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Repo fails make sense being an indicator of collateral difficulties. Same for the 4-week US Treasury bill rate when it falls substantially. But how does Japanese government bill yields fit into the US$ repo picture? And why are they such a solid fit for it? The answer lies in the carry trade and what it means for funding markets as well as US recession risks. 

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Bloomberg Mizuho Buys ‘Safe’ Assets on Risk That US Soft Landing Fails
https://www.bloomberg.com/news/articles/2024-10-08/mizuho-buys-safe-assets-to-cut-damage-if-us-soft-landing-fails

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Some unexpected bad news out of South Korea has implications for AI and a lot more. The investment boom triggered by ChatGPT has been a critical support for especially the Asian economy. Now there are signs it is cooling off along with a further setback in autos. Inopportune timing, to say the least.  

Eurodollar University's conversation w/Steve Van Metre

Bloomberg South Korea’s Economy Ekes Out Growth as BOK Assesses Risks
https://www.bloomberg.com/news/articles/2024-10-23/south-korea-s-economy-ekes-out-growth-to-emerge-from-contraction

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Gold continues to soar to record highs, but why? Most will say inflation though bullion is actually a terrible inflation hedge. The reason why many people believe this is the one time during the Great Inflation. Gold's run in the seventies was instead about what happened in the sixties long before the inflation. And it's the same thing - the other end of it - that we're seeing today. 

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FRB Boston Bretton Woods Conference 1984
https://www.bostonfed.org/-/media/Documents/conference/28/conf28.pdf

Alan Greenspan Testimony Before the Committee on Banking and Financial Services, U.S. House of Representatives July 24, 1998
https://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm

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A lot of people are asking if the Fed now regrets cutting rates by 50 bps in September, or maybe cutting at all. Recent data make it seem as though the soft landing never went anywhere, plus what appears to be happening with market interest rates. In truth, every part of this Fed "regret" trend is wrong, starting with the view from the central bank itself. 

Eurodollar University's Money & Macro Analysis

Federal Reserve Beige Books
https://www.federalreserve.gov/monetarypolicy/publications/beige-book-default.htm

FOMC Chair Powell Press Conference September 2024
https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20240918.pdf

Bloomberg Fed’s Beige Book Shows Little Growth Across Most of US
https://www.bloomberg.com/news/articles/2024-10-23/fed-s-beige-book-shows-little-economic-growth-across-most-of-us

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Another central bank moves up its rate cut plans, accelerating its rate reductions with a 50-bps cut. At the same time the IMF lowers growth projections and warns risks of more downside are rising. These two developments are related to the same thing. It's becoming clearer where this weakness is coming from and that's why the public sector is starting to become more aggressive. 

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Bank of Canada October 2024 Monetary Policy Report
https://www.bankofcanada.ca/wp-content/uploads/2024/10/mpr-2024-10-23.pdf

Bloomberg IMF Lowers Global Growth Forecast, Warns of Increasing Risks
https://www.bloomberg.com/news/articles/2024-10-22/imf-lowers-global-growth-forecast-warns-of-increasing-risks

IMF WEO October 2024 Policy Pivot, Rising Threats
https://www.imf.org/en/Publications/WEO/Issues/2024/10/22/world-economic-outlook-october-2024

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Huge thanks to Eric Basmajian and train-traveler Mike Green for answering member questions. Member/Subscriber Live Q&A recorded October 22, 2024.

We are seeing the full effects of the debt crisis paradox. And it only seems like a "paradox" from hte perspective of conventional wisdom on the matter. Government debt is indeed bad for the economy, but not AT ALL in the way most people are led to believe or assume. This creates another paradox, one where that mainstream criticism does a lot to discredit all criticism thereby making even more debt likely.  

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Milton Friedman Newsweek February 1981
https://miltonfriedman.hoover.org/internal/media/dispatcher/214251/full

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Does the Bank of Canada need to exist? Canada shares a lot more than just a common border with the US, interest rates, inflation, even changes in economic output. And those are all pointing in the wrong direction. The Canadian experience provides a perfect example of what globally synchronized really means in all its facets. 

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This may end up being the final straw for what's left of the global economy. With more highly negative signals from copper, gold, oil and swaps, even bond spreads here, we're getting more impressions that the part rolling recession is now rolling right on into the full thing. If this one goes, that's usually it. 

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Bloomberg Carmaker Misery Is Dragging Down Global Credit Market Returns
https://www.bloomberg.com/news/articles/2024-10-16/carmaker-misery-is-dragging-down-global-credit-market-returns

Bloomberg Rolling Manufacturing Recession Collides With US Election Angst
https://www.bloomberg.com/news/newsletters/2024-10-18/us-manufacturers-face-layoffs-weak-results-ahead-of-trump-harris-election

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A whopping 98% of American voters in one mainstream poll say the economy is a major concern, including 79% who rate it their top worry. Economists, the media, politicians, policymakers are at a loss to explain this. The latest data from the US government shows why that is, both the confusion and the underlying trouble. A vast majority of the evidence continues to consistently agree with what Americans are saying.

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NRF Census Retail Sales Data Shows Retail Sales Grew in September
https://nrf.com/media-center/press-releases/census-retail-sales-data-shows-retail-sales-grew-september

NRF CNBC/NRF Retail Monitor Shows Retail Sales Declined Monthly in September But Still Grew Year Over Year
https://nrf.com/media-center/press-releases/cnbc/nrf-retail-monitor-shows-retail-sales-declined-monthly-september

AP NORC
https://apnorc.org/projects/the-economy-tops-voters-minds-as-they-consider-their-vote-in-the-upcoming-election/

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Wall Street was rocked by a huge plunge in orders for ASML, a company which produces machines that touch practically every part of the global economy. That was followed by another four-letter firm, LVMH, which reported a shock decline in revenue. Both showing the same thing from very different angles, further confirming - along with swap markets - why there will be another leg down in interest rates.

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ASML Home
https://www.asml.com/en

ASML Q4 2023 Results
https://www.asml.com/en/news/press-releases/2024/q4-2023-financial-results

ASML Q3 2024 Results
https://www.asml.com/en/news/press-releases/2024/q3-2024-financial-results-dd3ac76a9d4d0f8c

Intel Q2 2024 Financial Results
https://www.intc.com/news-events/press-releases/detail/1704/intel-reports-second-quarter-2024-financial-results

LVMH Q3 2024 Results
https://www.lvmh.com/en/publications/lvmh-shows-good-resilience-in-the-current-context

NYT Shares of Louis Vuitton Owner Drop on Anxiety About Chinese Shoppers
https://www.nytimes.com/2024/10/16/business/dealbook/lvmh-dior-louis-vuitton-china.html

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We are in the thick of bank earnings and quarterly reports. The one theme they keep coming back to is...losses. It's become such a problem even JPM CEO Jamie Dimon snapped during his last earnings call. The thing is, in spouting off he told the truth about all of it. 

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Bloomberg Jamie Dimon Is Right. Forget the ‘Damn Number.’
https://www.bloomberg.com/opinion/articles/2024-10-14/jamie-dimon-is-right-analysts-need-to-look-beyond-their-models

Bank of America Quarterly Earnings
https://investor.bankofamerica.com/quarterly-earnings

JPM Third Quarter 2024 Results
https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2024/3rd-quarter/66269bb6-ecc5-4172-b461-6b7e7cd47aab.pdf

Citigroup Third Quarter 2024 Results
https://www.citigroup.com/rcs/citigpa/storage/public/Earnings/Q32024/2024pr-qtr3rslt.pdf

Bloomberg Consumers Shift Spending to Pay for Basic Staples, Citi CFO Says
https://www.bloomberg.com/news/articles/2024-09-09/consumers-shift-spending-to-pay-for-basic-staples-citi-cfo-says

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Another update from top Chinese officials on the status of "stimulus" comes amidst a flurry of macro and banking data from the country. While many will claim the former cancels out the increasingly grim nature of the latter, the previous data still matters at the very least to describe the size of the hole China will have to climb out of. Assuming it is even making a reasonable attempt to. That last press gathering provided few assurances. 

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China NBS Consumer Prices September 2024
https://www.stats.gov.cn/sj/zxfb/202410/t20241013_1956899.html

CNBC China’s Ministry of Finance is taking aim at local debt problems before tackling broader economic challenges
https://www.cnbc.com/2024/10/14/chinas-ministry-of-finance-tackles-debt-problems-before-economic-challenges.html

Caixin Exclusive: China May Add 6 Trillion Yuan in Treasury Bonds to Buttress Economy
https://www.caixinglobal.com/2024-10-14/exclusive-china-may-issue-6-trillion-yuan-in-treasury-bonds-to-buttress-economy-102245341.html

Reuters China's exports miss forecasts as lone bright spot fades
https://www.reuters.com/markets/asia/china-sept-export-growth-hits-5-month-low-global-demand-cools-2024-10-14/

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A big jump in jobless claims actually muddies the picture for the labor market. Meanwhile, consumer prices that many in the mainstream are claiming as sticky...are. But not for the reasons stated. We're seeing "sticky" prices in the technical sense, and that's not good. 

Eurodollar University's conversation w/Steve Van Metre 

Bloomberg Odd Lots Austan Goolsbee Explains the Fed’s Big Rate Cut
https://www.bloomberg.com/news/articles/2024-10-11/austan-goolsbee-explains-the-fed-s-big-rate-cut

Atlanta Fed Sticky Price CPI
https://www.atlantafed.org/research/inflationproject/stickyprice/

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The world’s major growth engine the past few years is showing more and worsening signs of finally cracking, including its currency hitting a record low just today. I’m not talking about the US, obviously, nor is it sickly China. India. If India has stumbled, too, as the rupee suggests, then there might be no escaping globally synchronized. 

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Bloomberg India’s Industrial Output Declines For First Time in Two Years
https://www.bloomberg.com/news/articles/2024-10-11/india-s-industrial-output-declines-for-first-time-in-two-years?srnd=phx-economics-v2

S&P Global
https://www.spglobal.com/en/research-insights/special-reports/india-forward/indias-growing-role-in-the-global-economy

HSBC India Total sales growth softens as export gains diminish
https://www.pmi.spglobal.com/Public/Home/PressRelease/8b2aeb7799e44b899c2651b5732e0878

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There is a story brewing in repo. Fails have broken a long run trend and they did it in early August. Latest data from FRBNY says that's still the case. It fits with a bunch of other data as well as brings up the ongoing unwind in the real yen carry trade. Finally, behind all of it is US recession fears driving fails, collateral, Japan's withdrawal, and more. And you don't have to take my word for it; hear it (or read it) straight from a carry trader himself. 

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Bloomberg Mizuho Buys ‘Safe’ Assets on Risk That US Soft Landing Fails
https://www.bloomberg.com/news/articles/2024-10-08/mizuho-buys-safe-assets-to-cut-damage-if-us-soft-landing-fails?srnd=phx-economics-v2

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While everyone - especially in Chinese and China-related stocks - get caught up in last month's "stimulus" frenzy, the overlooked the only real news that came out of it. Very quietly, the country's top bank regulator just casually mentioned the government was gathering a trillion yuan to "recapitalize" China's biggest six banks. Yeah. Meanwhile, volatility has hit the previously insane equity surge. 

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Bloomberg China to Add Capital at Big Banks for First Time in a Decade
https://www.bloomberg.com/news/articles/2024-09-24/china-to-boost-capital-at-mega-banks-for-first-time-in-a-decade

SCMP China weighs injecting US$142 billion of capital into top banks
https://www.scmp.com/business/china-business/article/3280008/china-weighs-injecting-us142-billion-capital-top-banks

Nikkei Asia China's state banks report more bad loans to hotels, restaurants and stores
https://asia.nikkei.com/Business/Finance/China-s-state-banks-report-more-bad-loans-to-hotels-restaurants-and-stores

Bloomberg China Markets Warn Xi That More Stimulus Is Needed to Fuel Rally
https://www.bloomberg.com/news/articles/2024-10-08/china-markets-warn-xi-that-more-stimulus-is-needed-to-fuel-rally

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Another recession warning and this one is related to brewing problems with unemployment. The September payroll report has put mainstream focus back on a soft- or no-landing scenario, but we've been there before not long ago. Meanwhile, apart from the unreliable payroll figure everything else continues to point to bigger trouble, including Americans who have stopped using their credit cards. 

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ABC News Blockbuster jobs report flexes economic strength, defying Americans' lukewarm attitudes
https://abcnews.go.com/Business/blockbuster-jobs-report-flexes-economic-strength-defying-americans/story?id=108887637

Challenger, Gray & Christmas Job Cuts Flat in September 2024 from August; YTD Surpasses 2023
https://www.challengergray.com/blog/job-cuts-flat-in-september-2024-from-august-ytd-surpasses-2023/

Robert Shimer Reassessing the Ins and Outs of Unemployment
https://home.uchicago.edu/~shimer/wp/reassess.pdf

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US economic weakness continues to show up outside the country as much as inside (last payroll estimate notwithstanding). Japan's government leading indicator just tanked, lowest value since 2020 and pointing to growing trouble in Japan. Same from Mexico and even according to one by JP Morgan. 

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Bloomberg Ueda Hints at Dovishness After New Prime Minister Urges Caution
https://www.bloomberg.com/news/articles/2024-10-02/ueda-hints-at-dovishness-after-new-prime-minister-urges-caution

S&P Global Mexico Manufacturing PMI
https://www.pmi.spglobal.com/Public/Home/PressRelease/5cbff538ec56483b8e9a77ce7c1c252e

JP Morgan Global Composite
https://www.pmi.spglobal.com/Public/Home/PressRelease/80a2d5d7d8554f7f909ba9ae30fd4016

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September's payroll estimate soared WAY above expectations. Is it a Fed miracle? This isn't the first time this has happened; in fact, each of the last two times the FOMC began cutting rates met eerily similar results. Steve and I talk about what those were and why, also why that means everything right now. 

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September 2024 Payroll Report
https://www.bls.gov/news.release/empsit.nr0.htm

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The bond rally is now one year old and it finally got to the point where central banks - including the Fed - are getting out of the way. Now that the market got what it "wants", there's no stopping it, right? Not quite. Nothing ever goes in a straight line, starting with policy pivots. The market will always surprise you. 

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There are several ways to know that the second phase for the global recession has started. While there is never a clear demarcation between any stages or just recession, for that matter, there are telltale signs and we are getting them bigtime. Summer keeps showing up as full of warnings, including one that explains everything from the economy to central bankers' increasingly panicking reaction to it. 

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Bloomberg ECB Can’t Ignore Headwinds to Economic Growth, Schnabel Says
https://www.bloomberg.com/news/articles/2024-10-02/ecb-can-t-ignore-headwinds-to-economic-growth-schnabel-says

Bloomberg ECB Momentum for an October Rate Cut Is Looking Unstoppable
https://www.bloomberg.com/news/articles/2024-10-02/ecb-momentum-for-an-october-rate-cut-is-looking-unstoppable

Bloomberg ECB Should Proceed Cautiously With Rate Cuts, Schnabel Warns
https://www.bloomberg.com/news/articles/2024-08-30/ecb-should-proceed-cautiously-with-rate-cuts-schnabel-warns

Nikkei Transcript: ECB board member Isabel Schnabel speaks with Nikkei
https://asia.nikkei.com/Editor-s-Picks/Interview/Transcript-ECB-board-member-Isabel-Schnabel-speaks-with-Nikkei

FT Lower borrowing costs risk ‘flare-up’ of inflation, warns ECB policymaker
https://www.ft.com/content/bdf3bb86-8a80-4bd5-b562-0c3c47f85f50

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The Bank of Japan's very recent change of heart has apparently been strong enough to do the same for incoming Prime Minister Shigeru Ishiba. Sounding aggressively hawkish where it came to interest rates just last week after his surprise ascent, suddenly he's completely changed his tune. Why? The answer can be found in another record low for a highly critical US$ market. 

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Bloomberg Ueda Keeps Rate Hikes in Play, Talks Down BOJ’s Part in Meltdown
https://www.bloomberg.com/news/articles/2024-08-23/boj-s-ueda-still-plans-to-hike-rates-if-economy-meets-outlook

Bloomberg Ueda Reiterates That BOJ Will Lift Rates If Outlook Realized
https://www.bloomberg.com/news/articles/2024-09-03/boj-ueda-reiterates-stance-of-lifting-rates-if-outlook-realized

The New York Times Stocks in Japan Tumble After Party’s Election of New Prime Minister
https://www.nytimes.com/2024/09/29/business/japan-stocks-nikkei-shigeru-ishiba.html

CNBC Here’s why Japan’s stocks are plunging after Shigeru Ishiba’s win
https://www.cnbc.com/2024/09/30/heres-why-japans-stocks-are-plunging-after-shigeru-ishibas-win.html

BNN Bloomberg Ishiba Ally Sends Signal to Warn BOJ Against Rate Hike Too Soon
https://www.bnnbloomberg.ca/business/international/2024/10/02/japans-ishiba-isnt-necessarily-pro-boj-hike-new-minister-says/

Bloomberg Japan’s Ishiba Rules Out BOJ Interest Rate Hikes For Now
https://www.bloomberg.com/news/articles/2024-10-02/boj-s-ueda-briefs-new-pm-ishiba-on-market-developments

Bloomberg Ueda Hints at Dovishness After New Prime Minister Urges Caution
https://www.bloomberg.com/news/articles/2024-10-02/ueda-hints-at-dovishness-after-new-prime-minister-urges-caution

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Jay Powell again reiterated that he believes the economy is "on solid footing." The most recent data on the labor market shows he's either wrong or lying. There is no equivocating these latest estimates in which hiring has collapsed. As if that wasn't enough, it was backed up by other sources. All of it pointing to summertime being the time for recession. It's all about hiring, and that has all but disappeared. 

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Bloomberg Powell Says Fed Not in a Hurry, Will Lower Rates ‘Over Time’
https://www.bloomberg.com/news/articles/2024-09-30/powell-says-fed-will-move-over-time-to-more-neutral-stance

Bloomberg Fed’s Goolsbee Sees ‘Many More’ Rate Cuts Over the Next Year
https://www.bloomberg.com/news/articles/2024-09-23/fed-s-goolsbee-sees-many-more-rate-cuts-over-the-next-year

CNN A sign of strength in the labor market: Job openings increased in August
https://www.cnn.com/2024/10/01/economy/us-jolts-job-openings-layoffs-august/index.html

ISM September 2024 Manufacturing ISM Report On Business
https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/september/

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Car stocks got clobbered as the global auto industry is heading for a major fall. There was a flood of announcements from carmakers all over the world this weekend as carmakers are facing very difficult choices. The fallout from the growing reverse will be profound given how important a rising auto market had been up to now. 

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Stellantis Updates 2024 Financial Guidance
https://www.globenewswire.com/news-release/2024/09/30/2954870/0/en/Stellantis-Updates-2024-Financial-Guidance.html

Bloomberg Stellantis Cuts Forecasts in Further Blow to Besieged Carmakers
https://www.bloomberg.com/news/articles/2024-09-30/stellantis-cuts-2024-forecast-on-costs-for-us-global-slowdown

Dow Jones Aston Martin shares fall 25% after warning blamed on supply disruptions, China
https://www.morningstar.com/news/marketwatch/2024093033/aston-martin-shares-fall-25-after-warning-blamed-on-supply-disruptions-china

Volkswagen AG updates its forecast for the 2024 financial year
https://www.volkswagen-group.com/en/ad-hoc/volkswagen-ag-updates-its-forecast-for-the-2024-financial-year-18698

The Guardian Volkswagen has ‘a year, maybe two to turn around’, financial chief warns
https://www.theguardian.com/business/article/2024/sep/04/volkswagen-has-a-year-maybe-two-to-turn-around-financial-chief-warns

Bloomberg VW’s Second Profit Warning Exposes a Carmaker in Decline
https://www.bloomberg.com/news/articles/2024-09-30/volkswagen-s-second-profit-warning-exposes-a-carmaker-in-decline

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Now that everyone is coming to grips with economic weakness, particularly where it comes to employment conditions, understanding the high potential for a lot more or worse, people are trying to figure out where it is coming from therefore what might be done to turn it all around. Did the Fed break the economy? Are employers worried about the next President? 

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Americans continue to say they're alarmed about job prospects. That's what consumer confidence is truly about, not consumer spending. Workers see and understand labor market shifts before they show up in the major data sources. The latest income data show there is every reason to believe what consumers are seeing. 

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Conference Board September 2024
https://www.conference-board.org/topics/consumer-confidence/press/CCI-Sep-2024

FRBNY Consumer Confidence: A Useful Indicator of . . . the Labor Market?
https://libertystreeteconomics.newyorkfed.org/2013/09/consumer-confidence-a-useful-indicator-of-the-labor-market/

FRBNY Survey of Consumer Expectations
https://www.newyorkfed.org/microeconomics/sce#/earnuncert-1

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Not content to leave it with the PBOC's Oprah-fest of rate cutting, China's central authorities announced what's being called a massive stimulus push. The response has been near-euphoria in Chinese and other stocks, but the opposite in more crucial markets and places. All the more curious given how much other "stimulus" is being offered around the world, central bank rate cuts that are accelerating. 

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The Political Bureau of the CPC Central Committee held a meeting to analyze and study the current economic situation and economic work.
https://www.gov.cn/yaowen/liebiao/202409/content_6976686.htm

Reuters Exclusive: China to issue $284 billion of sovereign debt this year to help revive economy
https://www.reuters.com/markets/asia/china-issue-284-bln-sovereign-debt-this-year-help-revive-economy-sources-say-2024-09-26/

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It's not just USTs. Rates are falling all over the world faster in shorter maturities than long. That means a global wave of un-inversions and bull steepening right as more and more central banks plan to accelerate their own rate cutting. All of it for the same reason. Globally synchronized.

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NBB Is a recession imminent? The signal of the yield curve
https://www.nbb.be/doc/ts/publications/economicreview/2019/ecorevi2019_h4.pdf

Bloomberg Riksbank Cuts Rate Again and Opens Door to Half-Point Move
https://www.bloomberg.com/news/articles/2024-09-25/riksbank-cuts-rate-a-quarter-point-and-opens-door-to-bigger-move

Chinese authorities held a surprise press conference early this morning where PBOC Governor Pan Gongsheng did his best Oprah Winfrey impression handing out rate cuts to practically everyone. All that does is further expose the gravity of the situation: the more the central bank or any authority does, the worse you know it is since rate cuts never work. China just announced a lot of them. 

Eurodollar University's Money & Macro Analysis

Bloomberg China Unleashes Stimulus Package to Revive Economy, Markets
https://www.bloomberg.com/news/articles/2024-09-24/china-frees-banks-to-lend-more-cuts-key-interest-rate

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More confirmation that recession is coming back with a vengeance in Europe. The latest data indicates the dangers this time around including jobs and layoffs. This situation in Europe is hardly unique. This is why central bankers are out in force downplaying their own rate cuts; to the point a few policymakers are outright lying why they voted for them.  

Eurodollar University's Money & Macro Analysis

Bloomberg Fed’s Waller Says Slowing Inflation Led Him to Support Large Rate Cut
https://www.bloomberg.com/news/articles/2024-09-20/waller-says-slowing-inflation-led-him-to-support-large-rate-cut

Bloomberg Fed’s Kashkari Says Interest-Rate Hikes Not Entirely Ruled Out
https://www.bloomberg.com/news/articles/2024-05-28/fed-s-kashkari-says-rate-hike-not-entirely-ruled-out

Bloomberg Fed’s Neel Kashkari Expects Two Quarter-Point Cuts Before Year’s End
https://www.bloomberg.com/news/articles/2024-09-23/neel-kashkari-backed-fed-s-large-cut-and-another-half-point-this-year

Bloomberg Fed’s Bostic Says He Now Might Favor More Than One 2024 Cut
https://www.bloomberg.com/news/articles/2024-08-23/fed-s-bostic-says-he-now-might-favor-more-than-one-cut-this-year

Atlanta Fed On the State of the US Economy and Monetary Policy
https://www.atlantafed.org/news/speeches/2024/09/23/bostic--on-the-state-of-the-us-economy-and-monetary-policy

S&P Global  S&P Global Flash US Composite PMI September 2024
https://www.pmi.spglobal.com/Public/Home/PressRelease/35c60149cdbe461fb6bc3c959a58a551

S&P Global/Hamburg Commercial Bank HCOB Flash Eurozone PMI September 2024
https://www.pmi.spglobal.com/Public/Home/PressRelease/cf25d7bb494046ae9256a00ca028f09a

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The Fed just cut its benchmark rate by 50-bps even though jobless claims are among the lowest in their history. At the same time, CPI shelter prices have accelerated. Neither seems like it would warrant the Fed action yet there are good reasons to believe true unemployment is very different from claims and current market rents are plunging. 

Eurodollar University's conversation w/Steve Van Metre

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FedEx's CEO admitted some truth about the Fed's rate cut this week, and the stock was immediately punished for it, dropping 15% on Friday. This raises a bunch of questions, starting with: what happens to stocks in general when the Fed cuts rates? The answer is not what you think.

Eurodollar University's Money & Macro Analysis

CNBC FedEx quarterly profit disappoints as demand for speedy delivery wanes
https://www.cnbc.com/2024/09/19/fedex-reports-drop-in-quarterly-earnings-on-lower-demand-for-priority-services.html

Robert Shiller 2013 Nobel Speculative Asset Prices
https://www.nobelprize.org/uploads/2018/06/shiller-lecture.pdf

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Now that the Fed has done it, everyone wants to get in on the act. They call it "undershooting" which is just a fancy word for "bonds were right." Switzerland, Canada, even the Europeans all thinking hefty and accelerated schedules. Leave it to the Brits to be the lone exception. 

Eurodollar University's Money & Macro Analysis

Bloomberg Bank of Canada Officials Split on Balance of Inflation Risks
https://www.bloomberg.com/news/articles/2024-09-18/bank-of-canada-officials-are-split-on-balance-of-inflation-risks

Bloomberg Swiss Government Sees Sharp Drop in Inflation Rate Next Year
https://www.bloomberg.com/news/articles/2024-09-19/swiss-government-sees-sharp-drop-in-inflation-rate-next-year

Bloomberg Swiss Economists See ‘Substantial’ Chance of SNB Half-Point Cut
https://www.bloomberg.com/news/articles/2024-09-19/swiss-economists-see-sustantial-chance-of-snb-half-point-cut

Politico EU Portuguese bank chief: ECB may need to accelerate interest rate cuts
https://www.politico.eu/article/mario-centeno-ecb-may-need-accelerate-easing-interest-rate-date-bank-portugal/

ZEW Hopes of a Recovery Are Fading
https://www.zew.de/en/press/latest-press-releases/hopes-of-a-recovery-are-fading

Bloomberg Germany May Already Be in Mild Recession, Bundesbank Says
https://www.bloomberg.com/news/articles/2024-09-19/germany-may-already-be-in-mild-recession-bundesbank-says

Euronews US chip-maker Intel has announced plans to postpone the construction of a factory in Germany for at least two years.
https://www.euronews.com/business/2024/09/17/intel-postpones-construction-of-german-chip-factory-for-two-years

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The Fed cut its benchmark rates by 50 bps in a panicky move to catch up to both the economy and the marketplace. Reaction in the latter was muted because this wasn't unexpected. All the FOMC did was confirm everything - and then deny that it did. 

Eurodollar University's Money & Macro Analysis

Bloomberg Fed Minutes Show Officials Rally Around Higher-for-Longer Rates
https://www.bloomberg.com/news/articles/2024-05-22/minutes-show-officials-rallying-around-higher-for-longer-rates

FOMC September statement
https://www.federalreserve.gov/monetarypolicy/files/monetary20240918a1.pdf

FOMC September projections
https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240918.pdf

FOMC June projections
https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240612.pdf

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People imagine a recession is when masses of people are being laid off and so consumer spending isn't just negative, it must be crashing. While those can happen in a downturn, they tend to show up at the end. So, if you're waiting for those to make a determination you'll be way too late. Evidence consistently and conclusively shows hiring not firing creates the recession environment that is marked by a drop in real spending. We have both.

Eurodollar University's Money & Macro Analysis

Robert Shimer Reassessing the Ins and Outs of Unemployment∗
https://home.uchicago.edu/~shimer/wp/reassess.pdf

Challenger, Gray & Christmas Job Cuts Announced by US-Based Companies Surge in August 2024; Hiring Falls to Lowest YTD Since Challenger Began Tracking in 2005
https://www.challengergray.com/blog/job-cuts-announced-by-us-based-companies-surge-in-august-2024-hiring-falls-to-lowest-ytd-since-challenger-began-tracking-in-2005/

NYT Layoffs Are Few. So Why Are Jobs Harder to Find?
https://www.nytimes.com/2024/09/12/business/economy/layoffs-jobs-economy.html

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Americans' hopes and dreams of better opportunities have utterly crashed and burned over the past five months. This isn't about more price increases, rather how those in the past have combined with recession prospects to rob the future. The 2020s have taken the worst aspect of the 2010s and added more trouble on top. 

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Larry Summers The Age of Secular Stagnation
https://larrysummers.com/2016/02/17/the-age-of-secular-stagnation/

Larry Summers IMF Accepting Secular Stagnation
https://www.imf.org/en/Publications/fandd/issues/2020/03/larry-summers-on-secular-stagnation

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Consumers can't afford groceries, so how is a lower reverse repo rate going to help them? Now that it is settled the Fed will cut rates next week, everyone wants to know by how much. The real story is what's behind the cuts in the first place and what that means for financial markets as well as the economy. It isn't the murder hornet rate. 

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Authorities in China continue to do everything they can to derail the country's globally synchronized bond rally. It continues to hit record low yields anyway in spite of increasingly desperate government efforts. But why? More ugly data on banks, incomes, and Chinese jobs shows bonds are right, and not just about what's already happened to this point. 

Eurodollar University's Money & Macro Analysis

China Xinhua Xi Jinping presided over a symposium on comprehensively promoting ecological protection...
https://www.gov.cn/yaowen/liebiao/202409/content_6974190.htm

Bloomberg Xi Urges Efforts to Hit 5% Growth Target Amid Rising Doubts
https://www.bloomberg.com/news/articles/2024-09-12/xi-urges-efforts-to-hit-annual-growth-target-amid-rising-doubt

Bloomberg PBOC’s China Bonds See Trading Surge in Sign of Intervention
https://www.bloomberg.com/news/articles/2024-09-10/pboc-owned-china-bonds-see-trading-surge-in-sign-of-intervention

Bloomberg China’s Deflationary Spiral Is Now Entering Dangerous New Stage
https://www.bloomberg.com/news/articles/2024-09-09/china-s-deflationary-spiral-is-now-entering-dangerous-new-stage

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The ECB cut rates for the second time, as expected, though amidst a strong bond/bund market rally that has now completely un-inverted that yield curve. This comes at a time when major businesses like Volkswagen are thinking about closing down factories due to how much idle capacity they have. What links all of these together, what explains all the facts, is that there was never a global recovery, only a transitory price illusion. 

Eurodollar University's Money & Macro Analysis

Bloomberg Half-Empty Car Plants in Europe Spell Trouble for Workers
https://www.bloomberg.com/news/articles/2024-09-11/vw-s-german-factory-closures-highlight-wider-problems-for-europe-s-carmakers?srnd=phx-economics-v2

Volkswagen 2023 Annual Report Income Statement
https://annualreport2023.volkswagen-group.com/consolidated-financial-statements/income-statement.html

Volkswagen 2019 Annual Report
https://annualreport2019.volkswagenag.com/

ECB Press Conference Statement
https://www.ecb.europa.eu/press/press_conference/monetary-policy-statement/2024/html/ecb.is240912~4f7b17040c.en.html

Bloomberg ECB’s Economic Hopes at Risk as Consumers Put Spending on Ice
https://www.bloomberg.com/news/articles/2024-09-09/ecb-s-economic-hopes-at-risk-as-consumers-put-spending-on-ice

Statista Half of OECD Countries Earn Less Now Than Pre-Pandemic
https://www.statista.com/chart/32831/real-wage-growth-in-the-oecd/

OECD Employment Outlook 2024
https://www.oecd.org/en/publications/oecd-employment-outlook-2024_ac8b3538-en.html

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It was all banks all day yesterday. Basel rules foul-up. Warren Buffett continuing to dump BofA. Citi dumping on credit. Deutsche unloading CRE, or trying to. JP Morgan downgrading...itself. Most of all Ally Financial admitting unemployment is fast becoming a big problem and right on its balance sheet. 

Eurodollar University's Money & Macro Analysis

Bloomberg JPMorgan Leads Banks in Dimming Outlooks, Spoiling Win on Rules
https://www.bloomberg.com/news/articles/2024-09-10/jpmorgan-leads-banks-in-dimming-outlooks-spoiling-win-on-rules

Bloomberg Ally Drops After CFO Flags Consumer Stress, Underperformance
https://www.bloomberg.com/news/articles/2024-09-10/ally-drops-after-cfo-flags-consumer-stress-underperformance

Bloomberg Consumers Shift Spending to Pay for Basic Staples, Citi CFO Says
https://www.bloomberg.com/news/articles/2024-09-09/consumers-shift-spending-to-pay-for-basic-staples-citi-cfo-says

FRBNY Household Debt and Credit Report
https://www.newyorkfed.org/microeconomics/hhdc.html

CNBC Berkshire unloads another chunk of Bank of America as CEO Moynihan lauds Buffett as great shareholder
https://www.cnbc.com/2024/09/11/berkshire-unloads-another-chunk-of-bank-of-america-as-ceo-moynihan-lauds-buffett-as-great-shareholder.html

Bloomberg Deutsche Bank Is Unloading $1 Billion in US Real Estate Loans
https://www.bloomberg.com/news/articles/2024-08-01/deutsche-bank-is-unloading-1-billion-in-us-real-estate-loans

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There's no September here as interest rates continue to plunge. The two-year UST is at a record low relative to the Fed. In the past when the two-year has dropped like this it has meant nothing good. Combined with the still ongoing crash in energy prices, we have a solid sense of what's coming next. And it isn't just a lot of rate cuts. 

Eurodollar University's Money & Macro Analysis

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Bloomberg S&P 500 Rally Hits a Wall as Big Banks Sound Alarm: Markets Wrap
https://www.bloomberg.com/news/articles/2024-09-09/stock-market-today-dow-s-p-live-updates

FOMC Transcript Conference Call January 3, 2001
https://www.federalreserve.gov/monetarypolicy/files/FOMC20010103ConfCall.pdf

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Interest rates continue to collapse in China even outpacing US Treasuries. Commodities are being crushed as prospects for the world's two largest economies are getting worse by the week; by the day. Over the weekend, the Chinese reported negatives in consumer and more so producer prices, adding more evidence to what is shaping up in bond markets and beyond as a looming deflation shock. 

Eurodollar University's Money & Macro Analysis

Bloomberg China’s Deflationary Spiral Is Now Entering Dangerous New Stage
https://www.bloomberg.com/news/articles/2024-09-09/china-s-deflationary-spiral-is-now-entering-dangerous-new-stage

Wall Street Journal Australian Economy Posts Weakest Growth Since Early 1990s
https://www.wsj.com/economy/australian-economy-posts-weakest-growth-since-early-1990s-a7f5d6b0?tpl=cb

China's NBS Consumer Prices August 2024
https://www.stats.gov.cn/sj/zxfb/202409/t20240909_1956311.html

China's NBS Producer/Factory Gate Prices August 2024
https://www.stats.gov.cn/sj/zxfb/202409/t20240909_1956310.html

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We know there are Fed rate cuts coming in September and that there is very good chance it will be 50 bps. Could policymakers also surprise by ending QT (not that it matters)? Might that be a first step toward the next QE? It's not as far-fetched as you may think; after all, some at the Fed were talking rate hikes just two months ago. 

Eurodollar University's conversation w/Steve Van Metre

Bloomberg Fed’s Waller Says Jobs Data ‘Requires Action,’ Open to Big Cut
https://www.bloomberg.com/news/articles/2024-09-06/fed-s-waller-says-jobs-data-requires-action-open-to-big-cut?

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More meltdowns across key markets, starting with the Treasury curve rapidly unwinding. Commodities are getting crushed, gasoline absolutely smoked. Swaps. Yen. The August payroll report only further confirmed the reasons why all this is happening. 

Eurodollar University's Money & Macro Analysis

Bloomberg OPEC+ Pauses Oil Supply Hike in Effort to Reverse Price Slump
https://www.bloomberg.com/news/articles/2024-09-05/opec-has-deal-to-pause-planned-oil-hike-for-2-months-delegate

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Politicians always feel the need to do something even if they don't know why or what's actually wrong. That's all "price controls" really are since they sure don't control anything like prices. Unknown to most people, the US has already experimented with them running price and wage restrictions for several years. The results are conclusive. 

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Robert Bleiberg Farewell to Wage and Price Controls
https://imprimis.hillsdale.edu/farewell-to-wage-and-price-controls-july-1974/

Richard Nixon August 15, 1971 TV address
https://www.youtube.com/watch?v=7_Xw5tWsOQo
https://www.cvce.eu/content/publication/1999/1/1/168eed17-f28b-487b-9cd2-6d668e42e63a/publishable_en.pdf

Arthur Burns Testimony before Congress Joint Economic Committee June 1971
https://fraser.stlouisfed.org/files/docs/historical/burns/Burns_19710630.pdf?utm_source=direct_download

Arthur Burns Testimony before Congress Joint Economic Committee July 1971
https://fraser.stlouisfed.org/files/docs/historical/burns/Burns_19710723.pdf?utm_source=direct_download

NYT NIXON FREEZES PRICES FOR UP TO 60 DAYS, THEN WILL ESTABLISH PHASE 4 CONTROLS; FARM PRICES, WAGES, RENTS UNAFFECTED
https://www.nytimes.com/1973/06/14/archives/nixon-freezes-prices-for-up-to-60-da-ys-then-will-establish-phase-4.html

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Carry trade is back! In reality, it never left. Not because of BoJ rates hikes or threats, rather all the growing evidence the US isn't at risk of recession, so many indications showing it's here. Oil and gasoline are crashing. Curves unwinding. Forward rates project...a total mess. In time for all of the fun, JOLTS shows job openings plunge and layoffs jump.

Eurodollar University's Money & Macro Analysis

CNBC Job openings fell more than expected in July in another sign of labor market softening
https://www.cnbc.com/2024/09/04/jolts-july-2024.html

CNBC Nikkei sees worst day since early August sell-off; Taiex leads losses in Asia as tech stocks fall
https://www.cnbc.com/2024/09/04/asia-pacific-markets-set-to-fall-after-recession-fears-heighten-nvidia-tumbles.html

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While the world was focused on financial volatility and liquidations at the start of August, something odd happened at the Federal Reserve's Discount Window (DW). Given everything else that has gone on since then, starting with the yield curve then considering now-cracking commodities, plus foreigners' dollar buffers and even US dealer banks' collateral holdings, there aren't that many ways to interpret what banks are doing - or not - at the DW.

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FRB Michael Barr The Importance of Effective Liquidity Risk Management
https://www.federalreserve.gov/newsevents/speech/barr20231201a.htm

Reuters Discount window reform bill introduced as Fed works on its own overhaul
https://www.reuters.com/markets/discount-window-reform-bill-introduced-fed-works-its-own-overhaul-2024-07-29/

FRBNY Staff Report 1103 Can Discount Window Stigma Be Cured? An Experimental Investigation
https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr1103.pdf?sc_lang=en

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Wholesale gasoline prices plunged in August to their lowest since the start of the year. This sounds like a positive, both for consumers as well as Fed policymakers and the disinflationary impact on consumer prices. But refinery margins have crashed to their lowest in three and a half years which instead points to more and bigger trouble. 

Eurodollar University's Money & Macro Analysis

CNBC Oil prices ease on US gasoline demand worries, economic data
https://www.cnbc.com/2024/05/29/oil-rises-as-major-producers-expected-to-keep-output-cuts-in-place.html

The Globe & Mail Crude Prices Fall on Energy Demand Concerns and Increased Russian Crude Exports

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The most significant macro data from the past week certainly wasn't GDP (it wasn't even the most important datapoint within its own series), instead it was personal savings. It is yet another confirmation of what we've been hearing from across the economy and markets. Consumers are tapped out, and they're out of money because of jobs and incomes.

Eurodollar University's conversation w/Steve Van Metre

BLS Metropolitan Area Employment and Unemployment (Monthly)
https://www.bls.gov/web/metro.supp.toc.htm

BLS Over-the-year percent change in total private average weekly earnings for metropolitan areas, not seasonally adjusted
https://www.bls.gov/charts/metro-area-employment-and-unemployment/metro-area-oty-percent-change-in-average-weekly-earnings.htm

Challenger, Gray, & Christmas Challenger Report: Job Cuts Remain Low While Hiring Falls to Lowest YTD Since 2012
https://www.challengergray.com/blog/challenger-report-job-cuts-remain-low-while-hiring-falls-to-lowest-ytd-since-2012/

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People keep saying the economy is in the toilet and the  US government keeps raising its estimate for GDP. The general public isn't wrong, GDP is. How do we know? Because that's what GDP says - its other side. Not as well known, it should be because this is the one which is far more accurate during cyclical downturns. History, academic studies, consistency with other signals, not to mention how much it backs up popular perception. Everything including the better side of GDP is lined up against GDP. 

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Jeremy Nalewaik Board of Governors of the Federal Reserve System
The Income- and Expenditure-Side Estimates of U.S. Output Growth 
https://www.brookings.edu/wp-content/uploads/2010/03/2010a_bpea_nalewaik.pdf

CNBC Dollar General shares crater 25% as retailer cuts outlook, blaming ‘financially constrained’ customers
https://www.cnbc.com/2024/08/29/dollar-general-shares-crater-20percent-as-retailer-cuts-outlook-blaming-financially-constrained-customers.html

CNBC Lululemon cuts guidance, misses sales estimates after botched product launch
https://www.cnbc.com/2024/08/29/lululemon-lulu-earnings-q2-2024.html

Morningstar Lululemon Earnings: Near-Term Outlook Dims, but Profitability and Underlying Brand Strength Hold
https://www.morningstar.com/stocks/lululemon-earnings-near-term-outlook-dims-profitability-underlying-brand-strength-hold

UBS “Vibecession”? - The paradox between hard data and sentiment
https://www.ubs.com/us/en/wealth-management/insights/market-news/article.1608955.html

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New information from various sources all around the US service sector shows a downturn taking hold in that segment with employment signals turning more and more negative. It confirms the ongoing and more decisive bull steepening continuing to take shape in the Treasury market. Even mainstream sources are having to cover the fact there is something big happening when you can see it in services.

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CNN A key part of America’s economy has shifted into reverse
https://www.cnn.com/2024/07/07/economy/stocks-week-ahead-services-sector-slow-restaurants-stores/index.html

FRB Philadelphia August 2024 Nonmanufacturing Business Outlook Survey
https://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/nbos-2024-08

Fifth District Survey of Service Sector Activity
https://www.richmondfed.org/region_communities/regional_data_analysis/surveys/service_sector

Texas Service Sector Outlook Survey
https://www.dallasfed.org/research/surveys/tssos/2024/2408

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German observers are saying the economy has reached crisis proportions and the reason is what the US economy's weakness is doing to the rest of the world. Rather than recover as many in Europe had hoped, the situation has turned grim due to America's growing negatives. As one result, bulls are firmly in charge of all the curves.

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IFO Business Climate Index deteriorates (August 2024)
https://www.ifo.de/en/facts/2024-08-26/ifo-business-climate-index-deteriorates-august-2024

Dow Jones German business increasingly in trouble, Ifo survey finds
https://www.morningstar.com/news/marketwatch/2024082620/german-business-increasingly-in-trouble-ifo-survey-finds

WSJ German Economic Expectations Nosedive as Global Slowdown Fears Bite
https://www.wsj.com/economy/central-banking/german-economic-expectations-nosedive-as-global-slowdown-fears-bite-944996b5

S&P Global/HCOB Germany PMIs August 2024
https://www.pmi.spglobal.com/Public/Home/PressRelease/3c59ed1870c24259ac3e62cfb7792724

deStatis Germany June Trade
https://www.destatis.de/EN/Press/2024/08/PE24_300_51.html

Bundesbank Forecast for Germany: German economy slowly regaining its footing
https://www.bundesbank.de/en/press/press-releases/bundesbank-forecast-for-germany-german-economy-slowly-regaining-its-footing-933658

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Chinese e-commerce retailer Temu becomes the latest global consumer business to warn about the economy - exactly what bonds have been doing all year much to the growing frustration of authorities. They'd rather derail lower market rates at the same time as cutting their own? It actually does make a lot of sense as all these things are related.

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Bloomberg PDD’s Warning Highlights Growing Strain on China Consumer Firms
https://www.bloomberg.com/news/articles/2024-08-27/pdd-s-warning-highlights-growing-strain-on-china-consumer-firms

CNBC Shares of Temu parent company PDD plunge almost 29%
https://www.cnbc.com/2024/08/27/shares-of-temu-parent-company-pdd-plunges-29percent-largest-one-day-loss.html

Bloomberg China Economists See Weak Demand Despite Expected Rate Cuts
https://www.bloomberg.com/news/articles/2024-08-26/china-seen-mired-in-weakening-demand-despite-expected-rate-cuts?srnd=phx-economics-v2

Bloomberg PBOC Holds Policy Rate Steady After Warning on Bond Rally
https://www.bloomberg.com/news/articles/2024-08-26/pboc-holds-policy-loan-rate-steady-after-warning-on-bond-rally?srnd=phx-economics-v2

Bloomberg China Won’t Ban Bond Trading But Sees Risk in Buying Frenzy
https://www.bloomberg.com/news/articles/2024-08-24/china-won-t-ban-bond-trading-but-sees-risk-in-buying-frenzy

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Just as low interest rates are being validated in every way, some Economists like Nouriel Roubini are alleging that yields are instead being held down by noted monetary genius Janet Yellen who has the Treasury Department engaged in a form of stealth QE. The problem is actually Economists who think interest rates are nothing more than tools to be manipulated by all-powerful govts when in reality they are more accurate though not perfect reflections of how govts fail.

Eurodollar University's Money & Macro Analysis

Roubini/Miran Hudson Bay Capital  ATI: Activist Treasury Issuance and the
Tug-of-War Over Monetary Policy
https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/635102_Activist_Treasury_Issuance_-_Hudson_Bay_Capital_Research.pdf

FT People are flipping out about T-bill issuance
https://www.ft.com/content/f0f62f0b-fee2-463a-a075-3b8dab333f40

TBAC Fiscal Year 2023 Q3 Report
https://home.treasury.gov/system/files/221/TreasuryPresentationToTBACQ32023.pdf

TBAC April 30, 2024
https://home.treasury.gov/system/files/221/TBACCharge1Q22024.pdf

CNN 'Dr. Doom' explains why the Fed will lose its inflation battle
https://www.cnn.com/videos/business/2022/10/19/nouriel-roubini-markets-now.cnn-business

Bloomberg Roubini Sees Significant Chance of ‘No Landing’ for US Economy
https://www.bloomberg.com/news/articles/2024-03-04/roubini-sees-significant-chance-of-no-landing-for-us-economy

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Jay Powell's Jackson Hole appearance and speech wasn't really about rate cuts. It was a sales job trying to sell you and as much of the world as possible on the Fed itself. Just making the pitch, however, means implicitly admitting the US economy just leapt out of the frying pan and into the fire. Powell says it's OK because he knows how to turn the heat down when there is zero reason to believe anyone at the FOMC knows where it is us or what the temperature is going to be. 

Eurodollar University's conversation w/Steve Van Metre

Jay Powell Jackson Hole
https://www.federalreserve.gov/newsevents/speech/files/powell20240823a.pdf

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It wasn't just a pivot, Powell admits the US economy is in trouble as unemployment has already started rising. While that's it's own can of worms, there are also more monetary and financial considerations related to what happened early in August. CLOs, collateral, stock market liquidations, all tied to what the Fed just agreed to. 

Eurodollar University's Money & Macro Analysis

EDU YT Japan is buying MASSIVE Amounts of Junk Credit
https://www.youtube.com/watch?v=_a_2J6mU48o

CNBC Jay Powell Jackson Hole
https://www.youtube.com/watch?v=zpiMF6bZ0sg

Text of Powell Speech
https://www.federalreserve.gov/newsevents/speech/powell20240823a.htm

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The economy really has deteriorated quickly, enough that what seemed highly unlikely if not impossible early in July was very near to happened at the end of the month. I said a July Fed rate cut was in play on the 3rd and now according to the FOMC's minutes...it was. That, along with panicky central bankers seeking to quicken the pace of cutting, is definitely not a good sign. 

Eurodollar University's Money & Macro Analysis

EDU YT This Could Force the Fed to Cut Rates in July
https://www.youtube.com/watch?v=B03jMrfetks

 Pascal Michaillat, Emmanuel Saez Has the Recession Started? August 2024
https://pascalmichaillat.org/16.pdf

FOMC July 2024 minutes
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20240731.pdf

Politico Sharp slowdown in wage growth boosts ECB rate cut hopes
https://www.politico.eu/article/big-slowdown-in-wages-boosts-ecb-rate-cut-hopes/

Bloomberg ECB’s Rehn Says Growth Risks Bolster Case for September Cut
https://www.bloomberg.com/news/articles/2024-08-19/ecb-s-rehn-says-growth-risks-bolster-case-for-september-cut

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Was Macy's the latest victim of the strong labor market? That doesn't make sense, of course, and now the government data has been revised massively lower to better align what really happened last year with where we are this year. The new figures show not just one-third fewer jobs gained, more importantly what that does the rate of change in the rate of change (2nd derivative). It ends up in Macy's sales forecast.

Eurodollar University's Money & Macro Analysis

CNBC Macy’s cuts sales forecast as department stores struggle to draw shoppers
https://www.cnbc.com/2024/08/21/macys-m-q2-2024-earnings.html

Macy's Quarterly Results
https://www.macysinc.com/newsroom/news/news-details/2024/Macys-Inc.-Reports-Second-Quarter-2024-Results/default.aspx

BLS QCEW Home
https://www.bls.gov/cew/

BLS QCEW CES Preliminary Benchmark Announcement
https://www.bls.gov/web/empsit/cesprelbmk.htm

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Gold jumped to another record high at the same time stocks are back closing in on theirs. Only two weeks after global financial chaos that has everyone wondering where things are heading, the implications of each could not be more different. So, where does everything else stack up? Is it just gold vs equities?

Eurodollar University's Money & Macro Analysis

Reuters Gold extends record rally on dollar weakness, rate-cut bets
https://www.reuters.com/markets/commodities/gold-steady-near-record-high-investors-seek-more-fed-cues-2024-08-20/

Bloomberg S&P 500’s Furious ‘Momentum Rally’ Takes a Break: Markets Wrap
https://www.bloomberg.com/news/articles/2024-08-19/stock-market-today-dow-s-p-live-updates

CNBC U.S. crude oil falls nearly 3% as U.S. pushes for Gaza cease-fire, China demand weighs on market
https://www.cnbc.com/2024/08/19/crude-oil-prices-today.html

Bloomberg Diesel Demand Hits 26-Year Seasonal Low in US on Slowing Economy
https://www.bloomberg.com/news/articles/2024-05-31/diesel-demand-hits-26-year-seasonal-low-in-us-on-slowing-economy

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Economists and officials therefore the financial media continue to downplay the plunge in US consumer confidence, repeatedly referring to it as a "vibe-cession" that doesn't fit with the current data or modeled forecasts. History, common sense, and even econometric math isn't on their, or the data's, side. All of those say unemployment is about to surge.

Eurodollar University's Money & Macro Analysis

Washington Post Why We're Gloomier Than The Economy
https://www.washingtonpost.com/wp-dyn/content/article/2008/06/17/AR2008061702463_pf.html

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Revisions are a normal part of high frequency data. Constant, near-exclusive downward revisions are not. Rewrites should be more evenly distributed which means these stats are overstating the economy. Plus, the problem is spreading hitting retail sales and IP as well as payrolls. While everyone went nuts over retail sales, the problem with July's number isn't just the likely downward revision.

Eurodollar University's conversation w/Steve Van Metre

Bloomberg Fed’s Goolsbee Says He’s Growing More Concerned About Employment
https://www.bloomberg.com/news/articles/2024-08-14/fed-s-goolsbee-says-he-s-growing-more-concerned-about-employment

Bloomberg Manufacturers Axe Products as a Factory Slowdown Lingers
https://www.bloomberg.com/news/newsletters/2024-08-16/rockwell-rok-xylem-xyl-axe-products-as-factory-slowdown-deepens

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Financial volatility. Recession conditions. Lower growth and inflation. The rate cuts are still coming. So, that means interest rates around the world are about to go...UP? The fundamentals haven't changed - the calendar has. 

Eurodollar University's Money & Macro Analysis

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Steel prices are plunging, down a quarter since May at lows not seen since 2016. The chairman of the world's largest producer just said he expects it to get much worse in terms of prices and for industry. The implications are far broader than steel or China. 

Eurodollar University's Money & Macro Analysis

Bloomberg World’s Biggest Steel Producer Warns of ‘Severe’ Industry Crisis
https://www.bloomberg.com/news/articles/2024-08-14/china-steel-industry-in-crisis-as-baowu-warns-of-severe-winter

Bloomberg ArcelorMittal Cries Foul on Steel Exports From China
https://www.bloomberg.com/news/articles/2024-08-01/arcelormittal-cries-foul-on-china-steel-exports-as-profit-falls

Bloomberg Iron Ore Takes Fresh Hit as Concerns Over Global Glut Exact Toll
https://www.bloomberg.com/news/articles/2024-08-12/iron-ore-in-retreat-as-concerns-over-global-surplus-take-toll

S&P Global China's steel output remains strong; downstream outlook still dim
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/metals/071524-chinas-steel-output-remains-strong-downstream-outlook-still-dim

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This was supposed to be all about "inflation" and instead everything is coming up jobs - including the latest CPI report. From Home Depot's most recent admission to now US refiners taking drastic steps to avoid getting caught with an energy glut (yep, that's right), the entire economy flipped from "sticky inflation" to Uh-Oh over employment. 

Eurodollar University's Money & Macro Analysis

Bloomberg It’s Inflation Week in the US. But Everyone’s Talking About Jobs
https://www.bloomberg.com/news/newsletters/2024-08-12/fed-rate-cuts-it-s-us-inflation-week-and-everyone-s-talking-jobs

Home Depot 
https://corporate.homedepot.com/news/earnings/home-depot-announces-second-quarter-2024-earnings

CNBC Home Depot expects sales to weaken as consumers grow more cautious
https://www.cnbc.com/2024/08/13/home-depot-hd-q2-2024-earnings.html

Bloomberg Oil Refiners in US Slow Down, Stoking Global Crude Glut Worries
https://www.bloomberg.com/news/articles/2024-08-11/oil-refiners-in-us-slow-down-stoking-global-crude-glut-worries

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While the world was distracted by US recession provoking a Japanese stock market crash, China was continuing to meltdown. In just the past few days the country reported: a record drop in foreign money fleeing China; the first contraction in bank lending to the real economy in nineteen years; record low market interest rates; and the PBOC going off the rails trying to derail that bond rally. And we thought China was in rough shape...last month. 

Eurodollar University's Money & Macro Analysis

Bloomberg China Goes to New Extreme in Crackdown on Bond-Market Frenzy
https://www.bloomberg.com/news/articles/2024-08-13/china-goes-to-new-extremes-in-crackdown-on-bond-market-frenzy

Bloomberg China Regulators Tell Some Rural Banks to Renege on Bond Trades
https://www.bloomberg.com/news/articles/2024-08-12/china-regulators-tell-some-rural-banks-to-renege-on-bond-trades

Bloomberg China Brokers Curb Bond Trading Amid PBOC Warnings on Rally
https://www.bloomberg.com/news/articles/2024-08-12/chinese-brokers-curb-bond-trading-amid-warnings-on-rally

Bloomberg China Asked State Banks to Keep Record of Government Bond Buyers
https://www.bloomberg.com/news/articles/2024-08-09/china-s-state-banks-asked-to-record-buyers-of-government-bonds

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How in the world does sudden fear over a US recession lead to a crash in Japanese stocks? Even more important, what might that crash suggest about the US recession? Our world is more interconnected than you've been led to believe. Our entire economic worldview is oriented around national groupings not because that’s the way the world works but because it keeps central bankers in a job. What globally synchronized is telling us now is that job losses are going to painfully rise - ours, not theirs. 

Eurodollar University's Money & Macro Analysis

Bank of Japan New Procedures for Money Market Operations and Monetary Easing
https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2001/k010319a.htm

World Bank Research Paper Global Recessions
https://documents1.worldbank.org/curated/en/185391583249079464/pdf/Global-Recessions.pdf

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After a chaotic, somewhat panicky prior week, the talking points went out with a clear aim to restore calm. That meant downplaying every last concerning development, starting with Jeremy Siegel. Sure enough, he played along and on it went from there. Even Fed officials know what's coming yet they'll keep denying anything's wrong right up until the first emergency meeting rate cut. 

Eurodollar University's conversation w/Steve Van Metre

CNBC Jeremy Siegel backs off on calls for the Fed to do an emergency interest rate cut
https://www.cnbc.com/2024/08/08/jeremy-siegel-backs-off-on-calls-for-fed-to-do-an-emergency-rate-cut.html

Bloomberg Barkin Says Economy Healthy With Key Questions Around Job Market
https://www.bloomberg.com/news/articles/2024-08-03/barkin-says-economy-healthy-with-key-questions-around-job-market

Bloomberg Layoffs Are a Last Resort Looming for More US Companies
https://www.bloomberg.com/news/articles/2024-08-08/us-edges-towards-layoffs-as-job-market-cools-fed-rates-pressure-firms

Bloomberg Layoffs Are a Last Resort Looming for More US Companies
https://www.bloomberg.com/news/articles/2024-08-08/us-edges-towards-layoffs-as-job-market-cools-fed-rates-pressure-firms

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Though calm was restored after a wild few days in global financial markets, key market signals remained steadfastly negative. One of the most crucial of those even dropped to a level we've only seen three other times in more than 35 years - all three some of the worst cases. Moreover, that one was corroborated by a record low for swaps also set this week. 

Eurodollar University's Money & Macro Analysis

CNN Money Fed explains the big rate cut
https://money.cnn.com/2007/10/09/news/economy/fed_minutes_analysis/index.htm?postversion=2007100914

The New York Times Dow Breaks 3,000 but Ends at 2,980.20
https://www.nytimes.com/1990/07/14/business/dow-breaks-3000-but-ends-at-2980.20.html

The New York Times 10.08 RISE PUTS DOW AT 1,020.35
https://www.nytimes.com/1981/04/25/business/10.08-rise-puts-dow-at-1020.35.html

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Last week, the markets and the media melted down over well-founded recession fear. This week, in the aftermath, everyone will say it was all overblown. That's just normal. Meanwhile, the actual recession continues to progress and the data keeps showing momentum is all on that side. This includes yet another signal strongly correlated with unemployment. If that wasn't enough, yet more warnings from leisure and travel companies. 

Eurodollar University's Money & Macro Analysis

CNBC Everyone is talking about the Sahm recession indicator.
https://www.cnbc.com/2024/08/05/recession-what-is-the-sahm-rule-and-why-is-everyone-talking-about-it.html

CNBC Airbnb shares drop 14% on earnings miss as company warns of slowing U.S. demand
https://www.cnbc.com/2024/08/06/airbnb-shares-drop-14percent-on-earnings-miss-as-company-warns-of-slowing-us-demand.html

CNBC Southwest profit falls 46% as airline takes ‘urgent’ steps to increase revenue
https://www.cnbc.com/2024/07/25/southwest-airlines-luv-earnings-q2-2024.html

Bloomberg Delta’s Disappointing Outlook Sends Warning on Summer Travel
https://www.bloomberg.com/news/articles/2024-07-11/delta-s-outlook-misses-estimates-as-carriers-slash-summer-fares

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The date July 11 keeps coming up in a lot of different markets, starting with stocks. The Nikkei's last all-time high was on that day and so was the NASDAQ's. But July also features prominently in commodities and even Treasuries. The reason for it confirms so many suspicions about what just happened this past weekend therefore what it means going forward.  

Eurodollar University's Money & Macro Analysis

BLS June CPI
https://www.bls.gov/news.release/pdf/cpi.pdf

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When even big-name mainstream Economists are begging the Fed for emergency rate cuts, you might already have the sense this wasn't just a one-weekend show. US recession scrambles a lot of fundamental perceptions and values, causing a substantial and sizable repricing across asset classes. That repricing just happened to be most obvious and violent in Japan.
 
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Paul Krugman X
https://x.com/paulkrugman/status/1820426175031673269

CNBC Wharton’s Jeremy Siegel says Fed needs to make an emergency rate cut
https://www.cnbc.com/2024/08/05/whartons-jeremy-siegel-says-fed-needs-to-make-an-emergency-rate-cut.html

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Japan was the epicenter for a wave of liquidations in smashing financial markets all over the world. It had all the telltale signs of a collateral and margin call. This wasn't about Japanese banks or even Japan, rather the sudden realization over the US soft landing narrative going up in smoke triggered a monster repricing and revaluation. So, what does all that mean?

Eurodollar University's Money & Macro Analysis

CNBC Japan’s Nikkei logs worst day since 1987 Black Monday crash
https://www.cnbc.com/2024/08/05/asia-markets.html

The Economist Why Japanese markets have plummeted
https://www.economist.com/finance-and-economics/2024/08/05/why-japanese-markets-have-plummeted

Bloomberg Jolt in Credit Fear Gauges Pushes Company Borrowers to Sidelines
https://www.bloomberg.com/news/articles/2024-08-05/asia-high-grade-dollar-bond-spreads-widen-the-most-in-22-months

Bloomberg Wall Street Hit by Fears Economy in ‘Danger Zone’: Markets Wrap
https://www.bloomberg.com/news/articles/2024-08-05/japanese-stocks-tumble-leading-equities-selloff-markets-wrap?itm_source=record&itm_campaign=Global_Stocks_Selloff&itm_content=%27Mad_Rush%27_for_Treasuries-3

CNBC Dow drops 900 points, Nasdaq craters 3% in global market rout: Live updates
https://www.cnbc.com/2024/08/04/stock-market-today-live-updates.html

Deutsche Bank What impact is “higher for longer” having on the CLO market in 2024?
https://flow.db.com/trust-and-agency-services/what-impact-is-higher-for-longer-having-on-the-clo-market-in-2024

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The July payroll report confirmed the US economy is heading for trouble. Key parts of it showed recession has likely already begun. As reality dawns across the marketplace, focus turns to what comes next now that the soft landing didn't land. 

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With the questions of "what" and "when" now mainly answered, we can finally focus on "how bad." To start putting together some answers, we'll use three different markets and sets of indications each examine a separate aspect of the recession proposition; short run, intermediate, and the long term. 

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A whole bunch of bad data, much of it focused on deterioration in the US labor market (pre-July payrolls). That unleashed huge swings in rates markets and forward rates. One reason for all this is the historical pattern is perfectly clear. What we're seeing right now happens EVERY TIME. No exceptions. 

Eurodollar University's Money & Macro Analysis

FOMC Monetary Policy Statement
https://www.federalreserve.gov/newsevents/pressreleases/monetary20240731a.htm

Federal Reserve Chair Powell Press Conference July 31
https://www.youtube.com/watch?v=hb1eHcqGpY0

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Central banks don't hike rates during a recession. Or do they? The Bank of Japan just did and for the second time. By doing it, BoJ is laying itself bare; both in terms of transparently acting politically and maybe more important exposing the lie about interest rate policies. Peter Pan is not happy. 

Eurodollar University's Money & Macro Analysis

Bank of Japan Change in the Guideline for Money Market Operations and Decision on the Plan
for the Reduction of the Purchase Amount of Japanese Government Bonds
https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2024/k240731a.pdf

Nikkei Bank of Japan raises interest rate to 0.25%, open to further hike this year
https://asia.nikkei.com/Economy/Bank-of-Japan/Bank-of-Japan-raises-interest-rate-to-0.25-open-to-further-hike-this-year

Japan Times Bank of Japan delivers one-two punch few were expecting
https://www.japantimes.co.jp/business/2024/07/31/economy/boj-rates/

Wall Street Journal Bank of Japan Raises Rates, Driving Up Yen
https://www.wsj.com/economy/central-banking/bank-of-japan-hikes-rates-tapers-bond-buying-in-fresh-step-to-policy-normalization-bc8c33fb

Bloomberg  Japan’s Central Bank Hikes Key Rate Hours Before the Fed
https://www.bloomberg.com/news/articles/2024-07-31/boj-hikes-interest-rate-unveils-plan-to-cut-back-bond-buying

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Hiring in the US absolutely plunged in June, so much you really have to see it to believe it. At the same time, global fast food giant McDonalds reported lower same store sales for the first time since 2020. The reason why people can no longer afford to eat as much under the golden arches isn't necessarily price changes, what's changed recently is the alarming retreat in employment. 

Eurodollar University's Money & Macro Analysis

BLS JOLTS press release July 30, 2024
https://www.bls.gov/news.release/jolts.nr0.htm

CNBC McDonald’s earnings, revenue miss estimates as consumer pullback worsens
https://www.cnbc.com/2024/07/29/mcdonalds-mcd-q2-2024-earnings.html

CNBC McDonald’s executives admit diners think prices are too high, say they’re working to create value
https://www.cnbc.com/2024/07/29/mcdonalds-earnings-executives-say-prices-are-too-high.html

Philly Fed Large Bank Credit Card and 
Mortgage Data
https://www.philadelphiafed.org/surveys-and-data/large-bank-credit-card-and-mortgage-data
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A whole lot going on in the eurodollar shadows. Record high repo pool (reverse repo) at the Fed. Bull steepening even more aggressively outside of Treasuries. Primary dealers absolutely hoarding collateral to a degree we haven't seen since March 2020. Banks around the world heavily buying safety and liquidity. The dollar hammering currencies. But why?

Eurodollar University's Money & Macro Analysis

Reuters Rupee hits record low on month-end dollar demand; RBI helps cap losses
https://www.reuters.com/markets/currencies/rupee-hits-record-low-month-end-dollar-demand-rbi-helps-cap-losses-2024-07-29/

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According to the latest update, US consumers are out of savings. As nominal incomes have slowed way down, consumers have cut back only somewhat mainly spending on goods - causing the goods recession every big-name company is currently warning over. With unemployment rising and savings gone, there's no margin left even to maintain the current rate of decline. 

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Companies around the economy are increasingly warning about the negative effects of the goods recession, one after another missing revenue and sales targets/expectations. The latest from several of the largest global businesses point to deepening macroeconomic setbacks. Even the automobile industry is showing signs of serious weakness, starting with pricing. No surprise commodity markets are sharply lower in spite of supply factors as the downturn is set to spread.

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Bloomberg Markets Tear Up Popular Trades That Reached ‘Stupid Levels’
https://www.bloomberg.com/news/articles/2024-07-25/everything-you-thought-you-knew-about-2024-markets-has-changed

EuroNews Nestlé downgrades sales outlook and looks to new products for growth
https://www.euronews.com/business/2024/07/25/nestle-downgrades-sales-outlook-and-looks-to-new-products-for-growth

CNBC Unilever pops 6% on margin guidance raise, Ben & Jerry’s spinoff on track to complete by end of 2025
https://www.cnbc.com/2024/07/25/unilever-pops-6percent-on-guidance-raise-says-ben-jerrys-spinoff-on-track.html

STMicroelectronics Reports 2024 Second Quarter Financial Results
https://investors.st.com/static-files/9f07c6a1-5da9-49cf-8a95-4c301436fb0b

The Detroit News Ford CFO says growing dealer inventory 'worries me'
https://www.detroitnews.com/story/business/autos/ford/2024/06/11/ford-cfo-john-lawler-growing-dealer-inventory-worry/74056579007/

J.D. Power-GlobalData U.S. Automotive Forecast for July 2024
https://www.morningstar.com/news/business-wire/20240726147635/jd-power-globaldata-us-automotive-forecast-for-july-2024

CNBC U.S. crude oil on pace for third weekly decline as China demand outweighs U.S. growth
https://www.cnbc.com/2024/07/26/crude-oil-prices-today.html

CNBC U.S. crude oil falls nearly 2% to lowest levels in six weeks
https://www.cnbc.com/2024/07/23/oil-prices-drop-to-lowest-levels-in-more-than-a-month.html

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A majority of Americans believe the US is in recession and has been for some time. Second quarter GDP just came out wildly above expectations. So is everyone wrong? Not quite. In fact, the GDP estimates actually explain why people are so mad, what they are already doing about it, and why that spells trouble for the entire economy. 

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It doesn’t matter what experts say — 3 in 5 believe America is in a recession
https://studyfinds.org/3-in-5-america-in-recession/

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The Treasury curve continues to make escalating even decisive bull moves. It's not difficult to see why, as another global consumer company admits its having trouble selling its products and in this case to the more well-to-do segment. In addition, former Fed members are urging immediate rate cuts openly wondering if it might be too late. One neighboring central bank is waiting to find out, unleashing another cut of its own and saying there are surely more coming. 

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CNBC World’s largest luxury group LVMH slumps 4% after second-quarter revenue miss
https://www.cnbc.com/2024/07/24/worlds-largest-luxury-group-lvmh-slumps-5percent-after-reporting-revenue-miss.html

Bloomberg LVMH Shows the Luxury Sector Is in Pain
https://www.bloomberg.com/opinion/articles/2024-07-24/what-lvmh-tells-us-about-luxury-s-financial-prospects

Bloomberg I Changed My Mind. The Fed Needs to Cut Rates Now.
https://www.bloomberg.com/opinion/articles/2024-07-24/the-fed-needs-to-cut-interest-rates-now

WSJ Bank of Canada Cuts Policy Rate to 4.5%, Frets Over Downside Risks
https://www.wsj.com/articles/bank-of-canada-cuts-policy-rate-to-4-5-frets-over-downside-risks-78a7a81b

Bank of Canada Policy Statement
https://www.bankofcanada.ca/2024/07/fad-press-release-2024-07-24/

Bank of Canada Press Conference
https://www.bankofcanada.ca/multimedia/press-conference-monetary-policy-report-july-2024/

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Replay of the livestream Member Q&A 100 epic discussion. George. Jim. Steve. Mike. Eric. Brent. Emil and Jeff back together again. Two hours of back and forth. Including why Home Alone lied to you.

There was so much all in one place. Spirited back and forth between all the fellas, a real deep dive in true Eurodollar University style. Arguing about the past. Angling toward the future. Even a few questions from EDU members. We just might have to do this again. 

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China's dollar woes have jumped in recent months, so much that they've come out of the eurodollar shadows enough to impact the onshore banking system in an unexpected way. Foreign holdings of negotiable bank CDs have exploded. We'll discuss what that means and how it relates to China's dollar shortage and the surprise set of rate cuts announced by the PBOC earlier today.

Eurodollar University's Money & Macro Analysis

Bloomberg Global Funds Pile Up Nearly a Trillion Yuan of China Bank Bonds
https://www.bloomberg.com/news/articles/2024-07-22/global-funds-pile-up-nearly-a-trillion-yuan-of-china-bank-bonds

Bloomberg China Surprises With Rate Cut After Xi’s Big Meeting Disappoints
https://www.bloomberg.com/news/articles/2024-07-22/pboc-cuts-seven-day-reverse-repo-rate-to-1-7-to-support-economy

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To way too many Americans and other workers, this is already a recession of opportunity. Without the major statics yet to show it, mainstream commentary has mocked their plight as a "vibe-cession." Now the data is beginning to more clearly align with the recession "vibe", suddenly even authorities are starting to worry so out comes the rate cuts. As Steve says, that's not what you want. 

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Bloomberg Goolsbee Says Fed Risks ‘Golden Path’ If It Doesn’t Cut Soon
https://www.bloomberg.com/news/articles/2024-07-18/goolsbee-says-fed-risks-golden-path-if-it-doesn-t-cut-soon

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All year all anyone has heard is the Fed and its rate cuts. Soft landings imply a little weakness but no worry, Jay Powell will cut rates once maybe twice and everything will be just fine. The only question is, why on earth does anyone believe this? The evidence and history of interest rate targeting - as you'll see - is indeed 100%, as in total failure. Rate cuts (like hikes) are pure superstition. 

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PBS Is the Fed going to cut interest rates? What was once a question of ‘when’ is now less certain
https://www.pbs.org/newshour/economy/is-the-fed-going-to-cut-interest-rates-what-was-once-a-question-of-when-is-now-less-certain

Morningstar We Expect GDP Growth to Weaken Until Fed Starts Cutting Interest Rates
https://www.morningstar.com/economy/we-expect-gdp-growth-weaken-until-fed-starts-cutting-interest-rates

FOMC Transcript March 1991
https://www.federalreserve.gov/monetarypolicy/files/FOMC19910326meeting.pdf

Remarks by Chairman Alan Greenspan
Rules vs. discretionary monetary policy
At the 15th Anniversary Conference of the Center for Economic Policy Research at Stanford University, Stanford, California
September 5, 1997
https://www.federalreserve.gov/boarddocs/speeches/1997/19970905.htm

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In the midst of other major warnings, here comes another substantial one. Copper has moved way past its supply squeezed record high from just two months ago and is now crashing. At the same time, gold is reaching new heights. The copper to gold ratio therefore just dropped to its lowest since...November 2020. Taking a deeper look at what all this means. 

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Bloomberg China’s Unusually Large Copper Stockpiles Fuel Demand Concerns
https://www.bloomberg.com/news/articles/2024-06-05/china-s-unusually-large-copper-stockpiles-fuel-demand-concerns

Bloomberg Gold Slips From Record High as Traders Ponder Bet on Fed Pivot
https://www.bloomberg.com/news/articles/2024-07-17/gold-holds-at-record-high-as-rate-cut-bets-fuel-demand-rush

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Swaps are of paramount importance to the financial world, priced by the very monetary system itself. As a consequence, swap market indications are even more critical than the yield curve. But what does it all mean, and how can you decipher what appear its confusing signals? A few minutes on some manageable basics and you're ready to read the market's big move.

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Another part of the yield curve un-inverted, this time the short to long segment. Demonstrating the perpetual inability to make sense of it, mainstream sources are suggesting some "Trump trade" is behind this. No. Unequivocally no. The classic bull case is building and this is merely the latest nascent signal. It isn't complete yet, but incoming data including today's negative retail sales continues to suggest the same case.

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NYT 30-year U.S. bond is back in big way
https://www.nytimes.com/2006/02/09/business/worldbusiness/30year-us-bond-is-back-in-big-way.html

It started Friday when China's central bank reported more than just new record low credit stats, the deterioration over the past few months has been astounding. That obviously spread to the Chinese economy which the government confirmed today with ugly data across-the-board, big miss in GDP and grim numbers on retail sales. Yet, everyone wants more "stimulus" that all this data proves didn't stimulate a thing. Something to keep in mind when thinking about upcoming Fed rate cuts.

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CNN How ready is China’s military? Dramatic downfall of two defense ministers raises questions
https://www.cnn.com/2024/07/01/china/china-defense-ministers-downfall-analysis-intl-hnk/index.html

FxStreet China: GDP miss calls for faster fiscal spending – Standard Chartered
https://www.fxstreet.com/news/china-gdp-miss-calls-for-faster-fiscal-spending-standard-chartered-202407151119

FT China plays down hopes for ‘strong medicine’ at top economic policy meeting
https://www.ft.com/content/6f4079ea-e8fe-46c8-84b3-75aff56b7011

Reuters China June new bank loans miss forecasts, some money gauges hit record lows
https://www.reuters.com/business/finance/china-june-new-bank-loans-miss-forecasts-some-money-gauges-hit-record-lows-2024-07-12/

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Why does the Japanese government keep intervening trying to prop up the yen, and why does it keep failing? This isn't just about the yen or Japan, nor is it completely a matter of what's unfolding right now. There is a deeper truth that needs to be made more widely which applies universally to monetary systems around the world. And the yen's crash is the clearest example. 

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There was an unnoticed yet absolutely critical detail in the June CPI report that pointed to a lot more than just benign disinflation, a development that has only rarely been observed in decades of history. More disturbing still, the context behind this one is consistent with those few past instances including a few new pieces of subsequent information. 

Eurodollar University's Money & Macro Analysis

FOMC Transcript April 2010
https://www.federalreserve.gov/monetarypolicy/files/FOMC20100428meeting.pdf

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The June consumer price estimates at first seemed like good news. Two months in a row at low and now negative changes. But these past two months have shown a little more weakness than most had bargained for, instead so many of the details consistent with recession indications spilling out from all over the economy. No wonder bond yields dropped sharply, though, alarmingly, swap spreads got there well before today. 

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BLS June 2024 CPI
https://www.bls.gov/news.release/pdf/cpi.pdf

Bloomberg Stocks See Big Rotation as Yields Sink on Fed Bets: Markets Wrap
https://www.bloomberg.com/news/articles/2024-07-10/stock-market-today-dow-s-p-live-updates

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Chinese authorities are becoming increasingly desperate over their inability to stabilize any of the economy, banking system, or markets. CNY keeps going down, as does the economy. Banks in China aren't lending while dozens are now 'disappearing.' Safety/liquidity of government bonds makes perfect sense. Not to the PBOC which is going to be shorting it by hundreds of billions and this is why.

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Bloomberg Closer Yen, Yuan Correlation Is Danger Sign for Asian Currencies
https://www.bloomberg.com/news/articles/2024-07-10/closer-yen-yuan-correlation-is-danger-sign-for-asian-currencies?srnd=economics-v2

X Video showing Jiangxi Bank 'protest'
https://twitter.com/BitcoinNewsCom/status/1810456112652779538

The Economist Why Chinese banks are now vanishing
https://www.economist.com/finance-and-economics/2024/07/04/why-chinese-banks-are-now-vanishing

Bloomberg China Merges Hundreds of Rural Banks as Financial Risks Mount
https://www.bloomberg.com/news/articles/2024-01-31/china-merges-hundreds-of-rural-banks-as-financial-risks-mount

Bloomberg China's PBOC Readies Multibillion-Yuan Pool of Bonds to Sell by Tapping Major Banks
https://www.bloomberg.com/news/articles/2024-07-05/pboc-readies-hundreds-of-billions-of-yuan-bond-sale-capacity

CNN Chinese government bonds are on fire. That’s ringing alarm bells in Beijing
https://www.cnn.com/2024/07/03/business/china-bond-market-bank-crisis-svb-intl-hnk/index.html

China NBS June 2024 CPI
https://www.stats.gov.cn/sj/zxfb/202407/t20240710_1955508.html

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From 'strong and resilient' to 'uh oh' in a heartbeat. The unemployment rate has intruded itself on the soft landing narrative, forcing a near-total rethink of the situation all across the mainstream. Some major bank strategists are now calling for aggressive rate cuts from the Fed at the same time the yield curve is beginning to flash bull. 

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Fed Chair Powell testimony (courtesy CBS News)
https://www.youtube.com/watch?v=Og8W_VK1gMM

Fed Chair Powell prepared remarks before Congress
https://www.federalreserve.gov/newsevents/testimony/powell20240709a.htm

CNBC The Fed is ‘playing with fire’ by not cutting rates, says creator of ‘Sahm Rule’ recession indicator
https://www.cnbc.com/2024/06/18/economist-sahm-who-devised-recession-rule-says-the-fed-is-playing-with-fire-.html

Fortune The Fed could slash rates by 200 points over 8 straight meetings as the economy heads for a sharper downtrend, Citi says
https://fortune.com/2024/07/07/fed-rate-cuts-outlook-200-points-economy-sharper-slowdown-citi/

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Political turmoil in Europe is very easy to understand. The European economy is supposed to be recovering from its unofficial recession, and yet the most recent data shows instead alarming (re)acceleration to the downside in a number of places. Realizing this means the path to clawing back some of the supply shock's price increases is disappearing, voters are simply voting accordingly. 

Eurodollar University's Money & Macro Analysis

Pew Research Center Economic ratings across 34 countries are more negative than positive
https://www.pewresearch.org/short-reads/2024/06/07/economic-ratings-across-34-countries-are-more-negative-than-positive/

World Bank Global trade has nearly flatlined. Populism is taking a toll on growth
https://blogs.worldbank.org/en/voices/global-trade-has-nearly-flatlined-populism-taking-toll-growth

UN Trade and Development  Global economic growth set to slow to 2.6% in 2024, just above recession threshold
https://unctad.org/news/global-economic-growth-set-slow-26-2024-just-above-recession-threshold

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Unemployment in the US is now steadily moving higher. The June 2024 employment report contained more substantial downward revisions, evidence more employers are cutting hours, and most concerning is another increase to the unemployment rate. And, contrary to many claims, it's not the "good" kind of rising unemployment.

Eurodollar University's conversation w/Steve Van Metre

BLS Employment Situation Summary June 2024
https://www.bls.gov/news.release/empsit.nr0.htm

Bloomberg The US Economic Slowdown Is Looking More Threatening
https://www.bloomberg.com/opinion/articles/2024-07-05/us-jobs-report-economic-slowdown-is-looking-more-threatening

FOMC June 2024 Minutes
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20240612.pdf

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According to multiple recent reports, banks are very quietly selling out of CRE positions. Those reports are backed up by banking data which clearly shows an inflection in systemic loans in the space. Combined, we have strong evidence showing the second stage of the CRE bust has now started. 

Eurodollar University's Money & Macro Analysis

Reuters Big US banks withstand Fed's commercial real estate shock scenario
https://www.reuters.com/markets/us/big-us-banks-withstand-feds-commercial-real-estate-shock-scenario-2024-06-26/

Federal Reserve Stress Test Results 2024
https://www.federalreserve.gov/publications/files/2024-dfast-results-20240626.pdf

NYT Office Building Losses Start to Pile Up, and More Pain Is Expected
https://www.nytimes.com/2024/06/06/business/office-building-foreclosures-losses.html

NYT Fearing Losses, Banks Are Quietly Dumping Real Estate Loans
https://www.nytimes.com/2024/06/24/business/commercial-real-estate-loans.html

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Modern economies have been moving in the direction of ledger money not for years or decades, for centuries. The world's current reserve currency, the eurodollar, merely represented the second stage in the evolutionary process. Now that it has surpassed its useful life, the door is wide open for the third stage which seems tailor-made for something like Bitcoin. Why hasn't the digital ledger taken advantage of the opportunity? Is there some other kind which is?

Eurodollar University's Special Presentation: Ledger Money Won't Be Perfect

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Fed officials have repeatedly stated they are going to be patient before pivoting to rate cuts. But that would only be the case if the economy is actually strong and resilient. Should the labor market show signs of falling off dramatically, they'd cut their rates in a hurry. Today's macro data were filled with exactly those kinds of warning signs. 

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Bloomberg Powell Welcomes Recent Data But Fed Needs More Confidence to Cut
https://www.bloomberg.com/news/articles/2024-07-02/powell-welcomes-recent-data-but-fed-needs-more-confidence-to-cut

Bloomberg Bond Traders Boldly Bet on 300 Basis Points of Fed Cuts by March
https://www.bloomberg.com/news/articles/2024-06-25/bond-traders-boldly-bet-on-300-basis-points-of-fed-cuts-by-march

Bloomberg US Services Activity Contracts at Fastest Pace in Four Years
https://www.bloomberg.com/news/articles/2024-07-03/us-services-activity-contracts-at-fastest-pace-in-four-years

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Everyone wants to know the answer to the recession question. So, by very popular demand, Eric Basmajian of EPB Macro Research checks in with Jeff on the unusual state and status of the US business cycle. The whole monumental matter just might come down to houses. 

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Government bond yields in China just plunged to more record lows as market agents are growing even more pessimistic. The unquenchable demand for safe and liquid assets has the PBOC getting ready to sell bonds into a marketplace that is increasingly concerned about a lot more than Chinese issues. More strong evidence for globally synchronized.

Eurodollar University's Money & Macro Analysis

Bloomberg Economists Raise China Growth Forecasts as Exports Improve
https://www.bloomberg.com/news/articles/2024-06-25/economists-raise-china-growth-forecasts-as-exports-improve

Bloomberg El-Erian Says Slowing Economy Raises Fed Policy-Error Risk
https://www.bloomberg.com/news/articles/2024-06-28/el-erian-says-slowing-economy-raises-fed-policy-error-risk

Bloomberg A $100 Billion Bet on China’s Economy Sours as Warehouses Empty
https://www.bloomberg.com/news/articles/2024-07-01/china-s-third-plenum-and-what-it-means-for-tax-reform-and-supply-chains?srnd=economics-v2

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Soft landings and resilient economy supported by strength in labor markets. At least that's the narrative, the truth is completely different. Much of the developed world is being swept up in a wave of rising unemployment. Yes, including the US.;/

Eurodollar University's conversation w/Steve Van Metre

Bank of Canada
https://www.bankofcanada.ca/2024/06/opening-statement-2024-06-05/

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Another new low for JPY as the Japanese government is shuffling up its top Finance Ministry people. Everyone continues to blame the Fed for the yen's crash but the evidence conclusively shows that's not it. This only raises the question, what is it? The yen's own track record holds the answer and it is one that applies to you.

Eurodollar University's Money & Macro Analysis

Reuters Japan names new FX diplomat as yen hits 38-year low
https://www.reuters.com/markets/asia/japan-appoints-atsushi-mimura-top-fx-diplomat-replacing-masato-kanda-2024-06-28/

Reuters Japan warns against rapid FX moves, reiterates readiness for action
https://www.reuters.com/markets/currencies/japan-warns-against-rapid-fx-moves-reiterates-readiness-action-2024-06-24/

Bloomberg Yen Falls Through 161 Per Dollar, Putting Intervention in Focus
https://www.bloomberg.com/news/articles/2024-06-28/yen-falls-through-161-per-dollar-as-intervention-wagers-increase

Barrons The Fed’s Higher for Longer Policy Is Breaking the Yen
https://www.barrons.com/articles/fed-yen-b66308af

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Retail and Pharmacy giant Walgreens now says there won't be a second half rebound after all, not according to its view of the consumer economy. It was seconded by Levi's and then European behemoth H&M. All of that ties together with a record low in US pending home sales and a summer driving season that's already an enormous bust as recession forces bear down.

Eurodollar University's Money & Macro Analysis

NBCNews Walgreens plans store closures as CEO says consumers 'stunned' by prices
https://www.nbcnews.com/business/business-news/walgreens-plans-store-closures-ceo-says-consumers-stunned-prices-rcna159208

CNBC Levi’s shares drop 15% as jeans maker’s sales disappoint despite denim craze
https://www.cnbc.com/2024/06/26/levi-levi-earnings-q2-2024.html

CNBC H&M plunges 13% on doubts over full-year margin target, June sales outlook
https://www.cnbc.com/2024/06/27/hm-plunges-12point5percent-on-doubts-over-full-year-margin-target-june-sales-outlook.html

Bloomberg US Pending Home Sales Index Slides to Record Low on High Rates
https://www.bloomberg.com/news/articles/2024-06-27/us-pending-home-sales-index-slides-to-record-low-on-high-rates

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China's top central banker confirmed last week the intention to radically change the operations of the Peoples' Bank of China. Some have speculated this equates to an imminent QE, but that has nothing to do with the reform. We've seen this before. The issue is bank, not central bank. 

Eurodollar University's Money & Macro Analysis

BNP Implications of China's Impaired Transmission Mechanism
https://docfinder.bnpparibas-am.com/api/files/f3e3ee55-9e19-455f-a1a6-08123581e2e9

SCMP Xi Jinping to China’s central bank: restart treasury-bond trade, after 2-decade hiatus
https://www.scmp.com/economy/china-economy/article/3256967/xi-jinping-chinas-central-bank-restart-treasury-bond-trade-after-2-decade-hiatus

Pan Gongsheng's speech at Shanghai
http://www.pbc.gov.cn/en/3688110/3688172/5188125/5379416/index.html

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There have been a whole bunch of ripples through the monetary system coming in from all angles pointing toward a sizable collateral disruption. The primary culprit(s) appears to be from Europe, starting in bond spreads surging off election uncertainty though we can't discount the ECB's rate cut as a factor. The eurodollar aftershocks are pronounced regardless of origin.

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IOSCO Securities Lending Transactions: Market Development and Implications
https://www.bis.org/cpmi/publ/d32.pdf

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Japanese banks have been bulking up on US junk corporate credit for the last year, driven entirely by an increasingly difficult reach for yield. That means overlooking dangers and risks which in other less distorted times would have been taken more seriously. The end result is a large and growing distortion in a key part of the credit markets.

Eurodollar University's Money & Macro Analysis

Bank of Japan Financial System Report October 2019
https://www.boj.or.jp/en/research/brp/fsr/data/fsr191024a.pdf

VanEck Looking Beyond AAA Rated CLOs Pays Off
https://www.vaneck.com/us/en/blogs/income-investing/looking-beyond-aaa-rated-clos-pays-off/

Deutsche Bank What impact is 'higher for longer' having on the CLO market in 2024
https://flow.db.com/trust-and-agency-services/what-impact-is-higher-for-longer-having-on-the-clo-market-in-2024

Bloomberg A $1.3 Trillion Fund Pool for Junk-Rated US Firms Has Unlikely Lifeline: Japan's Banks
https://www.bloomberg.com/news/articles/2023-04-20/the-1-3-trillion-clo-market-grows-more-dependent-on-japan-banks

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Copper and aluminum were soaring and so were reflation expectations for the global economy. If the world wasn't too careful, those might even lead to resurgent inflation. What's happening in those and other commodities has shocked market observers. As has the most recent global macro data. 

Eurodollar University's conversation w/Steve Van Metre

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Another CRE securitized structure is reportedly causing losses for its top tier, this one in another country and from a different corner of the real estate market. This matches recent reports that big banks are quietly beginning to sell their seniors in the space. Moreover, US homebuilder activity has plunged to new lows as the crosscurrents in the economy and financing are getting more unfavorable. 

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Bloomberg Pimco Warns of More Regional Bank Failures on Property Pain
https://www.bloomberg.com/news/articles/2024-06-11/pimco-warns-of-more-regional-bank-failures-on-commercial-property-pain

Bloomberg CMBS Buyers Face First Europe AAA Loss Since Credit Crunch
https://www.bloomberg.com/news/articles/2024-06-19/cmbs-buyers-set-for-first-europe-aaa-loss-since-credit-crunch

Bloomberg Losses Pile Up in Top-Rated Bonds Backed by Commercial Real Estate Debt
https://www.bloomberg.com/news/articles/2024-05-23/cmbs-buyers-suffer-first-loss-on-aaa-debt-since-financial-crisis

CREDiQ CRE CLO Distress Rate Widens to 9.74%
https://cred-iq.com/blog/2024/06/14/cre-clo-distress-rate-widens-to-9-74/

CREDiQ Loan Modifications Swell 195% in 12 Months
https://cred-iq.com/blog/2024/06/21/loan-modifications-swell-195-in-12-months-cred-iq/

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The Swiss National Bank surprised Economists by cutting rates for the second time in a row. Citing a number of potential worries starting with more recession, the rate cuts are aligned with growing dollar troubles roiling the rest of the world. Major currencies are sinking fast, hitting new lows and pointing toward the same reasoning just acted on in Switzerland. 

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Bloomberg SNB Silence Sets Up Another Rate-Cut Cliffhanger
https://www.bloomberg.com/news/articles/2024-06-19/swiss-national-bank-interest-rate-cuts-central-bank-silence-sets-up-cliffhanger

Switzerland Economic forecast largely unchanged: Swiss growth in 2024 to be below average
https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-101432.html

SNB Monetary Policy Assessment June 20, 2024
https://www.snb.ch/en/publications/communication/press-releases-restricted/pre_20240620

CNBC Switzerland makes second interest rate cut as major economies diverge on monetary policy easing
https://www.cnbc.com/2024/06/20/switzerland-trims-key-interest-rate-to-1point25percent-in-second-cut-of-the-year.html

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A Japanese bank giant announced it was going to begin selling tens of BILLIONS in USTs and other European government bonds knowing full well the institution is going to take huge losses on the sales. Is this the start of another bank run? Will this kill the Treasury market? 

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About Norinchukin Bank
https://www.nochubank.or.jp/en/about/

Norinchukin Financial Summary Fiscal Year 2023
https://www.nochubank.or.jp/en/ir/results/pdf/cap_results2023_04_02.pdf

Bloomberg Echoes of 2009 Crisis Thrust Japanese Bank Norinchukin Back Into Spotlight
https://www.bloomberg.com/news/articles/2024-05-21/japan-s-bank-for-farmers-and-fishermen-returns-to-spotlight-for-overseas-losses

Bloomberg Norinchukin Bank to Sell $63 Billion of Sovereign Bonds
https://www.bloomberg.com/news/articles/2024-06-18/norinchukin-bank-to-sell-63-billion-of-bonds-to-stem-losses

Bloomberg A $1.3 Trillion Fund Pool for Junk-Rated US Firms Has Unlikely Lifeline: Japan's Banks
https://www.bloomberg.com/news/articles/2023-04-20/the-1-3-trillion-clo-market-grows-more-dependent-on-japan-banks

FRBNY Standing Repo Facility Approved Counterparties
https://www.newyorkfed.org/markets/srflist-231201

CBO Budget Update June 2024
https://www.cbo.gov/system/files/2024-06/60039-Outlook-2024.pdf

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The data continues to pour in showing US consumers have indeed hit the wall. Spending is down according to a variety of sources, including the latest update on retail sales for May. There is also a growing body of evidence indicating there is more weakness to come starting with summer vacations. All this indicates the chances of full-blown recession are rising sharply. 

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CNN  Evidence is mounting that the American shopper is cutting back
https://edition.cnn.com/2024/06/18/economy/us-retail-sales-may/index.html

McKinsey & Company An update on US consumer sentiment: Are consumers on the cusp of a shift?
https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-state-of-the-us-consumer

Deloitte Summer Travel Survey 2024
https://www2.deloitte.com/content/dam/insights/articles/us187281_cic_summer-travel/DI_2024-summer-travel.pdf

Federal Reserve Beige Book May 29, 2024
https://www.federalreserve.gov/monetarypolicy/files/BeigeBook_20240529.pdf

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Housing prices in China plunged in May, accelerating sharply after April's big drop indicating the situation in the real estate market is getting closer to becoming disorderly. There will be fallout across the world should that happen, as there already is across China's economy as the latest data also showed. 

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Bloomberg China Real Estate, Production Slide Highlights More Stimulus Needed
https://www.bloomberg.com/news/newsletters/2024-06-17/world-economy-latest-china-property-sector-plunge-needs-more-support

China's NBS Situation in Real Estate
https://www.stats.gov.cn/sj/zxfb/202406/t20240617_1954711.html

Bloomberg China Steps Up Warning on Relentless Bond-Buying Frenzy
https://www.bloomberg.com/news/articles/2024-06-17/china-steps-up-warnings-on-relentless-bond-buying-frenzy

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Consumer confidence has dropped sharply over the past few months as Americans are now more concerned about jobs and incomes than prices. The shift has been so pronounced that even members of the mainstream media are questioning FOMC officials. Hardly strong and resilient, there's rising unemployment and declining confidence mixed with a bevy corporate warnings.

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FRB Chair Jay Powell Press Conference June 12, 2024
https://www.youtube.com/watch?v=YqaxWf7gsQA
Transcript:
https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20240612.pdf

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Conventional 'wisdom' says that when US$ interest rates go down the dollar goes down with them. Yet, it hasn't been uncommon to find Treasury yields falling as the dollar's exchange value jumps. When that has happened, nothing good comes from it. We're starting to see what looks to be that scenario setting up right now. 

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I said the payroll number is wrong and Jay Powell of all people agrees. But if the real question is how wrong, that's where the debate is even though it should already be settled. There is plenty of evidence the US is tilting in the direction of the HH Survey and unemployment rate. And that includes the rates market which ignored the FOMC's hawkish dots. 

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Jay Powell's Press Conference
https://www.youtube.com/watch?v=q3ZE5tF_IMU

CNBC Quotes from Jay Powell Press Conference
https://www.cnbc.com/2024/06/12/fed-meeting-today-live-updates-on-june-fed-rate-decision.html

Politico Biden’s economy: Good metrics, bad vibes, few levers
https://www.politico.com/news/2024/06/07/biden-has-an-economic-story-to-tell-and-yet-00162338

Guardian Majority of Americans wrongly believe US is in recession – and most blame Biden
https://www.theguardian.com/us-news/article/2024/may/22/poll-economy-recession-biden

BLS Business Employment Dynamics Summary
https://www.bls.gov/news.release/cewbd.nr0.htm

Table 4'
https://www.bls.gov/news.release/cewbd.t04.htm

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Walgreens is the latest Big Name to cut prices because Americans have run out of money. As the company's prices go down, those will add even more to the disinflationary environment; and that's the bad side of smaller price changes. Today's May CPI completely backs up everything we've been seeing. 

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Walgreens Walgreens Introduces Summer of Savings
https://www.walgreensbootsalliance.com/news-media/press-releases/2024/walgreens-introduces-summer-savings

Quartz Amazon, Walmart, and Big Retail’s race to cut prices
https://qz.com/target-walmart-amazon-walgreens-price-cuts-consumers-1851507920

Bloomberg  Big Oil’s Blockbuster $114 Billion Investor Payout Is Most Ever
https://www.bloomberg.com/news/articles/2024-02-07/big-oil-pays-out-record-114-billion-in-share-buybacks-and-dividends

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Last week's ECB rate cut was...odd. Sure, officials had said for months they were going to do it. Yet, the conditions that would have to be met were not. Policymakers went ahead anyway and this past weekend's developments are a big Big Picture reason why. 

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Bloomberg Italy’s Tajani Calls for Quick Second ECB Cut After June Move
https://www.bloomberg.com/news/articles/2024-06-05/italy-s-tajani-calls-for-quick-second-ecb-cut-after-june-move

The Times Back me for low interest rates, Rishi Sunak tells voters
https://www.thetimes.com/uk/politics/article/rishi-sunak-tories-interest-rates-general-election-962mpcmjx

AP UK inflation lowest in 3 years. Prime Minister Sunak makes it a focus in election call for July 4
https://apnews.com/article/britain-economy-inflation-interest-rates-090db19af939b9c532da1fb15ab40a0a

LeMonde Moody's warns that France's snap election could lower credit rating
https://www.lemonde.fr/en/france/article/2024/06/11/moody-s-warns-that-french-snap-election-could-lower-credit-rating_6674498_7.html#

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Consumer credit has historically been a solid recession signal, particularly how consumers alter their usage of credit cards. Some of that by choice, for many it is the bank's. Either way, when this happens it is more compelling evidence backing the rise in the unemployment rate.

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September 2008 FOMC Transcript
https://www.federalreserve.gov/monetarypolicy/files/FOMC20080916meeting.pdf

March 2001 FOMC Transcript
https://www.federalreserve.gov/monetarypolicy/files/FOMC20010320meeting.pdf

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Roaring Kitty is not the problem, nor is Gamestop the company and its stock. All are symptoms of a degraded model that increasingly rewards all the wrong behaviors. Stocks have become lottery tickets, the pie-in-the-sky way out for way too many Americans otherwise trapped in a real economy that continues to leave them behind - as the latest employment report proves. 

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Roaring Kitty Livestream 6/7/2024
https://www.youtube.com/watch?v=U1prSyyIco0&t=658s

The Hill GameStop shares plunge, halted during Roaring Kitty livestream
https://thehill.com/business/4710147-gamestop-shares-trading-roaring-kitty-livestream-meme-stock/

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This has never happened before. Sure, the payroll data and CPS series have diverged before but this is something entirely new. The fact that it runs contrary to decades of history makes our determination rather easy and simple: the labor market noose is tightening. 

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Bloomberg Big US Job Gains Is Out of Sync With Recent Weaker Economic Data
https://www.bloomberg.com/news/live-blog/2024-06-07/us-employment-report-for-may

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After two years unequivocally stating "inflation" was the world's biggest threat and crisis, and that nothing short of full victory would suffice, now all of a sudden Europe (and Canada) is changing it up, cutting rates even as price estimates remain well short of their standard while also appearing to be stuck that way. What is really going on here?

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ECB Christine Lagarde, President of the ECB, Luis de Guindos, Vice-President of the ECB
https://www.ecb.europa.eu/press/press_conference/monetary-policy-statement/2024/html/ecb.is240606~d32cd6cc8a.en.html

Bank of Canada Rate Cut Announcement
https://www.bankofcanada.ca/multimedia/press-conference-policy-rate-announcement-june-2024/

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More labor market cracks are showing and expanding. Even some of the data which has been resilient may have to be substantially changed given new information that just came to light. Labor weakness continues to clear out the FOMC setting the Treasury market up the next rally - though it isn't quite there yet. 

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ADP National Employment
https://adpemploymentreport.com/

ADP Pay Insights
https://payinsights.adp.com/?_ga=2.165121663.1500609015.1717601960-340309474.1717601960

BLS QCEW Overview
https://www.bls.gov/cew/overview.htm

BLS QCEW 
https://www.bls.gov/news.release/cewqtr.nr0.htm

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As more weak data pours in on the US economy, the more clarity it offers on the future path of ST interest rates. As that clears up, market rates are moving lower. But why? Mainstream theory demands we consider rates as entirely supply or demand factors (like QE). Yet, the past couple years have thoroughly disproven the idea. Rates are going lower because that's where and what the fundamentals are. 

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Bloomberg Majority of Middle-Class Americans Say They Struggle Financially
https://www.bloomberg.com/news/articles/2024-06-04/two-thirds-of-middle-class-americans-face-hardship-in-poll?srnd=economics-v2

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A rare warning strikes the gasoline market in another confirmation of economic weakness, one primary factor which forced OPEC this past weekend to extend its production restrictions. On top of those, big changes to US income estimates further corroborating the deterioration, as did a surprise drop in one of the more critical sentiment signals.

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Reuters Weak US gasoline demand compounds pressure on oil ahead of OPEC+ meet
https://www.reuters.com/business/energy/weak-us-gasoline-demand-compounds-pressure-oil-ahead-opec-meet-2024-05-31/

Nikkei  OPEC+ extends deep oil production cuts into 2025
https://asia.nikkei.com/Business/Energy/OPEC-extends-deep-oil-production-cuts-into-2025

ISM Manufacturing May 2024
https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/may/

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Weak economic results continue to roll in, matching other sources of information about the US economy. From the Federal Reserve's own account and data to more corporate reports. They all have one thing - and one word - in common. GDP revisions plus the first update on the state of GDI and its bigtime mismatch. 

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Tensions are rising. Aggressive actions are becoming commonplace. This isn't just sabre-rattling and posturing as war is a real possibility. It's not difficult to see why, at least what some of the motivation is. China's central bank is publicly discussing even more highly unusual steps to try to reign in the unfolding financial and economic backlash which was just confirmed by even more data. 

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Bloomberg US Commander Warns China Is Fast Becoming More Aggressive in Region
https://www.bloomberg.com/news/articles/2024-04-23/us-commander-warns-china-is-fast-becoming-more-aggressive-in-region

Bloomberg Xi’s Cryptic Bond Comments Hint at PBOC Becoming More Like Fed
https://www.bloomberg.com/news/articles/2024-04-01/xi-s-cryptic-bond-comments-hint-at-pboc-becoming-more-like-fed

CNBC Philippine president says killing of a Filipino in South China Sea clash would be ‘very close’ to act of war
https://www.cnbc.com/2024/05/31/ferdinand-marcos-jr-philippine-president-talks-red-lines-in-south-china-sea.html

Bloomberg Marcos Swipes at China, Vowing Not to Yield in Disputed Sea
https://www.bloomberg.com/news/articles/2024-05-31/marcos-swipes-at-beijing-in-vow-to-not-yield-in-south-china-sea

Bloomberg China Ramps Up Warning on Bond Frenzy
https://www.bloomberg.com/news/articles/2024-05-31/china-ramps-up-warning-on-bond-frenzy-with-pboc-selling-in-focus

Dow Jones Chinese State Media Hint at Possible PBOC Bond Selling
https://www.morningstar.com/news/dow-jones/202405311908/chinese-state-media-hint-at-possible-pboc-bond-selling

Nikkei Asia Foreign direct investment in China falls to 30-year low
https://asia.nikkei.com/Economy/Foreign-direct-investment-in-China-falls-to-30-year-low

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More corporate mayhem brought on by the "uncertain market environment." Stocks of both Salesforce and Kohl's were hammered today as each company demonstrates in their own way just what the updated GDP numbers suggest. That latter data report also includes GDI which is almost certainly closer to the real economy all these other sources are projecting. 

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CNBC Salesforce shares tumble 20%, on pace for worst day since 2004
https://www.cnbc.com/2024/05/30/salesforce-stock-fall-earnings-revenue-miss.html

Bloomberg  Salesforce Shares Plunge by Most Since 2008 After Weak Outlook
https://www.bloomberg.com/news/articles/2024-05-29/salesforce-gives-weak-sales-outlook-with-slowdown-fears-growing

CNBC Kohl’s stock plummets 25% after massive earnings miss
https://www.cnbc.com/2024/05/30/kohls-kss-earnings-q1-2024.html

Kohl's Kohl's Reports First Quarter Fiscal 2024 Financial Results
https://investors.kohls.com/news-releases/news-details/2024/Kohls-Reports-First-Quarter-Fiscal-2024-Financial-Results/default.aspx

BEA  Gross Domestic Product, First Quarter 2024 (Second Estimate) and Corporate Profits (Preliminary)
https://www.bea.gov/news/2024/gross-domestic-product-first-quarter-2024-second-estimate-and-corporate-profits

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More CRE developments today and last week this time with a focus on Europe. New reports indicate losses are coming soon and data from the ECB shows why there are so many concerns. We also have the latest bank lending figures which show more troubling signs under the cover of 'extend and pretend.'

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ECB Commercial real estate and financial stability – new insights from the euro area credit register
https://www.ecb.europa.eu/press/financial-stability-publications/macroprudential-bulletin/html/ecb.mpbu202210_4~0aa7d44e15.en.html

Reuters Explainer: European banks and their $1.5 trillion commercial property headache
https://www.reuters.com/business/finance/european-banks-their-15-trillion-commercial-property-headache-2024-02-15/

S&P Global Investors expect surge in bad commercial real estate loans at European banks
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/investors-expect-surge-in-bad-commercial-real-estate-loans-at-european-banks-81618608

FitchRatings Global Contagion Risk Growing from Rising CRE Losses, Led by Office
https://www.fitchratings.com/research/non-bank-financial-institutions/global-contagion-risk-growing-from-rising-cre-losses-led-by-office-02-04-2024

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More data released today which shows the US economy has taken a turn for the worse. Consumers are running out of options and are turning in huge proportions to alternate means to stay afloat. One of those alternatives, however, is being closed off as the American banks are now actively cutting back risk while going on a buying binge for safety. 

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nerdwallet  2024 State of Consumer Credit Report
https://www.nerdwallet.com/article/credit-cards/2024-consumer-credit-report

CNBC 25% of consumers recently used a buy now, pay later loan, report finds. What to know as they become popular
https://www.cnbc.com/2024/05/28/buy-now-pay-later-loans-are-second-only-to-credit-cards-in-popularity.html

FRBNY HOUSEHOLD DEBT AND CREDIT REPORT (Q1 2024)
https://www.newyorkfed.org/microeconomics/hhdc

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What's misinformation about the economy? It's a well-known fact policymakers and Economists outright lie about any situation. But why? They say it's for your own good. The lies are beginning to pile up so much that officials now have to lie about their lies, including the very theory behind all of this especially when some of the theoreticians who came up with it no longer want to be the very purveyors of misinformation. 

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George DeMartino Should Economists Deceive? Prosocial Lying, Paternalism, and the ‘Ben Bernanke Problem’
https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1256&context=peri_workingpapers

DeLong & Summers How Does Macroeconomic Policy Affect Output?
https://www.brookings.edu/wp-content/uploads/1988/06/1988b_bpea_delong_summers_mankiw_romer.pdf

Brad DeLong Greater Depression
https://www.project-syndicate.org/commentary/j--bradford-delong-argues-that-it-is-time-to-call-what-is-happening-in-europe-and-the-us-by-its-true-name

Bank of England  Ben Bernanke to lead review into forecasting at Bank of England
https://www.bankofengland.co.uk/news/2023/july/ben-bernanke-to-lead-review-into-forecasting-at-bank-of-england

Bank of England Forecasting for monetary policy making and communication at the Bank of England: a review
https://www.bankofengland.co.uk/independent-evaluation-office/forecasting-for-monetary-policy-making-and-communication-at-the-bank-of-england-a-review/forecasting-for-monetary-policy-making-and-communication-at-the-bank-of-england-a-review

Mervyn King Per Jacobsson Lecture: The World Turned Upside Down: Economic Policy in Turbulent Times
https://meetings.imf.org/en/2019/Annual/Schedule/2019/10/19/imf-seminar-per-jacobsson

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It doesn't help that policymakers and Economists quite openly admit they will and even should lie to you about the state of the economy. But to go so far as to call legitimate and widely-shared criticism misinformation is taking this too far. The reason it is going this way is just how difficult the situation has become, which brings us back to the first point: who's actually telling the truth?

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Should Economists Deceive? Prosocial Lying, Paternalism, and the ‘Ben Bernanke Problem’
https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1256&context=peri_workingpapers

FoxNews Democrat claiming 'inflation rates are down' interrupted by higher than expected inflation report
https://www.foxnews.com/media/democrat-claiming-inflation-rates-down-interrupted-higher-expected-inflation-report

The Undecideds What Are Undecided Voters Really Thinking?
https://markhalperin.substack.com/p/what-are-undecided-voters-really

Bloomberg Fed’s Bostic Says Policy Is Taking Longer to Slow Growth
https://www.bloomberg.com/news/articles/2024-05-23/fed-s-bostic-says-policy-is-taking-longer-to-slow-growth

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After months of silence, a couple of critical developments from the beleaguered commercial real estate sector show up all at once. For the first time since the Global not-Financial Crisis, a senior tranche of a CLO took losses - a lot of losses - while redemptions threaten to force liquidations at one of the spaces more important CRE funds. Not good first signs for the bubble unwind.

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Bloomberg A Really Bad Sign for Commercial Real Estate
https://www.bloomberg.com/news/newsletters/2024-05-23/bloomberg-evening-briefing-a-really-bad-sign-for-commercial-real-estate

Bloomberg Starwood’s $10 Billion REIT Turns to Survival Mode as Real Estate Pain Lingers
https://www.bloomberg.com/news/articles/2024-05-23/starwood-reit-sets-drastic-redemption-limits-on-liquidity-crunch

Bloomberg Lenders Race to Buy Back Delinquent Multifamily Mortgage Loans
https://www.bloomberg.com/news/articles/2024-05-01/jpmorgan-says-commercial-real-estate-clo-loan-buyouts-are-set-to-reach-a-record

Fitch Global Contagion Risk Growing from Rising CRE Losses, Led by Office
https://www.fitchratings.com/research/non-bank-financial-institutions/global-contagion-risk-growing-from-rising-cre-losses-led-by-office-02-04-2024

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On top of dumping Treasuries (which I covered in detail in a previous video https://youtu.be/j00_S1iug9c), China's also dumping its excess production on the rest of the world. The tactic has become so pervasive governments worldwide are responding with more than idle threats. But what are they really worried about given this means cheaper stuff and lower prices? 

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Remarks by Secretary of the Treasury Janet L. Yellen at Press Conference Ahead of the G7 Finance Ministers and Central Bank Governors Meetings
https://home.treasury.gov/news/press-releases/jy2363

Reuters Yellen wants G7 'wall of opposition' to China's excess industrial capacity
https://www.reuters.com/markets/yellen-says-g7-discuss-responses-chinas-excess-industrial-capacity-2024-05-23/

Treasury Secretary Yellen on PBS
https://www.pbs.org/newshour/show/treasury-secretary-yellen-on-why-biden-is-targeting-chinese-manufacturing-with-new-tariffs

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The retail giant's latest earnings report confirmed...well, pretty much everything. Inflation risks, consumer capacities, the direction of interest rates and more. Target's results help setting the debate on prices while also dovetailing right in with a whole bunch of the latest figures on especially gasoline and even rents. 

Eurodollar University's Money & Macro Analysis

Target Corp First Quarter Earnings
https://corporate.target.com/press/release/2024/05/target-corporation-reports-first-quarter-earnings

Target Corp Press Release Lowering Prices
https://corporate.target.com/press/release/2024/05/target-will-help-consumers-save-big-by-lowering-prices-on-5,000-frequently-shopped-items

CNBC Target shares tumble 10% as consumers buy fewer groceries and home goods
https://www.cnbc.com/2024/05/22/target-tgt-q1-2024-earnings.html

BLS New Tenant Rent Index
https://www.bls.gov/pir/new-tenant-rent.htm

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There is a widespread feeling that something doesn't 'feel' right about the economic situation. While the official world vehemently denies it, they have every incentive not to admit the truth. There are various ways and methods to quantify living standards, especially material standards. Using officials' own methodology, we find the 'feeling' is very well grounded in material fact(s).

Eurodollar University's Money & Macro Analysis

Boston Fed How do We Measure Standard of Living
https://www.bostonfed.org/-/media/Documents/ledger/winter2004/livstand.pdf

CDC Drug Overdose Deaths
https://www.cdc.gov/nchs/products/databriefs/db491.htm

CDC Birth Stats
https://www.cdc.gov/nchs/nvss/births.htm

CDC Birth Rates
https://www.cdc.gov/nchs/data/hus/2020-2021/Brth.pdf

Christopher Waller Little by Little, Progress Seems to be Resuming.
https://www.federalreserve.gov/newsevents/speech/waller20240521a.htm

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Apple becomes just latest corporation to report results in line with recent macro statistics. That list now includes Home Depot and even today's Red Lobster bankruptcy. People are struggling and businesses are noticing and feeling the impact. But how far has it gone? Some other metrics are not encouraging. 

Eurodollar University's Money & Macro Analysis

Apple Second Quarter Earnings
https://www.apple.com/newsroom/2024/05/apple-reports-second-quarter-results/

CNBC Apple announces largest-ever $110 billion share buyback as iPhone sales drop 10%
https://www.cnbc.com/2024/05/02/apple-aapl-earnings-report-q2-2024.htm

CNBC Red Lobster files for Chapter 11 bankruptcy protection
https://www.cnbc.com/2024/05/20/red-lobster-bankruptcy.html

CNBC Home Depot misses on revenue, as high interest rates hurt sales
https://www.cnbc.com/2024/05/14/home-depot-hd-q1-2024-earnings-.html

CNBC Are consumers pulling back on spending? It depends on which CEO you ask
https://www.cnbc.com/2024/05/20/consumer-pullback-ceos.html

Bloomberg What Is Buy Now, Pay Later? How It Works and the Hidden Risks You Should Know
https://www.bloomberg.com/news/articles/2024-05-09/what-is-buy-now-pay-later-how-bnpl-plans-work

Bloomberg Treat Buy Now, Pay Later Loans Like Real Debt
https://www.bloomberg.com/opinion/articles/2024-05-14/treat-klarna-affirm-buy-now-pay-later-loans-like-real-debt

Bloomberg Americans Are Racking Up ‘Phantom Debt’ That Wall Street Can’t Track
https://www.bloomberg.com/news/articles/2024-05-07/-buy-now-pay-later-has-americans-racking-up-phantom-debt

Flex
https://help.getflex.com/hc/en-us/sections/360004885954-Get-Started

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Business at Walmart is brisk these days...and that's a big problem. The better things go for the company especially at the grocery department the worse you know it is in the economy. And the big retailer just put up robust results because it isn't just struggling Americans coming in to shop, Walmart is now getting tons of business from high-income earners, too, because now they're struggling. Not exactly the soft landing signal we'd hoped.  

Eurodollar University's conversation w/Steve Van Metre

NY Post Wealthier customers flock to Walmart to boost retailer’s sales in strong Q1 earnings
https://nypost.com/2024/05/16/business/wealthier-customer-flock-to-walmart-to-boost-retailers-sales-in-strong-q1-earnings/

Bloomberg Why We Can't Shake the Vibecession, Even in the Face of Good News
https://www.bloomberg.com/news/newsletters/2024-05-16/high-prices-and-phantom-debt-why-we-can-t-shake-the-vibecession

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The Chinese have sold a record amount of US Treasuries. Again. Most mainstream explanations point to political motives including many asserting an intentional act to move away from the dollar. The actual reason is indeed monetary but not at all in that way. The important immediate implications tell us a lot about the conditions for the globally synchronized economy.

Eurodollar University's Money & Macro Analysis

Bloomberg China Sells Record Sum of US Debt Amid Signs of Diversification
https://www.bloomberg.com/news/articles/2024-05-16/china-sells-record-sum-of-us-debt-amid-signs-of-diversification

CNN China has teased how it might fix its property crisis. Markets are loving it
https://www.cnn.com/2024/05/16/business/china-property-crisis-unsold-homes-hnk-intl/index.html

China NBS Basic situation of the national real estate market from January to April 2024
https://www.stats.gov.cn/sj/zxfb/202405/t20240517_1955760.html

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A major global central bank would never hike rates during a prolonged recession, would it? You might be surprised to find out the answer is a solid, yes. Not only did it just happen, the reasons why tell us a whole lot about the real aim of central bank policies, where they come from, and, more important of all, the status of our globally synchronized world. The cycle drama just got taken up a notch. 

Eurodollar University's Money & Macro Analysis

Bloomberg Japan’s Economy Sputters as Dismal Run Extends to Three Quarters
https://www.bloomberg.com/news/articles/2024-05-15/japan-s-economy-contracts-as-consumers-companies-cut-spending

Reuters Japan's economy skids, clouding BOJ's rate hike plans
https://www.reuters.com/markets/asia/japans-gdp-contracts-complicating-bojs-rate-hike-plans-2024-05-16/

Reuters Japan's finmin says 'speculative' moves in currency market impacting yen
https://www.reuters.com/markets/currencies/japans-finance-minister-sees-speculative-moves-currency-market-2024-04-01/

Investing.com Japan GDP shrinks more than expected in Q1 as consumption slows
https://www.investing.com/news/economic-indicators/japan-gdp-shrinks-more-than-expected-in-q1-as-consumption-slows-3443154

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They called it the most important economic update in living memory, holding the key to everything from inflation to economy and interest rates. When it came out, it wasn't what everyone thought and even more interesting those numbers ended up being overshadowed by another set alarmingly consistent with everything else we've been seeing lately. 

Eurodollar University's Money & Macro Analysis

BLS April US CPI press release
https://www.bls.gov/news.release/pdf/cpi.pdf

Bloomberg Here Are the Key Takeaways From US CPI Report for April
https://www.bloomberg.com/news/articles/2024-05-15/us-cpi-report-april-2024-key-takeaways-on-inflation-core-measure

Bloomberg US Retail Sales Stall After Downward Revisions in Prior Months
https://www.bloomberg.com/news/articles/2024-05-15/us-retail-sales-stall-after-downward-revisions-in-prior-months

CNN The backbone of America’s economy was just dealt a serious blow
https://www.cnn.com/2024/05/15/economy/us-retail-sales-april/index.html

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When the person who is supposed to help you find a job finds out they no longer have one themselves, that's a warning sign about the economy. Those have been proliferating lately and mostly focused on employment. This fits nicely (in a bad way) into other late cycle signals coming across including a sharp rise in consumer credit delinquencies. 

Eurodollar University's Money & Macro Analysis

Indeed Message from CEO
https://www.indeed.com/press/releases/a-message-from-our-ceo-chris-hyams-2

FRBNY HOUSEHOLD DEBT AND CREDIT REPORT (Q1 2024)
https://www.newyorkfed.org/microeconomics/hhdc.html

Liberty Street Economics Delinquency Is Increasingly in the Cards for Maxed‑Out Borrowers
https://libertystreeteconomics.newyorkfed.org/2024/05/delinquency-is-increasingly-in-the-cards-for-maxed-out-borrowers/

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China's total credit in April actually fell for only the third time and by the most ever. Clearly the government is alarmed by that as well as the distinct lack of traction in the real economy (more deflation in producer prices, minimal gains in consumer prices). We'll go over what was just reported, what the government's next government plan is likely to be, and what the market(s) reaction(s) has(have) been. 

Eurodollar University's Money & Macro Analysis

NYT Biden Looks to Thwart Surge of Chinese Imports
https://www.nytimes.com/2024/05/08/us/politics/biden-china-imports.html

WSJ China Hints at New Growth Push as it Warns of Rising Uncertainties
https://www.wsj.com/world/china/china-calls-long-delayed-policy-meeting-warning-of-rising-uncertainties-032fb571

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There is a resurgence underway not from consumer prices as everyone thinks, instead the use of the term "stagflation." This is really nothing more than the shift in narrative attempting to incorporate more visible economic weakness while still keeping it the idea "inflation." But as the former takes the forefront, the latter will continue to fade until what's left isn't even stagnation. 

Eurodollar University's conversation w/Steve Van Metre

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Another critical economic measures shows big negative changes and they aren't "inflation" problems. It's not just that American consumers are cracking, the consistent theme which keeps coming up over and over is jobs. The US labor market has been stuck in half a recession already, is this now the other half?

Eurodollar University's Money & Macro Analysis

UofM Surveys of Consumers
http://www.sca.isr.umich.edu/

CNBC Consumer sentiment tumbles as inflation fears surge, closely watched survey shows
https://www.cnbc.com/2024/05/10/consumer-sentiment-tumbles-as-inflation-fears-surge-closely-watched-survey-shows.html

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The one news article in the media said it all; more companies are now cutting their prices despite inflation. Except, no, it isn't in spite of other price changes, instead in response to them. The economy isn't inflationary, it is weak and getting weaker. Eye opening new data is alarmingly consistent with the price cuts. 

Eurodollar University's Money & Macro Analysis

CNN Retailers jacked up prices and squeezed consumers. They might have just blinked
https://www.cnn.com/2024/05/05/business/retailers-cutting-prices/index.html

Michaels Lowers Prices on Thousands of Arts, Crafts and DIY Items
https://www.michaelspressroom.com/news/detail/2293/michaels-lowers-prices-on-thousands-of-arts-crafts-and-diy

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Japan's government conducted three (unconfirmed) major currency interventions in less than a week. Already JPY is falling almost like they never happened. It's the dollar that's the matter because what's the matter isn't just Japan and like a lot of things energy is the key. As the Japanese understand all too well, energy means dollars. 

Eurodollar University's Money & Macro Analysis

Bloomberg BOJ’s Ueda Ramps Up Yen Warnings While Traders Keep Selling
https://www.bloomberg.com/news/articles/2024-05-08/boj-s-ueda-tweaks-weak-yen-remarks-in-possible-hint-of-rate-hike

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FreightWaves Texas’ Arnold Transportation acquired by Canada’s Pride Group Logistics
https://www.freightwaves.com/news/texas-arnold-transportation-acquired-by-canadas-pride-group-logistics

Global NewsWire Pride Group Logistics Expands U.S. Presence With the Acquisition of Arnold Transportation Services, Inc.
https://www.globenewswire.com/news-release/2022/02/01/2377007/0/en/Pride-Group-Logistics-Expands-U-S-Presence-With-the-Acquisition-of-Arnold-Transportation-Services-Inc.html

FreightWaves 92-year-old Texas trucking company files for bankruptcy liquidation
https://www.freightwaves.com/news/92-year-old-texas-trucking-company-files-for-bankruptcy-liquidation

Investopedia  Etsy Stock Dives as Retailer Warns of 'Challenging Environment' for Consumer Spending
https://www.investopedia.com/etsy-q1-2024-earnings-weak-consumer-spending-8642325

ISM Services April 2024
https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/services/april/

Eurodollar University's Money & Macro Analysis

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The first disappointment from payrolls in what seems like forever is only the start. It follows a number of increasingly ugly developments including a solid shocker from the US services sector - and its own measure of employment. In addition to reviewing the latest updates, Jeff and Steve also take apart the "dovish" QT myth that has popped up.

Eurodollar University's conversation w/Steve Van Metre

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What would the price of oil be without Saudi Arabia's actions? What would Treasury yields be without the Fed? There is a way for us to determine what the underlying fundamental monetary and financial conditions really are which offers a rough approximation for both. Crude would be a lot less and market interest rates, let's just say there's no inflation whatsoever in these fundamentals. 

Eurodollar University's Money & Macro Analysis

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We need to confront the fact there remains a serious problem in the US with Marxism. To successfully counter the threat REQUIRES first we understand why that is and what keeps it going. It's not enough to "clap back" with platitudes correctly pointing to Communism's barbaric history. Nor is the modern world's prosperity a sufficient counterargument. The true Socialist admits that's what capitalism was supposed to have accomplished. The entire matter revolves around whether that last statement truly is in the past tense. 

Eurodollar University's Money & Macro Analysis

the Atlantic Why the Phrase 'Late Capitalism' Is Suddenly Everywhere
https://www.theatlantic.com/business/archive/2017/05/late-capitalism/524943/

QUB Law Society Demystifying late stage capitalism on both a global and national level: the ball and chain of a 21st century free market economy 
https://www.theverdictonline.org/post/demystifying-late-stage-capitalism-on-both-a-global-and-national-level-the-ball-and-chain-of-a-21st

AP Archive CAN973 FILE / ARCHIVE FOOTAGE OF VLADIMIR LENIN
https://www.youtube.com/watch?v=1IJbNwt9J00

RCM July 10, 2020 Socialism Would Have Been Easy to Discredit, Had There Been Growth
https://www.realclearmarkets.com/articles/2020/07/10/socialism_would_have_been_easy_to_discredit_had_there_been_growth_498699.html

The Atlantic 26 Years of Growth: Shanghai Then and Now
https://www.theatlantic.com/photo/2013/08/26-years-of-growth-shanghai-then-and-now/100569/

NYT Nov 14, 1939
https://www.nytimes.com/1939/11/14/archives/browder-assails-pope-at-rally-here-he-tells-22000-at-the-garden.html

Time Magazine May 30, 1938
https://content.time.com/time/covers/0,16641,19380530,00.html

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Hiring has near completely dried up in the US labor market, contrary to all mainstream talk of a booming economy. JOLTS hires was the lowest since March and April 2020, and apart from those the worst in six and a half years. That substantial weakness was further corroborated by some of the biggest companies in the world reporting sharply lower results on increasing consumer difficulties. Yet, everyone will be focused entirely on the Fed and its absurd "inflation" fixation. 

Eurodollar University's Money & Macro Analysis

FOMC Chair Powell Press Conference Playback May 1, 2024
https://www.youtube.com/watch?v=o0unztmcLvA

USA Today
https://www.usatoday.com/story/money/2024/03/07/job-market-cooling-despite-high-employment-numbers/72846912007/
Behind the rosy job numbers, Americans are struggling to find work

Bloomberg Starbucks Posts First Sales Drop Since 2020 During Global Pullback
https://www.bloomberg.com/news/articles/2024-04-30/starbucks-sbux-sales-slump-as-customers-pull-back-across-the-world?srnd=all

Bloomberg  KFC Owner’s Sales Fall for First Time Since 2020
https://www.bloomberg.com/news/articles/2024-05-01/kfc-owner-s-sales-fall-for-first-time-since-2020-as-weakness-spreads

ISM Manufacturing Press Release
https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/april/

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Evidence for demand destruction in the US economy is really piling up. Consumer sentiment tumbled, services businesses in parts of the country are shedding workers in a way and to a degree we only see during recession, and major Midwest manufacturing plunged. All that was just today. The common theme through each one is a change in employment conditions and not the good one. 

Eurodollar University's Money & Macro Analysis

the Conference Board Consumer Confidence
https://www.conference-board.org/topics/consumer-confidence

Texas Service Sector Outlook Survey
https://www.dallasfed.org/research/surveys/tssos/2024/2404#tab-comments

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The first bank failure of 2024 is a familiar tale. A relatively small institution in Philadelphia, by itself it doesn't really mean all that much. However, there are a couple of important developments to go along with the background which raise questions and a few concerns. Is this the second chapter for the bank crisis?

Eurodollar University's Money & Macro Analysis

FDIC Press Release
https://www.fdic.gov/news/press-releases/fulton-bank-na-lancaster-pennsylvania-assumes-substantially-all-deposits

Republic First's last SEC filing
https://d18rn0p25nwr6d.cloudfront.net/CIK-0000834285/6c29a651-35e8-48f3-8803-6b7376b1ab7f.pdf

Republic First's last posted balance sheet
https://investors.myrepublicbank.com/financial-info/balance-sheet/default.aspx

Bloomberg's April 2024 report on FDIC soliciting bids
FDIC Is Approaching Potential Buyers of Republic First
https://www.bloomberg.com/news/articles/2024-04-24/fdic-is-said-to-approach-potential-buyers-of-republic-first

Bloomberg's October 2023 report on FDIC soliciting bids
FDIC Sought Buyers for Republic First Before Investor Deal
https://www.bloomberg.com/news/articles/2023-10-29/fdic-sought-buyers-for-republic-first-before-investor-deal

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This week's big miss in US GDP raises several questions about the state of the economy. It was significant enough to immediately call into doubt the soft landing. Last year's surge now appears to have been just a short run temporary jump, meaning GDP might be joining the majority of macro data indicating much sharper and more serious weakness than was though just before the data's release. 

Eurodollar University's conversation w/Steve Van Metre

S&P Global April 2024 flash PMIs
https://www.pmi.spglobal.com/Public/Home/PressRelease/2a6d069e95b3402f85a5e44e3ff49917

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It's not just that Japan's yen is crashing, it's what a yen crash means to everyone not only in Japan. But why? All you'll hear from the mainstream and most "experts" is that every currency exchange rate movement including JPY must be somehow related to a central bank, especially the Fed. It's a myth easily debunked. When doing the debunking the real truth emerges and it's not good. 

Eurodollar University's Money & Macro Analysis

Bloomberg Yen Drops Beyond 158 Per Dollar as BOJ Keeps Key Rate Unchanged
https://www.bloomberg.com/news/articles/2024-04-26/yen-drops-to-fresh-34-year-low-as-boj-keeps-key-rate-unchanged

Trilateral Ministerial Joint Press Statement
https://home.treasury.gov/news/press-releases/jy2264

FOMC Transcript February 1998
https://www.federalreserve.gov/monetarypolicy/files/FOMC19980204meeting.pdf

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GDP comes in the worst in two years because prices shot up again, therefore the term "stagflation" is going to be everywhere. Which prices changed actually makes a huge difference given the fact those particular prices are more likely to help the US economy get back to its depression tendencies. And on that count, we have irrefutable proof from oil, gasoline, and energy. 

Eurodollar University's Money & Macro Analysis

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Uncle Sam tried his best to buy a recovery. The sheer amount of money redistributed by the federal govt the past four years is incomprehensible. Here's the thing: the transfers didn't stop in 2021. A huge chunk of them kept going right on to today. And still it wasn't enough to stabilize an economy that is showing signs of even more weakening. 

Eurodollar University's Money & Macro Analysis

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Oil prices aren't inflationary, they're disinflationary. We are getting more proof right now as incoming data shows demand being destroyed. This is creating difficulties for the US economy on top of severe strain around the rest of the world. Several key markets are picking up the distress, too. 

Eurodollar University's Money & Macro Analysis

S&P Global Flash US Composite PMI https://www.pmi.spglobal.com/Public/Home/PressRelease/2a6d069e95b3402f85a5e44e3ff49917

Federal Reserve Financial Stability Report April 2024
https://www.federalreserve.gov/publications/files/financial-stability-report-20240419.pdf

Bloomberg China Is Front and Center of Gold’s Record-Breaking Rally
https://www.bloomberg.com/news/articles/2024-04-21/china-is-front-and-center-of-gold-s-record-breaking-rally

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The Fed's latest semi-annual report on financial risks contains a couple of important updates. First, we get a sense of where the systemic attempt to deal with the downside to the commercial real estate bubble stands. That also feeds into the most recent updates on US banks and the deteriorating credit environment. Plus, we also take a look at why the Fed's report singled-out the stock market and what that means. 

Eurodollar University's Money & Macro Analysis

Federal Reserve Financial Stability Report April 2024
https://www.federalreserve.gov/publications/files/financial-stability-report-20240419.pdf

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There is a tendency to conflate the behavior of consumer prices with the condition of the economy. With the current mania over recent CPIs in full bloom, fears extend into the real economy. Is it really "too hot?" Recent data from the Federal Reserve itself actually helps separate the facts from the misperceptions. 

Eurodollar University's conversations w/Steve Van Metre

Beige Book April 2024
https://www.federalreserve.gov/monetarypolicy/files/BeigeBook_20240417.pdf

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The world is starting to get the idea that rate hikes are not all they're cracked up to be. Yet, we're forced to focus endlessly on the Federal Reserve's interest rate policies. Why? The answer is really simple. More importantly, what's really going on in the economy? That answer is also pretty simple, too.

Eurodollar University's Money & Macro Analysis

Jay Powell Jackson Hole August 2023 Inflation: Progress and the Path Ahead
https://www.federalreserve.gov/newsevents/speech/powell20230825a.htm

FOMC Transcript July 2014
https://www.federalreserve.gov/monetarypolicy/files/FOMC20140730meeting.pdf

Ben Bernanke Jan 2009 The Crisis and the Policy Response
https://www.federalreserve.gov/newsevents/speech/bernanke20090113a.htm

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The Fed is all over the place, flip-flopping sometimes within a matter of weeks. They're confident about inflation then they're not. What's the real reason for so much back and forth, the obvious insecurity? It's the story no one really knows and what actually ties the current day with the past Great Inflation. 

Eurodollar University's Money & Macro Analysis

CSPAN William Proxmire
https://www.c-span.org/video/?322377-1/political-career-senator-william-proxmire

https://www.c-span.org/video/?39834-1/government-waste

https://www.c-span.org/video/?c4704392/sen-william-proxmire

Hutchinson v Proxmire
https://www.oyez.org/cases/1978/78-680

Federal Reserve Memo Nov 6, 1973 & letter from Arthur Burns to Senator Proxmire
https://fraser.stlouisfed.org/files/docs/historical/burns/Burns_19731106.pdf

NYT Dec 2, 1975 Proxmire Would Curtail Banks
https://www.nytimes.com/1975/12/02/archives/proxmire-would-curtail-banks.html

FOMC Transcript July 1981
https://www.federalreserve.gov/monetarypolicy/files/FOMC19810707meeting.pdf

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EURODOLLAR UNIVERSITY'S SPRING SALE STILL GOING FOR A LITTLE WHILE LONGER, DETAILS AT THE LINK BELOW
https://www.eurodollar.university/sales-page-spring

Updates from the US housing and energy sectors heavily rebuff the idea reflation. There is supposed to be resurgent demand when new data shows the opposite, including a shocking crash in one critical segment. Not only do they contradict reflation, these also expose the CPI. 

Eurodollar University's Money & Macro Analysis

Rent.com The Rent Report April 2024
https://www.rent.com/research/average-rent-price-report/

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EURODOLLAR UNIVERSITY'S SPRING SALE STILL GOING FOR A LITTLE WHILE LONGER, DETAILS AT THE LINK BELOW
https://www.eurodollar.university/sales-page-spring

UST yields are up somewhat sharply since early April, raising questions as to why that is. High on the public list of suspects is a government bond crisis for obvious Uncle Sam insanity reasons. Others point to possible reflation in higher yields. We do have a solid, historically validated answer for Treasuries, but it's written in German. 

Eurodollar University's Money & Macro Analysis

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EURODOLLAR UNIVERSITY'S SPRING SALE STILL GOING FOR A LITTLE WHILE LONGER, DETAILS AT THE LINK BELOW
https://www.eurodollar.university/sales-page-spring

Higher (slightly) interest rates and a couple rising commodities has brought back the reflation trade. For those to be valid, there would have to be widespread confirmation that a meaningful pickup in demand is brewing. Instead, there are huge holes including the most critical signal of them all. 

Eurodollar University's Money & Macro Analysis

Mining.com  Global copper smelters less active after China’s planned output cuts
https://www.mining.com/web/global-copper-smelters-less-active-after-chinas-planned-output-cuts/

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Is the Great Migration about to get worse? The answer starts in China where just the week the country already reported a sharp fall in consumer prices. CNY is down and so are government bond yields there. The Chinese also said the economy suffered a big drop in exports and then suffered a record low growth rate for lending. Banking woes, trade setbacks, further declines in growth and inflation expectations. The rest of the world is going to feel the effects.

Eurodollar University's Money & Macro Analysis

S&P Global Ratings
https://www.spglobal.com/ratings/en/research/articles/231127-economic-research-economic-outlook-emerging-markets-q1-2024-challenging-global-conditions-will-constrain-gr-12923458

Fitch Ratings Fitch Revises Outlook on China to Negative; Affirms at 'A+'
https://www.fitchratings.com/research/sovereigns/fitch-revises-outlook-on-china-to-negative-affirms-at-a-09-04-2024

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The economy is doing just fine according to many statistics, but according to most people it is anything but. Those aren't just idle malcontents, either. A fundamental fact of the current state of the world is that it will have to reckon for that economic pain and substantial loss. Many now merely believe that worst is behind is, but what if it is still lying just ahead?

Eurodollar University's conversations w/Steve Van Metre

FRB Philadelphia Q4 2023 Insights Report
https://www.philadelphiafed.org/surveys-and-data/2023-q4-large-bank

JP Morgan Chase Q1 2024 earnings
https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2024/1st-quarter/6678012b-9242-492b-acd0-1473eabade3c.pdf

Citigroup Q1 2024 earnings
https://www.citigroup.com/rcs/citigpa/storage/public/Earnings/Q12024/2024prq1.pdf

Wells Fargo Q1 2024 earnings
https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/earnings/first-quarter-2024-earnings.pdf

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Yesterday's US CPI reignited the fierce debate over a possibly sticky inflation future. China just ended it by reminding the world of its stubborn deflationary present with the third largest monthly CPI drop in the last twenty years. Producer prices also decline which is a solidly disinflationary signal for China and the world regardless of the latest consumer price numbers from elsewhere. 

Eurodollar University's Money & Macro Analysis

China's NBS Consumer prices press release
https://www.stats.gov.cn/sj/zxfb/202404/t20240411_1954446.html

China's NBS Producer prices press release
https://www.stats.gov.cn/sj/zxfb/202404/t20240411_1954447.html

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Another CPI comes in higher than expected. This isn't some harbinger of an impending price spiral, just the regular fluctuations in consumer prices driven largely by oil. It has stirred up inflation fears anyway in large part because it seems as if the CPI and especially the core rate is now stuck at a structurally higher rate. History cautions when making those assumptions.  

Eurodollar University's Money & Macro Analysis

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EURODOLLAR UNIVERSITY'S SPRING SALE STILL GOING FOR A LITTLE WHILE LONGER, DETAILS AT THE LINK BELOW
https://www.eurodollar.university/sales-page-spring

Hawkish policymakers, oil prices, higher for longer all over the media. Why are banks, not just central banks, already cutting rates? Contrary to what you hear in the mainstream, policymakers aren't actually all that hawkish. More importantly, global markets are pricing more assertively for fragility not soft landing.

Eurodollar University's Money & Macro Analysis

Bloomberg Goldman’s Marcus Frontruns Fed With Rate Cut on Savings Account
https://www.bloomberg.com/news/articles/2024-04-04/goldman-s-marcus-frontruns-fed-with-rate-cut-on-savings-account

Bloomberg State Street Sees Half-Point Fed Rate Cut as Soon as June
https://www.bloomberg.com/news/articles/2024-04-09/state-street-sees-half-point-fed-rate-cut-as-soon-as-june

Bloomberg Fed’s Kashkari Floats Possibility of No Rate Cuts This Year
https://www.bloomberg.com/news/articles/2024-04-04/fed-s-kashkari-floats-possibility-of-no-rate-cuts-this-year

Bloomberg Fed’s Kashkari Sees Two Rate Cuts in 2024, Potentially Just One
https://www.bloomberg.com/news/articles/2024-03-06/fed-s-kashkari-sees-two-rate-cuts-in-2024-potentially-just-one

Reuters Inverted yield curve no longer reliable recession flag, strategists say
https://www.reuters.com/markets/us/inverted-yield-curve-no-longer-reliable-recession-flag-strategists-say-2024-03-12/

NFIB March 2024 report
https://www.nfib.com/surveys/small-business-economic-trends/

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EURODOLLAR UNIVERSITY'S SPRING SALE STILL GOING FOR A LITTLE WHILE LONGER, DETAILS AT THE LINK BELOW
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What if gold and oil are actually trading on the same outcome? Despite popular misconceptions, a non-economic oil shock like the one we're currently experiencing is NOT inflationary. On the contrary, history shows it will almost certainly be disinflationary because of the negative impact it has on the economy. And if that impact is negative enough, that will lead to sharply lower interest rates - the very factor driving gold to all-time highs.

Eurodollar University's Money & Macro Analysis

Bloomberg  The Gold Market Hunts for Answers Behind Bullion’s Sudden Surge
https://www.bloomberg.com/news/articles/2024-04-07/the-gold-market-hunts-for-answers-behind-bullion-s-sudden-surge?fromMostRead=true

Bernanke, Gertler, Stock Systematic Monetary Policy and the Effects of Oil Price Shocks
https://www.brookings.edu/wp-content/uploads/1997/01/1997a_bpea_bernanke_gertler_watson_sims_friedman.pdf

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EURODOLLAR UNIVERSITY'S SPRING SALE STILL GOING FOR A LITTLE WHILE LONGER, DETAILS AT THE LINK BELOW
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Oil is up sharply as fears over a wider conflict in the Middle East continue to rise. Quite predictably, this has raised widespread concerns over renewed "inflation." But we just did this six months ago and that example shows what we should expect today and going forward. 

Eurodollar University's conversation w/Steve Van Metre

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EURODOLLAR UNIVERSITY'S SPRING SALE STILL GOING FOR A LITTLE WHILE LONGER, DETAILS AT THE LINK BELOW
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Yet another blowout payroll number from the government. Even though the BLS's "other" employment estimates managed a sharp rebound on the month, the difference between the two has become intolerable. How do we know which one might be closer to reality? We make a bunch of comparisons to see which way the weight of evidence falls. 

Also, every month has 28 days.

Eurodollar University's Money & Macro Analysis

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EURODOLLAR UNIVERSITY'S SPRING SALE STILL GOING FOR A LITTLE WHILE LONGER, DETAILS AT THE LINK BELOW
https://www.eurodollar.university/sales-page-spring

China's currency trading was wild yesterday, CNY moving just a few pips above the PBOC's daily limit. But then, the country closed down for the rest of this week leaving the whole world hanging as to what might happen next. Will yuan breach the daily band for the first time ever? Might the central bank relent like it usually does? More important than those, what does all this mean? The simplest "equation" in all economics holds the answer. 

Eurodollar University's Money & Macro Analysis

Japan Times Ex-finance official who warned of Japan's 2022 yen intervention sounds alarm
https://www.japantimes.co.jp/business/2024/04/03/markets/former-currency-chief-warns-of-yen-intervention/

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EURODOLLAR UNIVERSITY'S SPRING SALE STILL GOING FOR A LITTLE WHILE LONGER, DETAILS AT THE LINK BELOW
https://www.eurodollar.university/sales-page-spring

Monday's "strong" ISM manufacturing data sparked a whirlwind of inflation fear(mongering). Today's far more important and weak ISM non-manufacturing data barely took any notice. Why is that? The answer is obvious even though the latter series on services is far more important for the overall economy especially since these estimates for it are highly correlated with so many other critical variables. 

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Bloomberg June Fed Rate-Cut Odds Dip Below 50% After Strong ISM Data
https://www.bloomberg.com/news/articles/2024-04-01/treasury-yields-extend-climb-after-strong-ism-factory-gauges

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EURODOLLAR UNIVERSITY'S SPRING SALE STILL GOING FOR A LITTLE WHILE LONGER, DETAILS AT THE LINK BELOW
https://www.eurodollar.university/sales-page-spring

To hear everyone tell it, bond yields are surging. Losses in the marketplace are "piling up" allegedly because hawkish central bankers will be fighting inflation a lot longer than previously hoped since the economy is so insatiably red hot. Except, none of that is true; starting with bond yields. And we can check our work, too, in a way that actually touches the real world.

Eurodollar University's Money & Macro Analysis

Bloomberg Bond Market Sees Fewer Rate Cuts Than Fed, Deepening Losses
https://www.bloomberg.com/news/articles/2024-04-02/markets-back-to-seeing-fewer-rate-cuts-than-the-federal-reserve

Bloomberg Fed’s Daly Says Three Rate Cuts Is Reasonable Baseline for 2024
https://www.bloomberg.com/news/articles/2024-04-02/fed-s-daly-says-three-rate-cuts-is-reasonable-baseline-for-2024?srnd=fixed-income

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EURODOLLAR UNIVERSITY'S SPRING SALE STILL GOING FOR A LITTLE WHILE LONGER, DETAILS AT THE LINK BELOW
https://www.eurodollar.university/sales-page-spring

Gold continues to soar, hitting almost as many record highs as stocks. And that's a problem because unlike stocks gold tends to be a useful indicator and warning sign. There are three theories as to what's behind the golden surge. Here we examine the evidence and consistency of all three. 

Eurodollar University's Money & Macro Analysis

FRB Chair Jerome Powell Testimony to Senate Banking Committee March 7, 2024
https://www.c-span.org/video/?533955-1/federal-reserve-chair-testifies-monetary-policy-economy

CommercialEdge March 2024 Office Report
https://www.commercialedge.com/blog/national-office-report/

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It is critical to understand what is happening in China first of all. The country is suffering from a confluence of longer-term structural imbalances butting up against near-term strategies ostensibly aimed at minimizing the fallout. The risks are complex though in broad terms pretty easy to sketch out. They include potential impacts on global liquidity, one of the most misunderstood topics in finance. 

If are interested in Alf’s Macro Investment Fund, drop him an email for information at this address: [email protected] 

Alf’s Course: TheMacroCompass.substack.com 

Other Courses: https://themacrocompass.org/courses/

Eurodollar University's conversations w/Alfonso Peccatiello

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CHECK OUT EURODOLLAR UNIVERSITY'S SPRING SALE
https://www.eurodollar.university/sales-page-spring

What is it with banks these days? Well, this time it may not be the bank themselves. According to the latest data from the ECB, European depositories are lending loads to non-banks over there. That's not a good sign and in this video you'll see why that is - and why it isn't just Europeans who should be seriously concerned. 

Eurodollar University's Money & Macro Analysis

ECB Manual on MFI statistics
https://www.ecb.europa.eu/pub/pdf/other/ecb.manualmfibalancesheetstatistics202402~8e4fc2ccca.en.pdf

ECB November 2023 Financial Stability Review
https://www.ecb.europa.eu/press/financial-stability-publications/fsr/html/ecb.fsr202311~bfe9d7c565.en.html

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We keep getting more and more recession confirmation. Soft data comes in ugly and is easily corroborated by hard estimates from a variety of sources. The only part missing is the layoffs. Where are they? Part of the answer comes from hoarding, though the more important piece is not what you might think. 

Eurodollar University's Money & Macro Analysis

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The Japanese are really getting bothered by weakness in the yen. But where is it coming from, and what might be done about it? Officials in Tokyo are threatening to intervene again, but a review of past interventions shows not just the folly of any attempt, better yet some useful clues about what's really happening here. It isn't Japan.

Eurodollar University's Money & Macro Analysis

Bloomberg Japan Amps Up Intervention Threat as Yen Hits Lowest Since 1990
https://www.bloomberg.com/news/articles/2024-03-27/yen-drops-to-lowest-since-1990-amid-intervention-speculation

NYT Sept 1992 Agility Counts in Currency Chaos
https://www.nytimes.com/1992/09/17/business/market-place-agility-counts-in-currency-chaos.html

Japan Ministry of Finance Foreign Exchange Operations
https://www.mof.go.jp/english/policy/international_policy/reference/feio/quarter/index.html

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As more signs of instability pile up around the world but also coming from inside the US. Those are evidence for the continuing downside to the supply shock, the same cycle, not a soft landing. What are the key differences? Employing a few critical datapoints it's easy to see how much of a divergence there already has been and what that likely means for the upcoming period. 

Eurodollar University's Money & Macro Analysis

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Something just hit the US banking system. Tons of cash gone from their balance sheet seemingly as they reallocate their assets. At the same time this is going on, the dollar has surged against primarily Asian currencies rocking those countries and leading to several government backlashes. Are these all related? The answer appears to be, yes.

Eurodollar University's Money & Macro Analysis

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The bedrock assumption for a soft landing in the US is continued consumer spending. The economy around the world really needs Americans to keep spending at close to the same rate. Instead, more evidence is coming in that they are just out of gas. In addition to macro statistics, more retailers are confirming the downturn and no longer just those who sell to lower-income consumers.  

Eurodollar University's conversation w/Steve Van Metre

Target Introduces New Brand, dealworthy, Featuring Low Prices on Everyday Basics
https://corporate.target.com/press/release/2024/02/target-introduces-new-brand,-dealworthy,-featuring-low-prices-on-everyday-basics

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It isn't prospective rate cuts, the downward bias in market interest rates comes from real risks in the global system. The biggest of those are US commercial real estate (CRE) and China. Key developments in both show that the situation is fragile and that difficulties are serious even if playing out mainly in the shadows. 

Eurodollar University's Money & Macro Analysis

Bloomberg Real Estate Pain Is Showing Up in an Obscure Investment Product
https://www.bloomberg.com/news/articles/2024-03-19/real-estate-pain-is-showing-up-in-collateralized-loan-obligations-clos

BloombergTV with Carson Block
https://www.bloomberg.com/news/videos/2024-03-19/carson-block-warms-to-blackstone-mortgage-trust-short-video

Bloomberg Short Seller Block Says He’s Even ‘More Bearish’ on Blackstone Mortgage Trust
https://www.bloomberg.com/news/articles/2024-03-19/block-says-he-s-even-more-bearish-on-blackstone-mortgage-trust

SCMP China Vanke secures US$194 million loan from Industrial Bank in brief respite for troubled property developer
https://www.scmp.com/business/article/3256021/china-vanke-secures-us194-million-loan-industrial-bank-brief-respite-troubled-property-developer

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Few were expecting anything more than a few franc sales from the Swiss National Bank today. Instead, the SNB boldly cut its ST rate specifically because it knows what's coming from around the rest of the world. And that doesn't mean inflation in Switzerland or anywhere else.

Eurodollar University's Money & Macro Analysis

SNB Monetary Policy Assessment March 21, 2024
https://www.snb.ch/en/publications/communication/press-releases-restricted/pre_20240321

SNB Introductory remarks, news conferencehttps://www.snb.ch/en/publications/communication/speeches-restricted/ref_20240321_tjnmslanmar

Taiwan Ministry of Economic Affairs
https://www.moea.gov.tw/Mns/dos_e/bulletin/Bulletin_En.aspx?kind=14&html=1&menu_id=6744&bull_id=16037

ECB Combined monetary policy decisions and statement 7 March 2024
https://www.ecb.europa.eu/press/pressconf/shared/pdf/ecb.ds240307~8e06c79bf2.en.pdf?e86e578f1a99fdaa095a37dc4f1f6355

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A wild FOMC meeting triggered by a rejiggering of the dots. Those don't really matter except as insight into how confused policymakers have become. Why are they confused? Rate hikes don't appear to be working, so they are having a hard time deciding what should happen next. Markets aren't so conflicted, only about the likeliest path for ST rates. 

Eurodollar University's Money & Macro Analysis

FOMC March 2024 Policy Statement
https://www.federalreserve.gov/monetarypolicy/files/monetary20240320a1.pdf

FOMC March 2024 Summary of Economic Projections
https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240320.pdf

CSPAN: President Biden Campaign Remarks March 8, 2024
https://www.c-span.org/video/?534118-1/president-biden-delivers-campaign-remarks-philadelphia

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Well, they did it. The Bank of Japan ended its NIRP and YCC, raising its call money rate for the first time in forever. That's not the issue. Why they did it is open for debate, one that right now is taking place across markets. It's not going well for the rate-hikers. 

Eurodollar University's Money & Macro Analysis

BoJ Statement March 19, 2024
https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2024/k240319a.pdf

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The Fed. Japanese destiny. Down Under. The Old Lady, Mexico, Brazil, and the Czech Republic. And those are just the start. A ton of central banks are going to be deliberating just this week. And while their policies don't really mean much to the economy, they can impact markets in the short run while also providing some somewhat useful clues about where the world really stands. Here's what to look for as it unfolds. 

Eurodollar University's Money & Macro Analysis

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The Fed shut down the BTFP, but just before it closed billions in loans were made to banks over the repeated objections of policymakers. Officials have been pushing depositories toward the Discount Window to the point even the FHLB system is dissuading its members from using its own advances as emergency liquidity. Yet, the last-minute BTFP indicates banks just aren't doing it with some substantial implications. 

Eurodollar University's conversation w/Steve Van Metre

FHFA FHLBank System at 100: Focus On the Future
https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FHLBank-System-at-100-Report.pdf

FHFA Fact Sheet 
https://www.fhfa.gov/Media/PublicAffairs/PublicAffairsDocuments/FHLBank-System-at-100-Fact-Sheet.pdf

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China just held its National People's Congress amidst more economic and financial turmoil than at any time in its modern history. Two things quickly became clear: Xi Jinping continues to insulate himself politically from any potential fallout; his government has no idea what to be about it. The latest data from Chinese banks and the country's housing market highlight the gravity of the situation  and how little policies are helping. 

Eurodollar University's Money & Macro Analysis

People's Daily Graphic and Text Database
http://paper.people.com.cn/rmrb/html/2024-02/02/nw.D110000renmrb_20240202_3-03.htm

China State TV The Opening Meeting of the Second Session of the 14th NPC
https://www.youtube.com/watch?v=nL7iqyx-dBA

Bloomberg China Vanke’s Dollar Bonds Signal Fears of Default Down the Road
https://www.bloomberg.com/news/articles/2024-03-13/china-vanke-s-dollar-bonds-signal-fears-of-default-down-the-road

Bloomberg China Sets GDP Goal That Needs Policy Support ‘From All Fronts’
https://www.bloomberg.com/news/articles/2024-03-05/china-s-gdp-growth-target-this-year-set-around-5-reuters-says

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More recession signals. We've got the major dollar store chains in the US closing stores and reporting troubling results about consumer behavior. Those are now backed up by hard evidence in the form of retail sales, which have been much worse than initial thought. Behind everything, the looming recession, is the fact oil prices are NOT inflation nor inflationary. 

Eurodollar University's Money & Macro Analysis

Dollar General Q4 2023 results
https://investor.dollargeneral.com/websites/dollargeneral/English/2120/us-press-release.html?airportNewsID=977d63ef-cf4e-4b0b-bd80-624b382724f6

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Is "inflation" back? A big part of the answer to that question comes from the oil market, though not at all in the way you might think. A revisit of the 2008 crude oil bubble/shock to see what it can tell us about a lot more than consumer prices in 2024.

Eurodollar University's Money & Macro Analysis

OPEC March 2024 Announcement
https://www.opec.org/opec_web/en/press_room/7305.htm

Remarks by Governor Ben S. Bernanke October 21, 2004
https://www.federalreserve.gov/boarddocs/speeches/2004/20041021/

James D. Hamilton Brookings Causes and Consequences of the Oil Shock of 2007–08
https://www.brookings.edu/wp-content/uploads/2016/07/2009a_bpea_hamilton-1.pdf

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Today is the last day for new loans from the Fed's BTFP, and there is still $165 billion being borrowed from it. In fact, that balance increased just last week. What are the implications of the shutdown? We keep coming back to the same factor which was all over last March. And with CRE looming in the background, too. 

Eurodollar University's Money & Macro Analysis

As serious economic weakness begins to increasingly show itself, the Fed is going to pivot and thereby try to sell the public on lower rates as somehow being something positive. A small bit of economy insurance and nothing more. And they'll point to 1995 as for why. In reality, this is already nothing like thirty years ago.

Eurodollar University's conversations w/Steve Van Metre

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Evidence for US recession and labor market woes are getting much stronger. While everyone fixates on the growing absurdity of the payroll revisions, the CPS data threw up THREE very strong recession signals, each historically validated, showing this isn't a short-term fluctuation or narrow, isolated occurrence. Plus, a fourth signal that is entire consistent with those other three. Employment recession changes everything.

Eurodollar University's Money & Macro Analysis

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Full Disclosure: Jeff has worked with Mr. Saxe as a trustee for a stablecoin project Ryne is the COO for. 

The mainstream image of cryptocurrencies is cowboys and charlatans playing around with technology that doesn't seem to have any practical use. Kids are getting rich - many going broke - on what can appear to be trivial functions. Reality couldn't be farther from the truth. As Ryne points out, one key problem is that those who are indeed making a good-faith effort at making something and making it work are losing at the narrative. Worse, the government is no help (no surprise). Even so, there is tremendous progress being made right now in turning these digital projects into useful, usable money. 

Eurodollar University's Money & Macro Analysis

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China's 10-year government bond yield just reached a 20-year low. UST yields are moving down again. What does it all mean; more importantly why do we need to care? It isn't just the signal bond curves provide, it is just as much the lack of direct access to the information we truly need. 

Eurodollar University's Money & Macro Analysis

FOMC Transcript February 1999
https://www.federalreserve.gov/monetarypolicy/files/FOMC19990203meeting.pdf

BIS CGFS Papers No 65 US dollar funding: an international perspective
https://www.bis.org/publ/cgfs65.pdf

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Evidence continues to show we're in half a recession already. There is a huge discrepancy between the "strong" US employment in the media and what's actually happening. Even mainstream sources are being forced to deal with how different the jobs market is to those actually experiencing it. These aren't isolated cases or stories, the data backing them up continues to pile up. 

Eurodollar University's Money & Macro Analysis

CNBC Economists say the labor market is strong — but job seekers don’t share that confidence. Here’s why
https://www.cnbc.com/2024/02/02/why-it-feels-so-hard-to-get-a-job-right-now.html

Insight Global 
https://www.prnewswire.com/news-releases/unemployed-and-unmotivated-new-survey-finds-that-over-half-of-unemployed-americans-are-feeling-the-job-hunt-burnout-big-time-301909524.html

Reddit r/jobs
https://www.reddit.com/r/jobs/comments/16aetk9/the_job_market_is_awful_2023/

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Gold is high but not on Waller. Fed Governor Chris Waller seems to have sparked the most recent jump in the metal, with people jumping all over their inference of some incoming Reverse Operation Twist. Untangling the fedspeak from so many huge misconceptions about gold - it is a TERRIBLE inflation hedge, as you'll see - in order to make sense of another legit red flag. 

Eurodollar University's Money & Macro Analysis

FRB Christopher Waller Thoughts on Quantitative Tightening, Including Remarks on the Paper "Quantitative Tightening around the Globe: What Have We Learned?"
https://www.federalreserve.gov/newsevents/speech/waller20240301a.htm

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It's bad enough that China's shakiest real estate firms are going to be creating big losses and not just for other Chinese financials. Now comes word the last remaining investment grade developer is rumored to be experiencing liquidity trouble, too. It is a sign of further progress - in the wrong direction. We need to understand what it means when Beijing is this impotent.

Eurodollar University's Money & Macro Analysis

Digital technology is revolutionizing every aspect of our lives, now including money. The first in a three-part series as Jeff travels to ETH Denver, the world's preeminent Ethereum conference, to start digging in to digital with those who are actually doing it, the insiders. Up first, world-renowned scholar, investor and, yes, philosopher-historian Manny Rincon Cruz.

Eurodollar University's conversations w/Manny Rincon Cruz

Eurodollar University's conversations w/Steve Van Metre

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Eurodollar University's Money & Macro Analysis

AP US national debt hits record $34 trillion as Congress gears up for funding fight
https://apnews.com/article/national-debt-deficits-biden-economy-inflation-record-b4258704f830c7f6e9c5e693748216cb

Milton Friedman Newsweek “Deficits and Inflation"
https://miltonfriedman.hoover.org/internal/media/dispatcher/214251/full

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Unlike most terms thrown around Economics, 'globally synchronized' is no joke. It also isn't a recent development. Throughout modern history, when a sizable portion of the world starts to show contraction it will spread throughout the rest with very few spared. It is a poignant reminder given how the same is happening right now. 

Eurodollar University's Money & Macro Analysis

BoJ New Procedures for Money Market Operations and Monetary Easing Mar 19, 2001
https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2001/k010319a.htm

Speech given by Kazuo Ueda, Member of the Policy Board of the Bank of Japan, at Council on Foreign Relations in New York, May 11, 2001 https://www2.boj.or.jp/archive/en/announcements/press/koen_2001/ko0105a.htm

Speech by Dr. Willem F. Duisenberg, President of the European Central Bank, at Central Bankers' Panel at the International Monetary Conference, Singapore, 4 June 2001
https://www.ecb.europa.eu/press/key/date/2001/html/sp010604.en.html

FOMC Transcript November 1979
https://www.federalreserve.gov/monetarypolicy/files/FOMC19791120meeting.pdf

Silent Revolution: The International Monetary Fund, 1979–89,
https://www.imf.org/external/pubs/ft/silent/index.htm

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Japan is in recession, one that is getting worse. Japanese officials tell you not to believe your lying eyes, inflation is the greatest risk. All the data conclusively shows it is not, that Japan's contraction is a product of global forces that just so happen to be taking care of Japanese "inflation" risks, too. That's NOT a good sign. 

Eurodollar University's Money & Macro Analysis

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How accurate are market tools like spreads? If you're looking for absolute precision, you're in the wrong business. These measures are highly useful for broad purposes. Unfortunately, history shows those point in the direction of serious general economic misadventures. 

Eurodollar University's Money & Macro Analysis

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Eurodollar University's conversations, Guests Lyn Alden & George Gammon

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#lynalden

The Federal Reserve "prints" bank reserves, that's it. To understand why that matters, you have to understand where bank reserves came from and what they were and are intended for. It isn't at all what you think. But don't take my word for it; that comes straight from the Fed itself. 

Eurodollar University's Money & Macro Analysis

FRB Atlanta The Evolution of the Check as a Means of Payment: A Historical Survey, November 2008
https://www.atlantafed.org/-/media/documents/research/publications/economic-review/2008/vol93no4_quinn_roberds.pdf

FRB Banking and Monetary Statistics 1914-41
https://fraser.stlouisfed.org/files/docs/publications/bms/1914-1941/BMS14-41_complete.pdf

FOMC Transcript July 1981
https://www.federalreserve.gov/monetarypolicy/files/FOMC19810707meeting.pdf

FOMC Transcript October 1979
https://www.federalreserve.gov/monetarypolicy/files/FOMC19791006meeting.pdf

FOMC Transcript March 1991
https://www.federalreserve.gov/monetarypolicy/files/FOMC19910326meeting.pdf

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If you happened to miss today's Webinar on CRE and the possible dangers from it, you can still watch the replay. Follow the link below.
https://event.webinarjam.com/go/replay/23/1ym21crukhgh4

The FOMC's minutes for its January meeting shed light on the dilemma currently hitting policymakers. They're seeming embrace of the lower rates from last bond rally was no fluke. They instead share our growing and NOTABLE concerns over possible substantial fallout from CRE. However, they also can't help themselves whenever Phillips drops by. 

Eurodollar University's Money & Macro Analysis

FOMC Minutes January 2024
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20240131.pdf

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Another rash of layoffs is sweeping the US economy and its labor market. Only this time, unlike last year, the background behind them is far more concerning and even dangerous (economically, speaking). Those threatened by being thrown out of work know the score isn't entirely made up from those job cuts. It's actually the grim reality of no hiring. 

Eurodollar University's Money & Macro Analysis

CNBC Worries grow over a K-shaped economic recovery that favors the wealthy
https://www.cnbc.com/2020/09/04/worries-grow-over-a-k-shaped-economic-recovery-that-favors-the-wealthy.html

Bloomberg How Companies Say ‘Layoffs’ Without Saying ‘Layoffs’
https://www.bloomberg.com/news/articles/2024-02-09/corporate-layoffs-all-the-ways-companies-say-someone-is-unemployed

CNBC As companies lay off even more workers, they could be making a big mistake in the way they’re doing it
https://www.cnbc.com/2024/01/20/as-companies-lay-off-even-more-workers-they-could-be-making-a-mistake.html

Challenger, Gray & Christmas
https://www.challengergray.com/blog/job-cuts-announced-by-us-based-companies-surge-136-to-82307-to-begin-2024-financial-tech-lead/

Bloomberg Job Cuts Are Sending a Chill Through the Remote Work World
https://www.bloomberg.com/news/articles/2024-02-21/layoffs-make-remote-workers-reconsider-work-from-home-jobs?srnd=economics-v2

Transcript of Chair Powell’s Press Conference November 1, 2023
https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20231101.pdf

Canadian Survey of Consumer Expectations—Third Quarter of 2023
https://www.bankofcanada.ca/2023/10/canadian-survey-of-consumer-expectations-third-quarter-of-2023/

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If you happened to miss today's Webinar on CRE and the possible dangers from it, you can still watch the replay. Follow the link below.
https://event.webinarjam.com/go/replay/23/1ym21crukhgh4

Chinese "banks" opted for an unusually large cut to China's benchmark 5-year Loan Prime Rate. In truth, that appears at the behest of Beijing where authorities are becoming increasingly desperate. Nothing they are doing is working - and Chinese banks know it. China has a growing bank problem on its hands before any of its other major problems.

Eurodollar University's Money & Macro Analysis

Bloomberg China’s Bold Mortgage Rate Cut Met With Lukewarm Reaction
https://www.bloomberg.com/news/articles/2024-02-20/chinese-banks-cut-mortgage-reference-rate-by-most-on-record

CNBC China boosts property funding with first cut in key loan rate since June
https://www.cnbc.com/2024/02/20/china-cuts-benchmark-5-year-lending-rate-for-the-first-time-since-june.html

Monetary policy shocks and the signaling channel of monetary policy in China
https://www.sciencedirect.com/science/article/pii/S2666933123000047?ref=pdf_download&fr=RR-2&rr=85898a601dfcdb01

Bloomberg China’s Property Crisis Is Starting to Ripple Across the World
https://www.bloomberg.com/news/articles/2024-02-09/china-s-real-estate-crisis-is-starting-to-ripple-across-the-world

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If you happened to miss today's Webinar on CRE and the possible dangers from it, you can still watch the replay. Follow the link below.
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As more countries around the world "unexpectedly" succumb to recession, the consequences aren't strictly economic. While globally synchronized means many more will follow, the costs need to be accounted for in human terms. Why does it feel like half the planet is on the move? It's the economy, stupid. 

Eurodollar University's Money & Macro Analysis

Skynews 8,000 migrants travel to southern border as election looms
https://www.youtube.com/watch?v=iKgRbVGO2XU

Autumn 2022 Economic Forecast: The EU economy at a turning point
https://economy-finance.ec.europa.eu/economic-forecast-and-surveys/economic-forecasts/autumn-2022-economic-forecast-eu-economy-turning-point_en

EC Autumn 2023 Economic Forecast: A modest recovery ahead after a challenging year
https://ec.europa.eu/commission/presscorner/detail/en/ip_23_5743

Winter 2024 Economic Forecast: A delayed rebound in growth amid faster easing of inflation
https://ec.europa.eu/commission/presscorner/detail/en/ip_24_730

Fitch Ratings
https://www.fitchratings.com/research/sovereigns/world-growth-to-fall-sharply-in-2024-us-recession-avoided-08-12-2023

Federal Reserve Financial Stability Report Oct 2023
https://www.federalreserve.gov/publications/files/financial-stability-report-20231020.pdf

World Bank Global Economic Prospects June 2023 https://openknowledge.worldbank.org/server/api/core/bitstreams/6e892b75-2594-4901-a036-46d0dec1e753/content

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It's a recession rash. Economic growth expectations slashed, "unexpectedly", of course. Technical recessions spreading around the world's major economies because real ones are. Yet, still the idea of a US decoupling persists resting largely on a few past-tense stats and, most of all, equity investors. 

Eurodollar University's conversation w/Steve Van Metre

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There are a lot of parallels now and the 1970s - and inflation isn't actually one of them. The whole world saw recession coming in 1979, even that vast majority of those on the FOMC. Except, there was no recession in '79. It's what leads up to contraction that matters, not when it finally gets noticed. 

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This is getting out of hand. Not only is it a major risk and not just to those "invested" in equities, there are several deeply troubling reasons to care why several major economy stock indexes are setting new highs while the economies allegedly tied to them suffer substantial now-recognized recessions. This isn't going to end well. 

Eurodollar University's Money & Macro Analysis

Investing.com Japan’s Nikkei 225 near record high as Q4 recession dents BOJ pivot bets
https://www.investing.com/news/stock-market-news/japans-nikkei-225-near-record-high-as-q4-recession-dents-boj-pivot-bets-3304175

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Stocks keep hitting new highs yet one of those markets which is doing just that also proves that it can't be because of the economy. This one leaves little doubt especially as so many other markets pile on with their views (not even talking bonds here). Stocks are buying a 'liquidity' story, not actual real world fundamentals. 

Eurodollar University's Money & Macro Analysis

Magnificent 7 Concentration
https://www.investopedia.com/magnificent-7-stocks-overcrowding-8576644

CNN Germany’s stock market just hit a new record high despite a faltering economy. What gives?
https://www.cnn.com/2023/12/06/investing/german-stock-market-dax-record-high/index.html

Investopedia DAX
https://www.investopedia.com/terms/d/dax.asp

BloombergNEF Copper Prices May Jump 20% by 2027 as Supply Deficit Rises
https://about.bnef.com/blog/copper-prices-may-jump-20-by-2027-as-supply-deficit-rises/

ING Aluminium surplus to persist as demand disappoints
https://think.ing.com/articles/aluminium-surplus-to-persist-as-demand-disappoints/

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No one remembers the "red hot" and "sticky" supply shock of 2010 and 2011 BECAUSE it was, yes, transitory. The Fed didn't need to raise rates or do anything. In fact, the FOMC was busy with more "accommodating" policies like Operation Twist and then two more QEs, yet consumer prices disinflate-d anyway. Outside of one artificial piece of the CPI, the January 2024 version was in every other way just like back then.

Eurodollar University's Money & Macro Analysis

CNNMoney Consumer prices up 2.1% in past year
https://money.cnn.com/2011/03/17/news/economy/cpi_inflation/index.htm

Boston Fed Eric Rosengren A Look Inside a Key Economic Debate: How Should Monetary Policy Respond to Price Increases Driven by Supply Shocks?
https://www.bostonfed.org/news-and-events/speeches/a-look-inside-a-key-economic-debate-how-should-monetary-policy-respond-to-price-increases-driven-by-supply-shocks.aspx

FOMC Transcript September 2011
https://www.federalreserve.gov/monetarypolicy/files/FOMC20110921meeting.pdf

December 2011 Tealbook
https://www.federalreserve.gov/monetarypolicy/files/FOMC20111213tealbooka20111207.pdf

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China's yuan has been constantly put forward as a contender to 'dethrone' the dollar. Whatever sliver of a tiny chance it may have had before, it's zero now. The greater challenge is how to replace the existing reserve regime which does need an update. But that means eurodollar NOT dollar. This is not a trivial distinction; it is, in fact, everything. 

Eurodollar University's Money & Macro Analysis

FRBNY Monthly Review November 1960
https://fraser.stlouisfed.org/files/docs/publications/frbnyreview/rev_frbny_196011.pdf?utm_source=direct_download

BIS Quarterly Review June 2012
https://www.bis.org/publ/qtrpdf/r_qt1206f.pdf

Bloomberg A 99% Bond Wipeout Hands Hedge Funds a Harsh Lesson on China
https://www.bloomberg.com/news/articles/2024-02-08/a-99-bond-wipeout-hands-hedge-funds-a-harsh-lesson-on-china

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Eurodollar University's conversations w/Ken McElroy

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The more they tell us how great everything is, the more you know it isn't. Americans like their compatriots from around the world know something isn't right. We've seen this kind of divergence from "elite" opinion, descriptions, even mainstream labor data before. Long and silent depression. 

Eurodollar University's Money & Macro Analysis

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You might be amazed at just how much Chinese authorities have tried to stabilize their system. If you knew, you'd understand why so much of Beijing is verging on panic-mode. The huge response has come up empty which is a clear signal for how much trouble there really is. For his part, Xi Jinping purged another official unsurprisingly related to financial markets (stocks).  

Eurodollar University's Money & Macro Analysis

Bloomberg Xi’s Markets Shakeup Surprised Insiders, Showing Alarm Over Rout
https://www.bloomberg.com/news/articles/2024-02-08/xi-s-markets-shakeup-surprised-insiders-showing-alarm-over-rout

China's Securities Regulator
http://www.csrc.gov.cn/csrc_en/c102030/common_list.shtml?channelid=84bedf81e76a4c20b9f43a7c7190519b

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What's behind the renewed banking woes? Sure, we know it almost certainly has to do with commercial real estate, but we need to get a sense of how much trouble that might lead to. Digging into what information we have available, let's put some hard numbers on the CRE bubble while we go over the latest developments among the US regionals. 

Eurodollar University's Money & Macro Analysis

Financial Accounts of the United States (Z1)
https://www.federalreserve.gov/releases/z1/

Greenstreet Commercial Property Price Index
https://www.greenstreet.com/insights/CPPI

Brookline Bancorp Q4 2023 results
https://www.globenewswire.com/news-release/2024/01/24/2816078/0/en/Brookline-Bancorp-Announces-Fourth-Quarter-Results.html

BankUnited Inc Q4 2023 results
https://ir.bankunited.com/news-releases/news-release-details/bankunited-inc-reports-2023-results

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According to these historically validated datapoints, the worst is straight ahead for the US in 2024. In just two charts, we can place together three critical pieces of macroeconomic information which provides a useful guide for determining cyclical circumstances in the US economy. Bank lending, commercial borrowing and, most important, commercial employing. 

Eurodollar University's Money & Macro Analysis

Federal Reserve SLOOS
https://www.federalreserve.gov/data/sloos.htm

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After an "unexpected" late 2023 plunge, oil prices rebounded and the WTI curve even managed to flip from contango to backwardation. Rather than point to a firming global situation, the latest move in the crude market instead proves it was just Red Sea shipping fears. A shocking collapse in German trade reminds us of what oil's fundamentals really are.

Eurodollar University's Money & Macro Analysis

IEA Monthly Oil Report December 2023
https://www.iea.org/reports/oil-market-report-december-2023

IEA Monthly Oil Report January 2024
https://www.iea.org/reports/oil-market-report-january-2024

ECB Combined Policy Decision and Statement January 2024
https://www.ecb.europa.eu/press/pressconf/shared/pdf/ecb.ds240125~d65b43331a.en.pdf?18350e063857b7aa27302e03a8f721d5

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Even though we don't yet have a topic or a possible guest scheduled, you can still sign up for the next EDU webinar anyway which will take place on Monday, February 19 at 6:30pm EDT. Link here:
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It's not just the payroll data that is conflicted with itself, there are a number of other mainstream sources where the economic situation depicted by them could not be more different. Stepping back and looking at it all, we end up finding more lining up one way than the other. As Jay Powell prepares to take a victory lap, if he hasn't already he may want to temper his enthusiasm.

Eurodollar University's conversations w/Steve Van Metre

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Even though we don't yet have a topic or a possible guest scheduled, you can still sign up for the next EDU webinar anyway which will take place on Monday, February 19 at 6:30pm EDT. Link here:
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This is getting ridiculous. We've become used to seeing Est. Survey vs. HH Survey in US labor data, but now it's Est. Survey vs. Est. Survey. The headline payroll number shows one thing, then the rest of the same data says the exact opposite. What in the hell is going on in the jobs report?

Eurodollar University's Money & Macro Analysis

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