What's your outlook for this year? I've heard that question repeatedly over the last month and if you're reading this hoping I'll let you have a peek at my crystal ball, you're going to be disappointed. Because I don't have a crystal ball and neither, I hasten to add, does anyone else in this business. So, no, I don't know [...]
Ben Bernanke once admitted how the job of the post-truth “central banker” is to try to convince the market to do your work for you. What he didn’t say was that this was the only prayer officials had for any success. Because if the market ever decided that talk wasn’t enough, only real money in hand would do, everyone’d be [...]
It isn’t just the vast difference between Chinese consumer prices and those in the US or Europe, China’s CPI has been categorically distinct from China’s PPI, too. That distance hints at the real problem which the whole is just now beginning to confront, having been lulled into an inflationary illusion made up from all these things.To start with, yesterday China’s [...]
This is basically a rhetorical question drawn from a generally rhetorical exercise. We’ll never know for sure, this is about China, after all. Transparency is a Western obsession and a curse for the committed Communists. Particularly when the Party of “Science” starts to lose control of the situation when such a possibility has been treated as pure blasphemy.Did the Chinese [...]
As a preface to this update ostensibly on Europe, it’s all really about Euro$ #5 sadly rounding into form. In this first part, I’m going to have resurrect the quotation marks surrounding the term “rate hikes”, or bring back RHINO (rate hikes in name only) given what’s going on in Treasury bills.Not rate hikes, or enough of them. Our dead [...]
Cue up the old VHS tapes of Bill Clinton. The former President was renowned for displaying, anyway, great empathy. He famously said in October 1992, weeks before the election that would bring him to the White House, “I feel your pain.”What pain? As Clinton’s chief political advisor later clarified, “it’s the economy stupid.”Jay Powell is no retail politician in near [...]
It’s never just one thing or another. Take, for example, collateral scarcity. By itself, it’s already a problem but it may not be enough to bring the whole system to reverse. A good illustration would be 2017. Throughout that whole year, T-bill rates (4-week, in particular) kept indicating this very shortfall, especially the repeated instances when equivalent bill yields would [...]
It’s one of those things which everyone just accepts because everyone says it must be true. If the US$ is rising, what else other than the Federal Reserve. In particular, the Fed has to be raising rates in relation to other central banks; interest rate differentials. A relatively more “hawkish” US policy therefore the wind in the sails of a [...]
I may have to rethink my opinion of Christine Lagarde. It just may be that after helming one serious debacle after another, she – unlike most in her position – may have learned a thing or two about being too quick to call it a day. Premature celebrations were the hallmark of central banks throughout the last fifteen years, including, [...]
It wouldn’t be Euro$ #5 without perhaps the last of its rituals completed: the mainstream downgrades. Go back in time to each of the prior episodes, markets change, the data inflects, and then only later do surprised, shocked Economists at whichever establishment outpost begin to recalculate their DSGE outputs. Every time.Way back in 2015, it took the IMF’s semi-annual World [...]
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