201805.15
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Tax Cuts And (Less) Spending

After being rumored and talked about for over a year, at the end of last year the tax cuts were finally delivered. The idea had captured much market attention during that often anxious period of political flirtation. Prices would rise or fall by turn based on whether or not it seemed a realistic possibility. Public…

201801.03
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The Anti-Reflation Story Is The One That Mattered, And The Treasury Market Isn’t The Only One Telling It

The Treasury market isn’t the only place where the idea of “globally synchronized growth” is proving a tough sell. The collapse of the yield curve suggests, in fact, it isn’t being bought one bit. Apart from bonds, US companies aren’t warming to the economic warming, either. The labor market apart from the unemployment rate remains…

201712.12
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You Really Have To Pick The Right Variable First

Ronald Coase was one of the few economists who was easy to admire. There are and have been a few out there, and it was Coase by and large leading the critique of the increasingly detached state of economics (really Economics). In his 1991 Nobel Prize acceptance speech, he was as usual blunt in his…

201710.03
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The Construction Example

Construction spending rose slightly in August after two months of serious declines. At a seasonally-adjusted annual rate of $1.22 trillion, that’s slightly less than the estimate for November 2016 when “reflation” (sentiment) was at its apex. It’s a pattern that we see repeated throughout the economic accounts; some growth in the second half of last…

201709.01
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Now Capex?

Of all the high frequency data the Personal Savings Rate is probably the least reliable. It is subject to both regular and benchmark revisions that can change the estimates drastically one way or the other. One step up from that statistic is the figures for Construction Spending. The initial monthly estimates don’t survive very long,…

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…

201506.01
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Inflation, Properly Defined

With the preliminary release of the quarterly GDP revision comes the BEA’s version of corporate profits. This is obviously different from EPS accounting that goes along with stock indices and various earnings growth measures as this macro view of profits encompasses a much larger business spectrum (though it does not include non-corporate business which is…

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…

201406.02
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An Incomplete Picture: Reverse Repos, T-bills and Gold

The explanation given for the increase in participation at the reverse repo “window” in mid-April was taxes. In other words, the payment of quarterly and annual estimates and billings reduced the need for the federal government to borrow. Since the variability in borrowing amounts is taken up in t-bills, the relative scarcity of on-the-run t-bills…

201401.05
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Do You Feel Lucky?

Well, 2013 is in the books and it was a stellar year for anyone who had the moxy to ignore all the rules we’ve been taught about investing. Diversification? Didn’t need it last year. All you had to do was buy US stocks, the more speculative the better, and let it ride.  Bonds to reduce…