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As Predictable Transitory ‘Inflation’, Predictably The Fed’s Taper Is (truly) Something Else

By |2021-10-29T17:29:44-04:00October 29th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In a very real sense, neither the current rate of PCE Deflator “inflation” nor any more expected to be added by the reported LABOR SHORTAGE!!! are what’s pushing the Federal Reserve toward its next taper error. The Fed doesn’t do money, so that’s not an option for them by which to set policy parameters. All that’s left, then, is “expectations.”Jay [...]

No Inflation Without Income; There’s No Income

By |2021-10-01T19:57:46-04:00October 1st, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Money, economy, income. Those are the three ingredients that make textbook inflation and keep it together. Money flowing naturally through the economy turns into organic income which if out of balance with the rest of the macro factors can create broad-based and sustained consumer price increases. If actually caused by the combination of those three, the result would be the [...]

Weekly Market Pulse: The Illusion of Control

By |2021-08-30T07:47:06-04:00August 29th, 2021|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Stocks, Taxes/Fiscal Policy|

Jerome Powell delivered his long-anticipated speech at Jackson Hole last week. Well actually, I have no idea if he was actually in Jackson Hole since the speech was delivered electronically, another victim of the delta variant. The virus itself rated barely a mention in Mr. Powell's remarks and I think that is probably as it should be. There has been [...]

Inflation Estimates (PCE) *Totally* Overshadowed By Benchmark Income Revisions, And The (Deflationary) Implications of Them

By |2021-07-30T17:37:30-04:00July 30th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Of course inflation numbers, the PCE Deflators for June 2021, but first in the same report as those the BEA also released its various data on income and spending. In the former category, income, we’ll find a big reason why this deviation for consumer prices most likely ends up as temporary. And before we can get to that, big benchmark [...]

Inflation Isn’t Just The Outlier, The Inflation In It Is, Too

By |2021-06-28T16:30:15-04:00June 28th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Following the same recent pattern as the BLS and its CPI, the Bureau of Economic Analysis’s (BEA) PCE Deflator ran up hotter in May 2021 than its already high increase during April. The latter’s headline consumer basket rose 3.91% year-over-year, its fastest pace since August 2008. The core rate, which excludes food and energy prices, accelerated to 3.39% from 3.11%, [...]

Weekly Market Pulse: The Crypto Distraction

By |2021-05-24T07:28:03-04:00May 23rd, 2021|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Markets, Real Estate, Stocks|

It was hard not to hear about cryptocurrencies last week what with the bear market and all. Actually, you can make the case that bitcoin has had two bear markets since mid-April. There was a 27% decline followed by a 27% rally, followed by last week's rout. From its intraday peak in April to its intraday low last week, bitcoin [...]

Weekly Market Pulse: Have We Reached Peak Speculation?

By |2021-05-03T07:18:05-04:00May 2nd, 2021|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Markets, Real Estate, Stocks|

Last week I was contacted by two clients seeking information about cryptocurrencies. One was my godson, 12 years old and just getting started in investing. So far, he's bought Nintendo and Roblox (the latter against my recommendation but what do I know about video games?). But last week he said he wants to buy a cryptocurrency. He first mentioned Dogecoin [...]

Data Downgrading Uncle Sam’s Helicopter

By |2021-03-26T17:37:31-04:00March 26th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is, or at least can be, value in treating economic variables in the way econometrics does for the purposes of understanding generalized behavior. The problem for Economists, these statisticians, is that they’ve turned stylized lessons drawn from regression analysis into literal rules defining their worldview. By 1957, Milton Friedman had already been busy publicizing just those. Positive Economics was [...]

Uncle Sam Bribes His Way Into Goldilocks’ Not-yet Thirsty Bears

By |2021-02-26T17:50:54-05:00February 26th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to the Federal Reserve’s preferred inflation measure, the PCE Deflator, consumer price pressures remained muted in January 2021. No surprise, given the absence of inflationary conditions contained within the prior released CPI report for the same month, as even the contribution from surging oil prices was noticeably minimal in both. The Bureau of Economic Analysis (BEA) today said that [...]

Permanent Magic Number Hypothesis

By |2021-01-29T19:29:29-05:00January 29th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Is there a charmed fiscal number that unlocks the inflationary promised-land? Central bank Economists have spent more than a decade in the West, two in Japan, desperately seeking the magic number QE. Though their own research is substantial and conclusive that LSAP’s like QE don’t work, and never have, officials conclude instead that it always comes up short because it [...]

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