201806.18
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Global Asset Allocation Update

The risk budget is unchanged this month. For the moderate risk investor the allocation to bonds and risk assets is evenly split. There are changes this month within the asset classes. How far are we from the end of this cycle? When will the next recession arrive and more importantly when will stocks and other…

201804.18
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Why The Last One Still Matters (IP Revisions)

Beginning with its very first issue in May 1915, the Federal Reserve’s Bulletin was the place to find a growing body of statistics on US economic performance. Four years later, monthly data was being put together on the physical volumes of trade. From these, in 1922, the precursor to what we know today as Industrial…

201801.22
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For All That Seems To Go Right, What’s Always Missing?

On April 29, 2011, the US benchmark oil price (WTI) surged above $113 per barrel. It wasn’t just American oil prices, either, as other benchmarks around the world were on a huge run. It was the highest for crude oil in three years, going back to the weeks immediately following Lehman. At that price, more…

201712.05 5

Giant Sucking Sound Sucks (Far) More Than US Industry Now

There are two possibilities with regard to stubbornly weak US imports in 2017. The first is the more obvious, meaning that the domestic goods economy despite its upturn last year isn’t actually doing anything positive other than no longer being in contraction. The second would be tremendously helpful given the circumstances of American labor in…

201710.23
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Bi-Weekly Economic Review: Yawn

When I wrote the update two weeks ago I said that we might be nearing the point of maximum optimism. Apparently, there is another gear for optimism in this market as stocks have just continued to slowly but surely reach for the sky. Which is fine I suppose since we own the devils (although not…

201709.08
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Why So Much Inventory?

Liquidity and more so liquidity preferences are vastly misunderstood for a whole host of reasons. A lot of it has to do with the dominant strains of Economics battling each other (saltwater vs. freshwater) over which statistical model fails less frequently. In shifting to mathematics and statistics, something great has been lost. Economists don’t understand…

201709.05
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Demand Dearth

The fundamental problem is that we don’t know what’s wrong. In many ways that is a worse condition because it is one step further removed from a solution. Even after ten years “we” still have to prove that the one thing everyone largely believes can’t be the depressing issue is. Earlier this year as the…

201708.14
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Bi-Weekly Economic Review: Ignore The Idiot

Of the economic releases of the past two weeks the one that got the most attention was the employment report. That report is seen by many market analysts as one of the most important and of course the Fed puts a lot of emphasis on it so the press spends an inordinate amount of time…

201708.02
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Fourth Order ‘Rising Dollar’ Effects Hit 2017

Total construction spending fell considerably in June 2017, according to Census Bureau estimates released yesterday. Seasonally-adjusted, layouts for new construction declined by 1.3% from May. That’s the second time in the last three months there was such a large drop. Year-over-year (unadjusted), total spending grew by just 1.2%, the lowest rate of expansion since November…