201805.17
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Term Bubble Premiums

Since nobody can seem to agree on what is an asset bubble, it’s that much more difficult to try and estimate its end. A bubble stops being a bubble only when the people participating decide to question the rationalizations they’ve invented to keep them complacently inside of it. It’s most often just that vague sense…

201804.25
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Moving Past The Oily Path of Least Resistance?

On April 6, the Trump administration announced a new round of sanctions imposed upon certain Russian officials, persons, and businesses. Treasury Secretary Steve Mnuchin announced their purported purpose in a letter: “The Russian government operates for the disproportionate benefit of oligarchs and government elites.” Russia’s currency, the ruble (RUB), fell sharply after the announcement as…

201804.11
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Inflation Hysteria Takes Another Big Hit

As it turns out, those “transitory” inflation factors were worth only about 25 bps on the core CPI rate. This isn’t at all surprising and was as usual entirely predictable. But when you don’t have any answers there is a lamentable tendency toward denial or deliberate evasion, even if that leads toward the ridiculous. Base…

201804.06
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Payroll Time

Never get hung up on one payroll report, good or bad. The Establishment Survey series, seasonally-adjusted and statistically smoothed as much as humanly possible, is still incredibly noisy. It didn’t used to be this way, which is an important clue that “something” has changed. The lack of consistency in the monthly measurement is as the…

201803.21
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No Hawks Nor Doves, Just Dollar

On January 24, Treasury Secretary Steve Mnuchin either misspoke or let slip a Freudian sort of wish. Extolling a weak rather than strong dollar, it was seemingly a total break from longstanding official US policy. It’s not really a policy anyone takes too seriously, if for no other reason than the dollar isn’t really a…

201803.20
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The Blind Interviewing The Blind; Or, Bubble Time

At the end of last month, the Brookings Institute hosted a conversation where one of their most distinguished current scholars introduced and interviewed one of their newest. The former was former Federal Reserve Chairman Ben Bernanke welcoming the latter, former Federal Reserve Chairman Janet Yellen. Listening to them talk was a total delight (thanks T….

201803.07
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Really Looking For Inflation, Part 2

Continued from Part 1 What these unusually weak productivity estimates lean toward is, quite simply, the possibility the BLS has been overstating jobs gains for years. In early 2018, there is already the hint of just that problem in a 4.1% unemployment that doesn’t lead to any acceleration in wages and labor income. What it…

201803.07
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Really Looking For Inflation, Part 1

Most people have been looking at Jerome Powell’s Chairmanship of the Federal Reserve as continuity, a comprehensive extension of Janet Yellen’s (and therefore Bernanke’s). This would by nature include all the nasty habits Chairman Yellen had picked up during her one term. At the top of that list is the word “transitory”, particularly how it…

201802.27
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Does It Always Have To Begin In Farce?

Imagine you live in a terrific neighborhood backed right up to a large wilderness. This heavily forested area has inside of it grown up a tremendous amount of underbrush. The local government, concerned for your property as well as those of your neighbors, starts making noises about taking care of the land before it dries…

201802.23
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Is It Ever Different This Time?

As my colleague Joe Calhoun likes to point out, nothing is new, everything has happened before. We like to think that’s not the case, as the saying goes every generation thinks it has invented sex. What changes is the form, the format largely remains the same. Human beings in 2018 are the same as they…