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Near Record Expansion (Really Reduction)

By |2017-06-29T16:01:59-04:00June 29th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Real GDP in the US was revised up to 1.41% quarter-over-quarter (annual rate), still the fourth of the last six to be less than 1.5%. While economists and policymakers have taken to judging the economy by its downside, that is only because the extent of the global problem is revealed by complete absences of an upside. The occasional decent quarter [...]

Risk Appears Seriously Wounded

By |2015-08-21T17:31:47-04:00August 21st, 2015|Bonds, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Stocks aren’t quite as immune to financial disruption in the middle of 2015 as they had been previously. The last major, comprehensive selloff was also in tandem with “dollar” disorder back last October 15. This time, the motion was more erosion than “event”; at least until the past week. Just like crude oil, stocks lost their momentum back in early [...]

Janet Yellen, A Bear Late and a ‘Dollar’ Short

By |2015-05-06T17:06:20-04:00May 6th, 2015|Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

For policymakers a sense of timing doesn’t appear to be among the highest qualities demanded. That certainly applies to almost every economic proclamation that has come out of any central bank globally, as they both fail to ever see forming recession and always proclaim recoveries that don’t happen to exist. It’s not just a matter of jumping the gun, it [...]

Turns Out The ‘Rising Dollar’ Is Real

By |2015-04-23T11:47:30-04:00April 23rd, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

The purpose of trying to frame revenue and earnings as a figment of dollar calculations is, of course, to make it seem as if these are just numbers that have little meaning. The emphasis on “constant currency” terms is not just a means to alter the figures but the very meaning itself. As IBM has constantly proclaimed, yes, its revenue [...]

It All Went So Quickly

By |2015-04-22T15:52:41-04:00April 22nd, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

It seems a very long way from here, but it was only December 23rd when the economy was taken as “booming.” That was the day that excited economists under direct confirmation, allegedly, that this time was different. The Commerce Department had reported Q3 GDP up to 5%, raising estimates for business investment and consumer spending. The recovery had arrived, at [...]

Unextrapolating Bubble Expectations

By |2015-04-13T17:08:53-04:00April 13th, 2015|Bonds, Economy, Markets, Stocks|

No inflection is ever expected in the real economy since everything is always extrapolated in straight lines by orthodox economists using econometrics. Similar interpretations are being used in stocks, and not just in the “earnings recession” that is already declared “unexpected.” In terms of share prices, there is little doubt about what is holding up the S&P 500 and larger [...]

Realistic Economic Context

By |2014-08-04T15:01:47-04:00August 4th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

Following up on the payroll disparities that were updated on Friday, it is still difficult to be confident that the economy is on any kind of solid ground. For starters, though the Establishment Survey shows 4.4 million new jobs in the 21 months since October 2012, for an average of 207k per month, the companion Household Survey is only at [...]

Leverage Channels

By |2014-06-10T11:44:33-04:00June 10th, 2014|Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Following up on yesterday’s observations about valuations in stocks, margin debt declined in April for the second consecutive month. The absolute change across both March and April is not very large, amounting to $27 billion or 5%. Total cash balances were essentially unchanged, meaning that investors retired margined positions and reduced overall leverage in retail accounts. Since there was little [...]

Corporate Revenues Back To Low Point

By |2014-02-03T17:35:11-05:00February 3rd, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

Going back to the snow debunking from earlier today, the primary impediment to wider economic expansion outside of bifurcation and artificial monetary channels is income and employment. Mainstream commentary aside, employment has been mostly atrocious for some time. The clear divergence between the Establishment Survey and the Household Survey, both from the BLS, establishes that break in October 2012 – [...]

The Year of Leverage

By |2014-01-28T17:38:23-05:00January 28th, 2014|Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

The theme of stock margin debt and its obvious correlation to QE episodes continued into December. Margin debt levels are at record highs, but more importantly investor net worth in the aggregate has finally closed in on the dot-com levels. While just a bit short of the most extreme month of the dot-com mania, margin debt and negative net worth [...]

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