Jeffrey P. Snider | TalkMarkets | Page 136
Chief Investment Strategist
Contributor's Links: Eurodollar University
Jeff is an Investment Strategist and currently runs Eurodollar University. Formerly the Head of Global Investment Research for Alhambra Investment Partners, Jeff spearheaded the investment research efforts while providing close contact to Alhambras client base. Jeff joined Atlantic Capital ...more

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Trying To Define Liquidity
Everyone on Wall Street in September 1998 was talking about LTCM not just because they were worried but because they smelled opportunity.
Why JPY?
One of the most prominent features of the “rising dollar”, was an out of control shortage in FX basis. Though cross currency basis swaps with Japan received all the attention, the basis was off against the euro, franc, and a host of other majors.
Unfortunately An ‘Official’ End To The Rising Dollar Isn’t More
TIC data confirms that “reflation” captured more than just pricing sentiment. It appears to have occurred in bank balance sheet activity, and related official sector UST transactions.
Fighting Over The Exact Wrong Things
The most recent anti-“reflation” trend dates back to March 15, which is a date that holds no political significance. It is, instead, related to far more concerning monetary shifts, though not related to the Federal Reserve and monetary policy, either
The Noose Only Tightens
China’s SAFE reported a large increase in official reserve holdings. The biggest “inflows” in several years has led to much optimistic commentary suggesting if not outright stating that the currency problems are no more.
More Less Than Nothing, Labor Conditions
As the CPI had moved higher on the base effects of oil prices, real earnings were forced negative in each of the three prior months. The reason is, as always, no acceleration in nominal wages or earnings. None.
Good Month For Industrial Production, But Serious Questions Remain
Industrial Production rose sharply in April 2017, up nearly 1% month-over-month (seasonally-adjusted). It was the largest single month increase since February 2014 during the depths of the Polar Vortex.
Less Than Nothing
Growing social problems are very real and remain totally unchecked, as is the global economic depression that has provoked them. You can appreciate why it has been this way heading into a second decade.
Staying Stuck
In the particular case of 2016-17 and “reflation”, the more immediate circumstances surrounding commodities have taken on increased importance. Oil, in particular, has become the chief expression of economic direction.
Trying To Reconcile Accounts; China
Having entertained “reflation” now and increasingly finding it hollow and unsubstantial, where does that leave China, the global economy, and the “dollar”?
Inflation Is Oil, But Inflation Is Much More Than Consumer Prices
Since the US CPI is dependent on oil prices, just as other inflation measures all over the world are, that means next month is in all likelihood back below 2% again.
Reasonable Retail (Therefore Consumer) Expectations
Retail sales growth of 5% on average would still be contraction given these circumstances, so retail sales growth of 3% is indicative of all the same persistent problems.
It Really Is 2014
It’s not 2016 anymore, therefore “too risky” can only be just as relative. There is nothing people cannot convince themselves of when nudged toward those preconceptions, no matter how much they don’t actually make sense. Welcome back 2014.
Hopefully Not Another Three Years
It is something that we have to keep in mind when evaluating the economic circumstances where such things used to be trivial and unremarkable; if only trivial because revisions were once always unremarkable.
More And More An Inventory Story
Wholesale sales were up 8.3% in March 2017 unadjusted year-over-year. Like other accounts, however, the seasonally adjusted series was not impressed.
Liquidity Trap, Alright, But One With None
It’s not a liquidity trap in the conventional sense, rather it is one where there is none.
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