A Dollar is What I Need

As what will be an interval greatly shortened by the Thanksgiving Day holiday dawns, traders and investors seem happy to continue where they left off on Friday, buying stocks, selling currencies, and giving bonds a fairly wide berth.

A little respite would not be entirely unwelcome after a period in which we have experienced record setting moves and switches of positioning in the likes of copper – where the latest numbers from the regulator show the non-commercials now boast a tally of net longs only once briefly topped – and that way back in 2003. Continue reading

Givers of the Law

Pride of place for political news outside the US must go to the UK High Court’s decision that the infamous Article 50 clause by which Brexit is to be achieved cannot take place without being subject to Parliamentary approval. Continue reading

Historical Norms? Really, Janet?

In the Q&A which followed the latest Federal Reserve exercise in ostrich imitation, Janet Yellen offered up this giant hostage to fortune, if only in the spirit of she-would-say-that-wouldn’t-she:

‘Overall, I would say that the threats to financial stability I would characterize, at this point, as moderate. In general, I would not say that asset valuations are out of line with historical norms.’

Patently, if she has somehow arrived at the determination that there is no indeterminably constituted asset bubble in operation, then it figures that non-bubble asset prices cannot be out of line with their norms. Chalk one up to answering one’s own question in the affirmative.

But how much truth is there in this claim? Not very much at all as you will discover if you click on the following link to read this extract of the latest monthly ‘Money, Macro & Markets‘:

MMM Sept 2016 Pt III

 

The Hitchhiker’s Guide to the Fed’s Toolkit

In light of the breathless anticipation which preceded the Fed Chair’s speech to her peers at Jackson Hole and cognisant of the mild state of befuddlement with which it was received, we felt it would be of interest to readers to have a translation, together with a gloss (each in bold), in order to try to remove some of the obscurities contained therein. Continue reading

Io, Saturnalia!

Ah, Brexit! What is there left to say that not already been said, most of it either out of folly or falsehood? As regards the overall political backdrop to this lightning bolt of mass discontent, the only thing that is clear is that there is no clarity—neither within Britain nor without. If, as the Good Book tells us, a house divided against itself cannot stand—hard hats on, people! Continue reading

Productivity Unpuzzled

It is certainly the case that the recently reported NFP numbers were poor. Compared to a mean/median of 193k a month in private job additions over this past six years or so, June’s paltry total – of 65k after we add back the 40k Verizon strikers – was 1.9 standard deviations away from what we have become used to.

Indeed, taking the raw, 25k increment, this was the worst showing since early 2010, capping off a three-month run which has been the worst since 2012. If we compare instead aggregate hours scaled for population, it can be argued that the figure has been edging into a zone which has been typical of past recessions – though, with frequent short-lived spikes in the record, this indicator needs the confirmation of subsequent bad months ahead. Continue reading

Money, Macro & Markets – The Archive

Regular readers will know that the articles published here are but a small subset of the detailed work I undertake to analyse economic and political developments and their effects on markets. In order to give some idea of the scope of this, presented below is an archive of past issues of the Austrian School-informed, in-depth monthly publication, ‘Money, Macro & Markets’ in addition to which I compile twice monthly updates as the ‘Midweek Macro Musings’ which are also made available on a complimentary basis to subscribers to the former letter.

Continue reading

What WILL it Take?

In the midst of all the recent uproar, one anonymous Twitterer seized his chance to have his Uber-Warholian, 140-characters-of-fame moment and thundered: ‘Central banks are losing control of this market!’ no doubt eliciting whatever the social media equivalent of a cry of ‘Hear! Hear!’ and an approbatory nodding of the head might be from among his followers. Continue reading

Manufacturing matters

Much predictably fatuous comment has been devoted to the fact that, to the extent that the US is facing any difficulties at all outside the oil patch, at present these ‘only’ affect manufacturing—a sector which , as any fool knows, accounts for a mere 12% of GDP. Ergo, we are told, while employment in general holds up and consumer spending is maintained, a recession is not to be countenanced—a bill of clean health which conveniently supports the sell-side’s fingers-crossed contention that stocks are cheap and that credit is beginning to offer up real bargains for the man brave enough to dip his toe back into the waters. Continue reading