You’ll have to forgive the Chinese if they view “global turmoil” as something far more than an esoteric financial concept to be debated by irrelevant monetary committees. US imports from China fell 4.3% year-over-year in May 2016, the third consecutive contraction and seventh out of the last eight months. With February’s 16% gain more a calendar/holiday illusion, especially since it [...]
Factory orders declined slightly year-over-year in May 2016, the 18th contraction in the past nineteen months (the only positive was February and its 29th day). On a seasonally adjusted basis, factory orders fell 1% month-over-month to $455 billion. That was less than the $462 billion for March 2011 back when the end of QE2 was a topic for discussion, before [...]
So the FOMC voted against another rate hike yesterday, which in itself deserves no comment. Not even Esther George could muster a dissent as she has done nine of the previous eleven times. Notably the last time Ms. George voted with the all the rest of the committee against the symbolic raising of the irrelevant federal funds rate was the [...]
It makes for yet another huge dichotomy, but one which is curiously absent from any mainstream commentary. As noted earlier today, Chinese imports were pleasantly surprising for the mainstream as they were just about flat year-over-year. The fact that oil imports surged by nearly 40% seemed only to confirm that whatever might be happening on the export side (another dichotomy [...]
Chinese imports fell for the 19th consecutive month in May, but it was the pace of the latest decline that has stirred (yet again) so much optimism. Year-over-year, Chinese imports were down just 0.4%, beating expectations for a 6% drop. From that, as you can guess, the media is awash in commentary that “stimulus” is working, meaning the recovery is [...]
Last week, Japan reported GDP growth of 1.7% in Q1. That was much better than expected and led to all the usual extrapolations about how bright the future is in Japan now that QQE is working (and NIRP since that was started during the quarter). In this devalued economic world of central banking for the sake of central banking, context [...]
It is absolutely clear that the eurodollar system last functioned on August 8, 2007. Starting August 9, nothing would ever be the same. In describing and detailing how it got that way (the sudden fragmentation between “dollars” in NYC and London, for example) there is a natural tendency to compartmentalize even realizing the drastic implications of what it all meant. [...]
Throughout 2014 and even into 2015, the word “decoupling” was resurrected to try to calm growing unease about the direction of global growth. It’s first broad usage was during the first part of the Great Recession, as economists were sure that emerging markets then would be able to weather the “slowdown” of 2008 believed at that time confined to the [...]
When commenting on any weakness in the US economy, it has become common even shorthand for any outlet or author to affix the conventional explanation. Suspiciously low growth rates and far too many outright contractions, especially in manufacturing and industry, are blamed on overseas weakness and the dollar as if absent that foreign interference all would be sailing along right [...]
The focus on China and the Chinese economy is not just related to its size but more so the fact that it is the pivot point for the whole global system. In pure economic terms, as “end demand” from the developed world economies slows, the Chinese economy either absorbs that reduction (through its own internal “stimulus”) or passes it on [...]
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