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End All The Myths; They’re Almost Done Anyway

By |2016-07-06T18:52:45-04:00July 6th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Nominal disposable income in Japan fell 4.4% year-over-year in May 2016. In what can only be a sign of the times being far too familiar in Japanese, real disposable income was thus slightly better at “only” -3.9%. For all the hundreds of trillions in new Japanese bank reserves provided by so many QE’s I have lost count, “real” in Japan [...]

No Help To The Global Economy From US ‘Demand’

By |2016-07-06T12:37:13-04:00July 6th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

Back To Our Regularly Scheduled Programming (UPDATED)

By |2016-06-24T18:21:55-04:00June 24th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It was a nice diversion while it lasted, I suppose. From the moment of the unfortunate murder of the British MP, funding markets, in particular, had been furiously “selling dollars” to get back some of the pound that was falling as Brexit had gained momentum. Media commentary talks about it as if that were the whole topic – it never [...]

Always More

By |2016-06-21T17:33:19-04:00June 21st, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

For decades the slander against Herbert Hoover went unchallenged. He was branded a “do nothing” in the 1932 campaign, a charge which looks sillier the more time passes. The proper slander of Hoover is that he was Roosevelt before FDR was, only in miniature. From this view we can appreciate the intentional change in perspective; Hoover’s interventions failed to stop [...]

Uncomfortably Familiar

By |2016-06-16T18:10:12-04:00June 16th, 2016|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This is all starting to look very familiar and predictably so: Especially this: It is utterly extraordinary that the June 2023 eurodollar futures contract closed trading at 98.00, much less than on February 11 and a collapse of more than 150 bps in anticipated 3M LIBOR seven years in the future just since last July. It is, again, entirely anticipated given the [...]

Re-evaluating ‘Stimulus’ By Market Force

By |2016-06-10T12:32:26-04:00June 10th, 2016|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On July 2, 2015, the 10-year Japanese Government Bond (JGB) traded to a stout closing yield of 0.511%. That was up significantly, in Japanese financial terms, from the start to the year where the benchmark bond yield had tumbled to as low as 0.206% supposedly in the aftermath of QQE expansion. The Bank of Japan had added to its already-disgusting [...]

China Says ‘Thank You’

By |2016-06-03T17:25:40-04:00June 3rd, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

By any reasonable standard, today’s trading in “dollars” was highly unusual. The Chinese yuan had been trading its typical depreciation route all through the night and toward the US open. At about 6:15am, CNY was just about to touch 6.59 and a new low that would have put it back into early January territory (not good). It traded modestly higher [...]

It’s Not Stupidity, It Is Apathy (For Now)

By |2016-05-31T18:42:34-04:00May 31st, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Ten days ago, it was reported that the Bank of Japan for the first time set aside reserves against expected losses should its massive portfolio of JGB’s finally move toward QQE success. The main part of all this “stimulus” has been the accumulation of primarily government bonds at massive premiums. If it were ever to actually work, then the Japanese [...]

The Mirage of Irregular GDP And How Economists Get Away With It

By |2016-05-23T13:14:00-04:00May 23rd, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

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