201505.22
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BEA Rocks The Fed’s GDP Scapegoating

The FOMC statement this week made a great deal about what amounts to charges of statistical impropriety toward the BEA’s GDP figures. The first quarter always seems to amount to a slow part of the season, which it really is because there is the massive Christmas buildup. It is clear that the Federal Reserve, referring…

201505.21
2
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Rebound Gone, Now Attention To Below

Sticking with the sentiment factor for the economy, or at least in mostly unhelpful measurements for it, it is interesting that most of the manufacturing and business sentiment indices are failing to find the FOMC’s “transitory” economic nature. The most helpful so far has been the Chicago Business Barometer, but that merely ticked above 50…

201505.20
9
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The Definitive Monetary Policy Statement

To preserve any idea that the US is not heading into recession, the FOMC is now wholly reliant on statistical processes within the BEA’s use of the Census Bureau’s updated ARIMA-X13 modeling system. It is amazing to see this policy body that once proclaimed, unequivocally and forcefully, that it could perform the monetary equivalent of…

201505.20
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Curtailing All Notions of Recovery

The Japanese have been encouraged today by the notion that their economy might actually be finding a recovery – as economists see it. As with so many other things in this QE period, the very definition of recovery seems to be up for debate in sharp contrast to accepted economic standards not all that long…

201505.20
3
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Where Is This Housing Rebound?

These may be desperate times indeed, where every small piece of anything not wholly dismal is singled out as the indicator that either the worst has passed or it never was. I am simply at a loss to describe housing construction figures in such unequivocally glowing terms. For the most part, construction activity hasn’t deviated…

201505.19
4
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We Are Going To Find Out If An Immense Asset Bubble Can Be Carefully And Purposefully Deleveraged

Some people are getting very nervous about China, and as usual that stems from a misreading of the Chinese intentions. This is not to say that one should not be concerned at all, but it is much better to be concerned for the right reasons in order to find a more suitable line of inquiry…

201505.18 0

Kept Afloat With Nothing But Happy Thoughts, Is It Any Wonder The Sinking?

The Edmund Fitzgerald departed the Burlington Northern Railroad dock in Superior, Wisconsin on November 9, 1975, at about 2:20 in the afternoon. She was carrying a load of taconite pellets to Zug Island in the Detroit River, a rather routine run for this massive ore hauler on the Great Lakes. Only a few minutes after…

201505.18
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The Basic Economics of Smaller Economy

Since hitting it most recent low in mid-March, spot WTI has rebounded about 40% reaching above $61/barrel at one point. The ultimate low, which brought the physical price down under $43, was on the morning of March 18. The FOMC statement later that afternoon has been taken as a removal of any close threat to ZIRP,…

201505.17
5
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Let Them Eat Cake

It’s very decorative, it’s very large, it looks very expensive, it’s very splashy. I’d identify the new owner as being very rich, and it’ll brighten up his expensive apartment. Would you want any more reasons? John Richardson, Picasso biographer on why Les Femmes d’Alger (Version O) is worth the $179 million it fetched at a…

201505.15
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Industrial Production Sinks As Capacity Signals Inventory End

Continuing on with the inventory theme, industrial production (which does include activities outside the manufacturing sector) continues to falter suggesting that piling inventories are at least beginning their recessionary effects. By every measure, IP is decelerating and doing so at a rate usually observed of the initial stages of dislocation. In the adjusted series, IP…