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GDP Apart From the Military
By now commentators have focused on the rather dramatic reversal in government “contributions” to GDP for the initial Q3 2012 estimate. Nearly all of that government spending came in the defense...
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Wholesale Trouble
While last Friday’s jobs report had a decent headline number (if little else), the wholesale report is nothing but trouble. Start with wholesale sales, down 1.2% from September on an adjusted basis,...
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GDP, Q4 2012 Preliminary
Government spending and inventory builds were good in Q3, according to economists, when they pushed GDP accounting above expectations. Those same two economic accounts dramatically reduced economic...
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The Wonderful Warning of OZ
The global supply chain is pretty well established at this point, particularly in the years since the obvious dollar devaluation (Y2K and forward). Commodity countries like the BRICs (South Africa only...
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Commodity Prices Look to Confirm
Following up on the global trade warning out of Australia, commodity prices are acting as another corroborating piece of the global slowdown. Typically, copper acts as a decent barometer of global...
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China Confirms Australia and the Global Chain
The HSBC/Markit PMI for China fell back below 50 for the first time in seven months. This rebound has been relatively minor, more like an absence of contraction than a surge in manufacturing activity....
View ArticleDo BRICS Catch Flu?
It isn’t exactly the Thai baht, but the dong was slightly devalued yesterday. Vietnam reduced its reference rate by about 1% (the reference rate is the midpoint in a currency corridor for the...
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The Gold-China Connection
Gold sank lower in coincidence with the reappearance of Chinese liquidity issues. Much like the Fed, the PBOC has both denied it would inject liquidity into the interbank markets while at the same time...
View ArticleBrazil Central Bank to Defcon 4
Our thoughts on the BRICs as they navigate some difficult circumstances have been focused on the efforts of central banks. The more desperate the measures they employ to “defend” their currencies, the...
View ArticleBeyond US Bonds, Taper Pressuring Global Dollar Funding
The Reserve Bank of India was again spotted in the forex markets, as the rupee again nears its record low against the dollar. While India has myriad problems that add up to foreign exchange imbalances,...
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Using Less Is Not Growth
Because of the way GDP is calculated currently, the latest release on the US trade deficit is going to boost GDP slightly for Q2 (and just as likely will get canceled by a downward revision somewhere...
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The Monetary Illusion Crosses The Pacific
QE in any language has enthralled the mainstream media and economics profession so much that what should be so simple to interpret winds up as uncritical mush. For example, in the Washington Post with...
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The Corruption of QE: Destabilizing India & Brazil
The Reserve Bank of India (RBI) was back in action yesterday, this time promising monetary measures in search of stability not just for the rupee but for collapsing bond and stock markets. “Markets...
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Stall Speed Indeed; US Demand Is Simply Non-existent
Global trade is one of the primary “headwinds” facing the global economy, and it does contribute to the lack of dollar flow impeding exchange functions in troubled currency areas. A large part of the...
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The Dollar Still Rules
There is a pocket of stability forming in US dollar funding markets after the “unexpected” weakness of the last Establishment Survey jobs report (particularly the large revision for July). It appears...
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Understanding Eurodollars, Part 1
With the Federal Reserve’s taper summer having created “dollar” troubles throughout the known credit world, there is renewed interest in eurodollars and wholesale money. When the world previously took...
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Understanding Eurodollars, Part 2
The rapid growth of the eurodollar market made closing the gold window viable. Without an international mechanism to settle trade imbalances, there was no way to keep the dollar as a reserve currency....
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Sometimes Simple Is Elegant; Sometimes It’s Naive
Japanese exports continue to rise, but as we have seen in actual results elsewhere, both anecdotal and empirical, it’s a mirage driven by changes in the unit of measure (yen). Total exports from Japan...
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China-Gold Connection, Part 2
That gold prices are moving within range of the year’s lows is not at all surprising. We are in the midst of the fourth discrete episode of collateral/liquidity problems in interbank, wholesale...
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Understanding Eurodollars, Part 3
Given the relatively light holiday week, I thought it somewhat appropriate to finish the very heavy and systemic examination of the series on eurodollar markets (Part 1 here; Part 2 here). The...
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