201412.19
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A Different Kind of Inversion

One of the most curious aspects of the FOMC’s apparent rush to end its “accommodation” is the distinct lack of any market-based reinforcement. Using only statistical analysis of economic accounts, the Fed is, in effect, saying that it is ignoring all market indications contrary to its main assessment. That extends not just to overall economic…

201412.16
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True To Its Word, PBOC Confuses Economists’ Bubble Expectations

It is really amazing how condensed events have become once the economic and financial world shifted off its axis in August 2007. What used to be conventional wisdom about monetary affairs before then has long since been forgotten to the point that “emergency” measures that appeared in the months thereafter now pass for “normal.” However,…

201412.12
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Global Credit Markets Have Proclaimed An End To The Recovery

The amount of credit market fireworks this week is only surpassed by those of October 15. Everywhere you look, credit markets are not just growing bearish but, as I said earlier in the week, bearish in comparison with past crisis periods. The past few days have surpassed even that observation, making credit now a fast-moving…

201412.12
6
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The Nature of Oil ‘Stimulus’ Is Strictly Imagined Math

It is amazing the speed at which FOMC officials have embraced not falling oil prices but collapsing crude. The pace of the decline is being driven, contrary to the fracking miracle, by the fact that nobody seems to want to bid on the stuff. That is, as I noted earlier, a demand problem. But officials…

201412.12
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Chinese Data Confirm PBOC ‘Reform’ And Related Rejection of US Recovery Idea

With Chinese industrial production in November “unexpectedly” weak, coming in at the second lowest rate since December 2008, Pavlov’s dogs are barking again much louder in the direction of the PBOC. It’s not as if this is a one-time dip in production levels, as the weakest growth rate was achieved only a few months ago…

201412.11
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Retail Sales Confirm Dark Black Friday

The initial indications from private retail metrics on the Black Friday kickoff were not good, though numerous attempts to downplay those results were initiated. The monthly retail sales figures from the Census Bureau will make that much harder as they square with the downbeat Black Friday estimates. In other words, Black Friday wasn’t “off” because…

201412.09
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No ‘Surprise’, PBOC Has Been Saying This All Along

For months now, really going back to the summer, the obvious decline in Chinese economic function has produced a resounding expectation that the PBOC would come to the rescue. It was taken axiomatically such was this Pavlovian reflex. Everything the PBOC did over the summer was characterized in that context: the introduction of the PSL…

201412.08
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Economists Don’t Even Know What Prosperity Is

Like the initial or preliminary GDP report in Japan for Q3, the first revision caught almost every economist totally the wrong way. Expectations were for upward re-figuring which should have been taken as a contrarian signal. And sure enough, December’s revisions to Q3 GDP were in the opposite direction as expected, and for all the…

201412.05
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Tough For All That Holiday Online Shopping When Nobody Will (Or Can’t) Use Their Credit Cards

If you don’t have much by way of income growth, then there are other less desirable options for spending sources. There are “entitlements” or transfers and then there is debt. In the current age, the federal government has been responsible for originating and disbursing the vast majority of consumer credit in the form of student…

201412.05 0

A Matter, It Seems, Of Faith

The juxtaposition could not be more fitting with all that is transpiring at this moment in economic history. On Monday, the headlines were filled with, Black Friday Fizzles as Sales Tumble 11% and ‘Black Friday’ Fades as Weekend Retail Sinks 11%. Then the “employment” report comes out and now the headlines are, More Jobs and…