direct contradiction to those that implore dismissal of recent GDP (after pleading quite the opposite during the inventory build last year). Mainstream, orthodox economists have settled that Q1…

201404.24
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Durable Goods Patterns

All economics and finance can be dissolved and distilled into analysis of patterns. Whether that takes the form of a hardened, quantitative approach or something more toward the “eye of the beholder” depends on many factors. I find it useful to blend the two to find compliments and, perhaps more importantly, divergences. Oftentimes the real…

201403.26
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Confused Stasis

There was not much new to report in today’s durable goods estimates, consisting of largely the same we have seen since mid-2012. But that in and of itself is noteworthy, particularly as other indications point to similar patterns and analysis. In the past this has been called “scraping along the bottom”, but if recent history…