More US bank respondents reported to the Federal Reserve that they are seeing weaker demand for Commercial & Industrial Loans than at any time since the end of the Great “Recession.” The Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) asks respondents to gauge certain factors with regard to various forms of lending. In terms of new debt [...]
If there is one thing Ben Bernanke got right, it was this. In 2009 during the worst of the worst monetary crisis in four generations, the Federal Reserve’s Chairman was asked in front of Congress if we all should be worried about zombies. Senator Bob Corker wasn’t talking about the literal undead, rather a scenario much like Japan where the [...]
If Brazilian central bankers are the standard for illicit shamelessness, their European counterparts are at least on the same spectrum. At the end of April, the European Central Bank’s President Mario Draghi took his shot at purposeful mischaracterization. Speaking to the press after the ECB’s Governing Council meeting had concluded, Draghi had been forced to concede there had been at [...]
Early in the morning on October 7, 2016, during Asian trading the British pound experienced a flash crash. Driven down 6.1% in a matter of two minutes, it left the rest of the markets stunned. The usual whispers of a “fat finger” abounded, as did the recognition of how unabated computer traded sell orders were quickly offered and executed. Just [...]
Effective June 10, 2014, the European Central Bank cut the interest rate it paid on its deposit account to less than zero. That instrument in forming the floor for what is a money market corridor in European policy, it was the world’s first major NIRP experiment. Europe’s economy had by GDP been growing again for three straight quarters by then [...]
You find lots of tortured arguments about the state of the economy, largely because the premise starts with the boom and then seeks to find it. If it isn’t currently visible in the data, there is unusual and unearned confidence that the data will have to change in the near future (rather than the past three times we’ve been through [...]
American central bankers and economists aren’t alone in their Phillips Curve nightmare. They are joined by others practically everywhere else around the world. In Europe, for example, the unemployment rate there continues to fall while inflation keeps on misbehaving in its meandering. Unlike the US, however, the Europeans don’t have the luxury of burying millions of prospective workers in other [...]
Everyone is now a euro watcher. The European common currency’s exchange value against the dollar has been on the rise, to put it mildly. Despite decades of declaring floating currencies the optimal framework, it really is quite entertaining to watch the furor when these things actually float one way or the other. This recent trend has been attributed to the [...]
This week the Bureau of Economic Analysis will release updated estimates for Q2 GDP as well as Personal Consumption Expenditures (PCE) and Personal Incomes for July. Accompanying those latter two accounts is the currently preferred inflation standard for the US economy. The PCE Deflator finally hit 2% and in two consecutive months, after revisions, earlier this year. The inability of [...]
When the Mario Draghi as head of the ECB first introduced negative rates in early June 2014, his reasoning was very clear. As he said in the opening of his statement imposing NIRP on Europe, “Today, we decided on a combination of measures to provide additional monetary policy accommodation and to support lending to the real economy.” The way in [...]
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