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Tag Archives: inflation

CPI, Empire State Survey, Philly Fed, Brent Crude Price, Previous Banking Post

CPI, Empire State Survey, Philly Fed, Brent Crude Price, Previous Banking Post Consumer Price IndexEmpire State Mfg Survey HighlightsMinus signs sweep the Empire State report with the headline at minus 11.36 which is more than 1 point below Econoday’s low end estimate. Looking at individual readings, new orders are in very deep trouble at minus 18.92 for a fifth straight month of contraction. And manufacturers in the region are not going to be able to turn to unfilled orders to keep busy...

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German Trade, Japan

Exports down but so are imports, indicating a weak global economy and continued euro support from trade net flows: Germany : Merchandise Trade German exports plunge at fastest pace since global financial crisis Oct 8 (Reuters) — German exports plunged in August. Data from the Federal Statistics Office showed seasonally-adjusted exports sliding by 5.2 percent to 97.7 billion euros month-on-month, the steepest drop since January 2009. Imports tumbled by 3.1 percent to 78.2 billion...

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Jensen: How long bonds could actually outperform equities

In-depth analysis on Credit Writedowns Pro. Editor’s note: This was originally published by Absolute Return Partners in late August. So we are a little late in releasing it. Apologies. It is still good reading. The Absolute Return Letter, August/September 2015: Doodles from an eventful summer “There is something deeply troubling when the unthinkable threatens to become routine.” Bank for International Settlements Incidents of the summer 2015 This month’s Absolute Return Letter is a...

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Clarida on Fed policy: or how does the Fed affect inflation

Richard Clarida gave an interview (right at the beginning of the podcast) on why the Fed should increase the rate of interest. He also said that the Fed can affect inflation, which, he correctly points out, is denied by several economists. However, the degree of confusion on this subject is significant, and modern monetary theory, and its implications for central banking behavior, is, in part, responsible for that.The conventional wisdom on what central banks can do (and one can think of...

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The Great Yield Divergence

When a former Bank of England deputy governor gives a presentation entitled "Are Low Interest Rates Natural?" to a extraordinarily high-powered audience of academics and monetary policymakers, you can bet he will come up with some great charts. Charlie Bean's historical analysis of long-term real and nominal yields in the UK is amazing: It is very evident that for most of the last 200 years, nominal and real consol yields have been pretty much pinned together. Charlie said that the gold...

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PQE, inflation and the problem of voter power

I have repeatedly said that I do not support Jeremy Corbyn's "People's QE". But there seems to be considerable confusion about what exactly I oppose. And that is for one simple reason: the deliberate conflation of government investment spending and QE by the architect of this scheme. PQE is composed of two separate and distinct strands: 1. Government spending to finance investment in infrastructure, innovation, R&D and housing 2. Bank of England purchases of government bonds. ...

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Who would win and who would lose from Grexit?

Guest post by Tom StreithorstVladimir Illych Lenin may well be the most destructive political theorist of the 20th century.  His glorification of a conspiratorial party as agent of a glorious future legitimised mass murder from Bolshevik Russia to Nazi Germany to Cambodia's Khmer Rouge.  Nonetheless, he did invent an analytical tool political scientists and economists should use more often: “Kto Kovo”, or “who beats whom”.  In examining any policy, Lenin suggests the first...

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The two phases of CHF appreciation

We show the two phases or "two innings" of Swiss franc appreciation: The risk aversion game and the inflation game. With the weakening of emerging markets and the strengthening of the United States in 2013/2014, the Swiss National Bank (SNB) had won the first battle in the war against financial market, the "risk aversion game", the first inning in two-part match. Risk aversion is lower because the United States recovered with weaker oil prices. The "inflation game" started earlier than we...

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The Subtle Tyranny of Interest Rates

Interest rates are the price of credit. They are the price of access to capital. Now, it is obvious that pricing credit is not tyrannical in and of itself. Interest compensates a lender for default risk and the risk of inflation eroding the purchasing power of the money that they lend. The tyranny I am getting at is subtle. It is the tyranny that Keynes pointed to when he proposed a euthanasia of the rentier. Keynes proposed that low interest rates would: mean the euthanasia of the rentier,...

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