Wednesday , November 25 2020
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Tag Archives: jolts

QE Didn’t JOLT (again)

COVID-19 is a 2020 story and not so much one for 2021. Pretty much everyone, however, will be seeking to make it that way. To begin this week a stark reminder of that promise: vaccine-phoria. While that unleashed a curiously narrow risk and reflation frenzy, the fact that it wasn’t more widespread speaks to this disparity.A vaccine doesn’t really change all that much over the intermediate term. An unquestionable good for public health (whatever that means) and a positive development given...

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Inflation Conditions Absent: Someone Call Jay

I missed it: did anyone ask Chairman Jay Powell how in the world he’s going to be able to create this “hot” inflation he already needs to balance out a decade without it (meaning: recovery and growth) in order to satisfy this newfangled average inflation target? And though he makes it sound like it’s a new thing, especially adding the word “flexible” before the term, it’s actually not new at all. But it sounds better if you think that it is.To have any chance the Fed will first have to...

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Even More Suggesting Something Did Happen In July

Confident consumers are risk takers. Not only do they spend freely, they freely borrow in order to spend. Jay Powell has done his absolute best (I know) to convince Americans they have nothing to fear insofar as any economic fallout from COVID might be concerned. The Federal Reserve working in combination with the federal government has got every conceivable angle covered. In the multiple trillions. So, stop worrying.Yet, the Federal Reserve also reports that some substantial slice of the...

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A Second JOLTS

What happens when we are stunned and dazed? We filter out the noise to focus on the bare basics by getting back to our instincts, acting reflexively based upon our deeply held beliefs and especially training. When faced with a crisis and there’s no time to really think, shorthand will have to suffice. That’s what was so odd about 1930, as I wrote about last week. The stock market crash had happened during the prior October, but while that had meant panic on Wall Street generally speaking...

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There Was Never Going To Be A ‘V’ Because The Bowl Was Always Empty

What was stupidest about the past few months was how it was these guys who everyone was depending upon to make it all go just perfectly moving forward. Worse, those geniuses being held up as competent economic stewards practically reran the 2008 playbook line by line. What that said, more than anything, was that they had come up with zero new ideas. Nada. Zip. A full decade to think about it and just more of the same.Of course, Janet Yellen said this could never happen again. Not in our...

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Less Shine In The Sentiment Formula

The IMF yesterday downgraded its forecasts for global growth as well as its real GDP estimates for all the big economy regions. The organization now thinks GDP growth might have amounted to 2.9% last year. Not only the worst year since 2009, that was down from April 2019 approximations of 3.6% and the original forecasts which always start out near 4%. Worse, estimates for this year are being trimmed. Though pretty much everyone has become more optimistic about the global economy, what does...

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Very Rough Shape, And That’s With The Payroll Data We Have Now

The Bureau of Labor Statistics (BLS) has begun the process of updating its annual benchmarks. Actually, the process began last year and what’s happening now is that the government is releasing its findings to the public. Up first is the Household Survey, the less-watched, more volatile measure which comes at employment from the other direction. As the name implies, the BLS asks households who in them is working whereas the more closely scrutinized Establishment Survey queries establishments...

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Consistent Trade War Inconsistency Hides The Consistent Trend

You can see the pattern, a weathervane of sorts in its own right. Not for how the economy is actually going, mind you, more along the lines of how it is being perceived from the high-level perspective. The green light for “trade wars” in the first place was what Janet Yellen and Jay Powell had said about the economy. Because it was strong and accelerating, they said, the Trump administration gambled that such robust growth would insulate the US system from any fallout. Flush with confidence...

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Monthly Macro Monitor: Doom & Gloom, Good Grief

When I first got in this business oh-so-many years ago, my mentor told me that I shouldn’t waste my time worrying about the things everyone else was worrying about. As I’ve related in these missives before, he called those things “well-worried”. His point was that once everyone was aware of something it was priced into the market and not worth your time. That has proven to be valuable advice over the years and I think still relevant today. We continue to hear, on an...

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From JOLTS Series Shift To Series of Rate Cuts

I’ve said all along that they would be dragged into them kicking and screaming. After all, the Federal Reserve undertook its last rate hike in December 2018 – just as the markets were making clear he was completely mistaken in his view of the economy. What followed was the ridiculous “Fed pause” which pretty much everyone outside of the central bank and the Economics profession knew wasn’t the end of it. You know the story. When he finally gave in at the end of July, the Federal Reserve...

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