Tag Archives: economy

Consumer confidence in Germany never really picked up all that much last year. Conflating CPIs with economic condition, this divergence proved too big of a mystery. When the German GfK, for example, perked up only a tiny bit around September and October 2021, the color of consumer prices clouded judgement and interpretation of what had always been a damning situation. From GfK back then: The growing consumer optimism signals that consumers here consider the German...

When “whatever it takes” means confiscation of wealth One of the reasons people decide to buy gold bullion or add silver coins to their portfolio is because they cannot be devalued. No one can suddenly decide to print more gold or silver! Sadly, this is exactly what happens with currencies around the world. And the last two decades have been prime examples of this. As governments rush to patch up past mistakes, missed warnings and election cycles they resort to...

It’s not just the flood of never-ending inventory. That’s a huge and growing problem, sure, as the chickens of last year’s short-termism overordering finally come home to their retailer roost. Being stuck with too many goods isn’t necessarily fatal to the global and domestic manufacturing sectors. The scale of the burden is one key worry, though equally so is demand. When the orders were placed during last year, companies appear to have fully bought into (literally)...

It’s not recession fears, those are in the past. For much if not most (vast majority) of mainstream pundits and newsmedia alike, unlike regular folks this is all news to them (the irony, huh?) Economists and central bankers everywhere had said last year was a boom, a true inflationary inferno raging worldwide. For once, CPIs (or European HICPs) seemed to have confirmed the narrative. Unlike 2018 when inflation indices kept policymakers and their forecasts out in the...

The only thing that changed was the CPI. What distinguishes 2021-22 from the prior post-crisis period 2007-20 is merely the performance of whatever consumer price index. This latter has been called inflation, yet the data conclusively support the market verdict pricing how it never was. What data? The “everything” data, the most comprehensive financial and monetary compendium yet available: The Financial Accounts of the United States, or Z1. While this doesn’t quite...

Note: This update is longer than usual but I felt a comprehensive review was necessary. The Federal Reserve panicked last week and spooked investors into the worst week for stocks since the onset of COVID in March 2020. The S&P 500 is now firmly in bear market territory but that is a fraction of the pain in stocks and other risky assets. Stocks are now down 10 of the last 11 weeks but the pain was concentrated in the last two weeks. 5 of the last 8 trading days...

Over the weekend, Bitcoin tumbled again. Reaching an ultra-ugly low of $17,641 (before retracing back above $20k), even the self-styled premier digital “store of value” has thrown in the towel. As I wrote last week, winter isn’t coming it is here. One crucial reason why, the Japan’s Ministry of Finance reported last week how imports into that country during the tumultuous month of April surged by a frankly ridiculous 48.9% year-over-year. It was the biggest annual...

If the March gasoline/oil spike hit a weak global economy really hard and caused what more and more looks like a recessionary shock, a(n un)healthy part of it was the acceleration of Euro$ #5 concurrently rippling through the global reserve system. This much was apparent right from the start, with financial markets gone haywire three months ago (mid-March seasonal bottleneck), and then more of the same into April right to now. The updated TIC data for the month of...

At his last press conference, Federal Reserve Chairman Jay Powell made a bunch of unsubstantiated claims, none of which were called out or even questioned by the assembled reporters. These rituals are designed to project authority not conduct inquiry, and this one was perhaps the best representation of that intent. Powell’s job is to put the current predicament in the best possible light, starting by downplaying the current predicament. From there, to try to get the...

While the world fixated on the US CPI, it was other “inflation” data from across the Pacific that is telling the real economic story. Having conflated the former with a red-hot economy, the fact American consumer prices aren’t tied to the actual economic situation has been lost in the shuffle of the FOMC’s hawkishness, with markets obliged to price wrong-way Jay. The short end of the yield curve (USTs and elsewhere) is plotting like FOMC dots, whenever oil and crude...