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output gap

The Big One, The Smoking Gun

By |2019-11-26T15:02:25-05:00November 26th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It wasn’t just the unemployment rate which was one of the key reasons why Economists and central bankers (redundant) felt confident enough to inspire 2017’s inflation hysteria. There was actually another piece to it, a bigger piece potentially complimentary and corroborative bit of conjecture. I write “conjecture” because despite how all this is presented in the media there’s very little [...]

Housing Slump Within A Slump

By |2018-08-22T12:13:28-04:00August 22nd, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

July 2018 was another disappointing month in the housing market. Sales of existing homes, according to the National Association of Realtors (NAR), declined again last month. At a seasonally-adjusted annual rate of 5.34 million, it was the lowest level of resales in two years. Apart from the distortions last year in the aftermath of the big Gulf Coast storms, the [...]

Pure Corruption

By |2018-08-14T16:33:05-04:00August 14th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In December 1999, Princeton Professor Ben S. Bernanke wrote a relatively obscure paper largely denouncing the Bank of Japan’s shyness. Japan’s economy had by then been mired in its first Lost Decade, one which at that moment not everyone was sure should have been lost. It was fashionable at the time to pile on the BoJ. Dr. Bernanke argued for [...]

The Boom Takes Another Big Hit

By |2018-04-10T18:49:21-04:00April 10th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Congressional Budget Act of 1974 requires the Congressional Budget Office (CBO) to produce and release its economic projections and assumptions every year. Typically, the CBO does so under initial assumptions each January. Those estimates are then revised, if necessary, later in the year with more complete information. This past January, however, the release was delayed. As anxious as most [...]

Expectations and Acceptance of Potential

By |2017-09-15T17:46:30-04:00September 15th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The University of Michigan reports that consumer confidence in September slipped a little from August. Their Index of Consumer Sentiment registered 95.3 in the latest month, down from 96.8 in the prior one. Both of those readings are in line with confidence estimates going back to early 2014 when consumer sentiment supposedly surged. During that same period, however, consumer spending [...]

Of Rules And Slack, And The Real Rule of Slack

By |2017-09-06T17:49:53-04:00September 6th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In 1993, Stanford economist John B. Taylor wrote an influential paper that introduced the economics profession (statisticians, almost all) to what was later called the Taylor Rule. The need for such a “rule” was an unspoken outgrowth of monetary evolution. In the 1960’s and 1970’s long-established regression models estimating the influence of then-defined money on economic variables had broken down [...]

JPY Joins EDM; End of Week Chart Dump

By |2017-08-11T19:12:17-04:00August 11th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Brexit, Trump’s election, even the Bank of Japan rumored to be thinking helicopter. Last year was the year of thinking differently and therein was hope. No matter how many times some markets and especially media blindly accepted the “stimulus” or “recovery” judgments of economists over the years, by 2016 and the near-recession globally that accompanied a “rising dollar” that nobody [...]

Just Not Down As Much

By |2017-05-10T16:31:37-04:00May 10th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It is one of those things that will never be stated outright, nor does there exist the kind of unassailable proof that would convict in any legal sense. Regardless, monetary officials here and elsewhere are clearly trying to have it both ways. They know very well what is driving inflation rates upward of late, and it isn’t monetary policy success. [...]

Defining Labor Economics

By |2017-04-25T18:02:34-04:00April 25th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Economics is a pretty simple framework of understanding, at least in the small “e” sense. The big problem with Economics, capital “E”, is that the study is dedicated to other things beyond the economy. In the 21st century, it has become almost exclusive to those extraneous errands. It has morphed into a discipline dedicated to statistical regression of what relates [...]

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