Tag Archives: US

Central banks are currently creating the mother of all bubbles. To my view it was caused by masses of cheap labor in China that entered the global economy in the early 1990s.This reduced inflation and interest rates, while Chinese productivity continously improved, in particular when rural workers came into the cities.The mother of all bubbles will pop at the latest, when Chinese wages approach Western levels....

The major central banks have placed down their markers and have moved to stage left. There are the late-month high frequency data, which pose some headline risks in the week ahead. The main focus for most investors will be on several political developments. The first US Presidential debate is wild card, in the sense that the outcome is unknown. In recent weeks, the polls have drawn close. In early August, Nate Silver’s...

[unable to retrieve full-text content]Laws of politics have been turned upside down. The Intellectuals Yet Idiots can make no sense of it. The underdog who ‘tell it how it is’ appeal to people while established reasoning does not.

[unable to retrieve full-text content]Median household income was higher in 2015 than in 2008, but still below 1999 peak in real terms. The bottom fifth of households by income have just recouped what was lost. Income growth did best under (Bill) Clinton and Reagan, including for top 5%. Origin of strong dollar policy means it will not be used as a trade weapon and it hasn't since Bentsen.

[unable to retrieve full-text content]The great “science” of economics once discovered an empirical relationship between GDP and unemployment that has been dubbed Okun’s Law. It simply states that the unemployment rate rises as GDP contracts, or vice versa, as production shrinks less peo...

Annual population and labour force growth in Japan Which country, the United States or Japan, have had the fastest GDP growth rate since the financial crisis? Due to Japan’s bad reputation as a stagnant, debt ridden, central bank dependent, demographic basket case the question appears superfluous. The answer seemed so obvious to us that we haven’t really bothered looking into it until one day we started thinking...

Imagine the financial crisis knocked you out and you did not wake up from the coma that followed until this day. Then, presented with the following three charts you were asked to guess where the federal funds rate was trading. Given the fact that the core CPI is on a steep uptrend and currently over the arbitrarily set 2 per cent target; unemployment below what the FOMC regards as full employment and; GDP running at a...

Summary: The US recovery may have surpassed the 2001 recovery in Q2. Though disappointing, the recovery has been faster than average from a balance sheet crisis. Although slow, it is hard to see the secular stagnation in the data. This Great Graphic was tweeted Alan Kruger (@Alan_Kruger). Drawing on official data and the Atlanta Fed’s GDP Now tracker for Q2 GDP (2.4%), it shows the current business cycle in...

With global attention focused on BREXIT calamity, potentially more important questions are being overlooked, and especially in the South China Sea where storms are currently brewing between China and a range of littoral states for strategic control of territorial waters. To be clear, our long term geostrategic position remains unchanged; China moving towards the ‘nine dash’ line China will gradually secure control of...

On June 8, the price of Brent crude ticked above $50 a barrel for the first time since August 2015. But the new $50-plus era came to an end two days later, amid a broader selloff that affected multiple asset classes. Energy analysts with Credit Suisse’s Global Markets team point out, however, that both supply (which is shrinking) and demand (which is growing steadily) point to firming oil prices ahead. Indeed, the bank’s analysts think that after two years of oversupply, the crude oil market...