A Perfect Example of the Euro$ Squeeze

By |2019-11-07T16:22:14-05:00November 7th, 2019|Economy, Federal Reserve/Monetary Policy|

Germany’s vast industrial sector continued in the tank in September. According to new estimates from deStatis, that country’s government agency responsible for maintaining economic data, Industrial Production dropped by another 4% year-over-year during the month of September 2019. It was the fifth consecutive monthly decline at around that alarming rate. Four percent doesn’t sound like [...]

A Bigger Boat

By |2019-09-10T12:42:43-04:00September 10th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

For every action there is a reaction. Not only is that Sir Isaac Newton’s third law, it’s also a statement about human nature. Unlike physics where causes and effects are near simultaneous, there is a time component to how we interact. In official capacities, even more so. Bureaucratic inertia means a lot more than just [...]

Is The Negativity Overdone?

By |2019-09-09T18:40:36-04:00September 9th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Give stimulus a chance, that’s the theme being set up for this week. After relentless buying across global bond markets distorting curves, upsetting politicians and the public alike, central bankers have responded en masse. There were more rate cuts around the world in August than there had been at any point since 2009. And there’s [...]

The Shock, The Squeeze, and The Downside

By |2019-08-28T11:39:46-04:00August 28th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Yesterday, Eurostat confirmed that German GDP in Q2 2019 had contracted. Also issuing benchmark revisions, the European government agency found that GDP growth had been slightly better than previously thought at the top of Reflation #3. The last two quarters of 2017 saw the biggest upward revisions. But if Europe’s “boom” really was a little [...]

Japan: Fall Like Germany, Or Give Hope To The Rest of the World?

By |2019-08-26T16:42:01-04:00August 26th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

After trading overnight in Asia, Japan’s government bond market is within a hair’s breadth of setting new record lows. The 10-year JGB is within a basis point and a fraction of one while the 5-year JGB has only 2 bps to reach. It otherwise seems at odds with the mainstream narrative at least where Japan’s [...]

Germany’s Superstimulus; Or, The Familiar (Dollar) Disorder of Bumbling Failure

By |2019-08-21T11:37:16-04:00August 21st, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Economics textbook says that when faced with a downturn, the central bank turns to easing and the central government starts borrowing and spending. This combined “stimulus” approach will fill in the troughs without shaving off the peaks; at least according to neo-Keynesian doctrine. The point is to raise what these Economists call aggregate demand. [...]

Europe’s Further Confirmation(s)

By |2019-08-14T17:08:18-04:00August 14th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The key takeaway from Europe’s economic data dump today isn’t that the whole Continental economy is poised on the verge of recession, though that’s thrust of what’s being written about most. The reason is simple; this is all highly unexpected in the mainstream. Going by official accounts alone, there was never a hint of trouble [...]

Why You Should Care Germany More and More Looks Like 2009

By |2019-08-13T13:01:05-04:00August 13th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What if Germany’s economy falls into recession? Unlike, say, Argentina, you can’t so easily dismiss German struggles as an exclusive product of German factors. One of the most orderly and efficient systems in Europe and all the world, when Germany begins to struggle it raises immediate questions about everywhere else. This was the scenario increasingly [...]