Mosler Economics

Seems there’s no wisdom on the topic of ‘money’ anywhere of consequence: No ‘plan B’ for ECB despite still low inflation: Praet Jan 6 (Reuters) — Executive Board member Peter Praet said various factors, notably low oil prices and less buoyant emerging economies, meant it was taking longer to reach the goal of inflation of close to but below 2 percent. “We need to be attentive that this shifting horizon does not damage the credibility of the ECB,” he added. “There is no plan B, there is just...

Saudi discounts for February. Some reduced, some increased, so probably more same- prices fall until Saudi output hits its capacity:Zig zagging a lot recently, now back down to where they’ve been for a while: MBA Mortgage ApplicationsHighlightsMortgage application activity fell sharply in the two weeks ended January 1, down 15 percent for home purchases and down 37 percent for refinancing. Rates were steady in the period with the average 30-year mortgage for conforming balances ($417,000 or...

This does nothing apart from supporting their policy rate: Port Traffic Grew at Slowest Rate Since Recession in 2015 Container traffic rose only 0.8% last year at the 30 busiest ports worldwide, the smallest increase since 2009, according to an estimate by AlphalinerBy Robbie WhelanJan 4 (WSJ) — Container traffic at the world’s busiest ports grew last year at its slowest rate since the recession, according to an estimate by Alphaliner, a shipping industry data provider.Demand was held back...

Down to only .7% for Q4 GDP forecast. JPM went down to 1% today as well. It’s a bit below the DC Fed’s 3%+ forecasts earlier in the year, when the lower price of oil was presumed to be an unambiguous positive for growth, further supported by the massive monetary stimulus of near 0 rates and trillions of QE. And a bit below their latest, similar forecasts of a couple of weeks ago when they judged the economy ‘solid’ and raised rates.

Bad: PMI Manufacturing IndexHighlightsThe manufacturing PMI has been consistently running warmer than other manufacturing surveys which helps put into context the disappointment of December’s slowing to 51.2, down from 52.8 in November. The final reading for December is 1 tenth lower than the mid-month flash. Near stagnation in new orders is a key negative in the report, one that points to further slowing for the headline index in coming readings. Orders are still growing but at their...

The Saudis post prices and let their clients buy all they want at the posted prices. So their policy has been to discount the price of their oil vs benchmarks until their sales increase to meet their production capacity, which is reportedly 12 million bpd. That means the price goes low enough to cause other suppliers to cut back, such as US shale producers, which translates into higher Saudi sales and output. Or demand has to increase. Seems they haven’t made much progress so far, as the...

Way below consensus and way bad: Chicago PMIThe Chicago Business Barometer contracted at the fastest pace since July 2009, falling 5.8 points to 42.9 in December from 48.7 in NovemberThere was also ongoing weakness in New Orders, which contracted at a faster pace, to the lowest level since May 2009. The fall in Production was more moderate but still put it back into contraction for the sixth time this year. The Employment component, which had recovered in recent months, dropped back below...

Another bad one: Pending Home Sales IndexHighlightsPending home sales in November declined for the third time in four months as buyers continue to battle both rising home prices and limited homes available for sale. The pending home sales index was down 0.9 percent but up 2.7 percent from a year ago. Modest gains in the Midwest and South were offset by larger declines in the Northeast and West.November’s dip continued the modestly slowing trend seen ever since pending sales peaked to an...

Not good for Q4 GDP. Remember, lower oil prices were supposed to reduce our trade deficit…;) International Trade in GoodsHighlightsNovember’s international trade goods deficit narrowed to $60.5 billion from the revised $63.0 billion in October. October’s estimate previously was minus $58.4 billion. Expectations were for a deficit of $60.9 billion. Both exports and imports continued to decline on the month. Goods exports were down 2.0 percent while imports were 1.8 percent lower. Weak...

From bad to worse: Dallas Fed Mfg SurveyHighlightsTexas factory activity increased for a third month in a row in December. The production index, a key measure of state manufacturing conditions, rose from 5.2 to 13.4, indicating stronger growth in output. Some other indexes of current manufacturing activity also reflected growth in December, but the survey’s demand measures showed continued weakness.New orders, an indicator of incoming demand, declined at a faster pace. The index has been...