It is increasingly hard not to fulminate at the latter day lunacy of blind CPI targeting. It seems hard to imagine that, 25 years ago, the brave little RBNZ was breaking new ground by adopting the goal of keeping price rises to 0-2% p.a. in order both to provide an anchor for its own broader policy aims and, believe it or not, as a way for it and the government of the day to wean the wider public sector off the levels of increasingly obstructive interventionism which had long been its practice to undertake.
Tales of the (Water) Margin
In trying to describe the mania which is sweeping China, the mere use of superlatives falls far short of conveying a true picture of what is afoot, meaning we have to just let the numbers speak for themselves.
‘Income £20-0s-0d. Expenditure £20-0s-6d’
In our previous ‘Money, Markets & Macro’ monthly publication, we devoted some time to a consideration of the fact that the growth in US payroll costs was beginning to outstrip that of business revenues, a state of affairs which we suggested could not long be endured. Continue reading
ECB Excesses
With last week’s report of monetary developments in the Eurozone, we again have evidence both of Draghi’s monetary monomania and of the sheer futility of his constant refrain that the ECB is just buying time until member states undertake the ever-promised, but never-delivered ‘structural reforms’ which they all so patently require.
Losing Momentum
After several weeks of solid upward movement, industrial commodities are beginning to fade once more, switching from a dynamic which posed a threat to the upper bound of the last six months’ trading range to one which suggests a mean reversion is far more likely.
Publishing Update
Readers may have noticed a relative lack of activity on this website in recent weeks, an omission for which I apologise.
The reason behind this is that I have been involved in a good deal of work in preparing and launching a new flagship publication, one which will carry the bulk of my output henceforward.
This will take place in collaboration with the team at HindeSight Letters – an offshoot of the well-respected Hinde Capital. Those who wish to continue to receive the sort of in-depth analysis presented here, but now on a regular monthly basis, are invited to take a look at the newsletter, details of which can be found by following the link to:- ‘Money, Macro & Markets’
In the near future, HindeSight will also be publishing a more condensed, weekly update which will aim to add a brief commentary on salient data and market developments as they arise. Details will be forthcoming shortly.
In light of this, the blog here will carry much briefer, ad hoc articles from now on – essentially those for which a tweet is perhaps too short – as well as announcements of updates to the Hinde pages.
I hope I can count on your continued interest under the new regime.
Many Thanks,
Sean
Bill White & True Sinews: In-Depth Part II
Please find the concluding part of our discussion where, among other topics, we touch upon the arbitrary and even capricious nature of the policy goals we are pursuing at such cost in the attempt to shore up what Bill disparagingly calls the ‘Non-System’.
Midweek May Macro
Amid all the debate about the US economy and the somewhat vague prospect of the Fed finally showing some cojones at some point in the future, the principle feature which allows the Doves to block any renormalization of the rate is the supposedly soft state of the labour market, particularly with reference to the sorry-looking participation rate.
Bill White & True Sinews: In Depth Part I
Please find here the first part of the lengthy discussion – organized by the Cobden Centre with kind assistance from Hinde Capital – which we held in March with William White, that most distinguished elder statesmen of finance and one of the few to really understand that if we are ever to find the right answers to the problems confronting us, we must at least be prepared to ask difficult questions. Part II will be posted shortly.
Monday Morning Macro
Though the punditocracy has become much more aware of the sheer scale of China’s equity bubble in recent weeks, it is still arguably the case that reality is running ahead of reportage even as more and more evidence emerges of just how dire things are in the world beyond the brokerage screens.