Tag Archives: United States

By Marc Chandler Originally published on Marc to Market There is a general understanding of what happened last week. The 2.9% rise in average hourly earnings in the US reported, the fastest since 2009 spurred fears of rising inflation. The jump in US interest rates triggered equity sales and a spike in volatility, which in turn spurred the unwinding of low vol bets that had been paying off handsomely. While this consensus narrative has much to recommend itself, there is a...

By Marc Chandler Originally posted at Marc to Market The short-term solution reached last month to extend the US federal government’s funding expires on Thursday, February 8. Leaders from both parties say they want to avoid another partial closure. Last month, parts of the federal government were closed for three days, which is about par for the course (around half of the government’s 19 shutdowns since 1977 lasted three days). The House of Representatives is planning to vote tomorrow on a...

By Marc Chandler (This post first appeared at Marc to Market) ECB President Draghi was unable to arrest the US dollar’s slide and euro’s surge.  But he did not try particularly hard.  While many investors are a bit stumped by the pace and magnitude of the dollar’s slump, Draghi seemed to imply that it was perfectly understandable given the recovery of the eurozone economy.  The economy is the strongest it has been in more than a decade, but the US is no slouch.  The US reports the first...

By Marc Chandler (this post originally appeared at Marc to Market) Did US Treasury Secretary Mnuchin signal a change in the US dollar policy?  Probably not. As Mnuchin and President Trump have done before, a distinction was drawn between short- and longer-term perspectives.  In the short-term, a weaker dollar says Mnuchin, is good for US trade and “other opportunities”.  In the longer-term, Mnuchin explicitly acknowledged, “the strength of the dollar is a reflection of the strength of...

By Marc Chandler (originally published at Marc to Market) The US Treasury International Capital report for the month of November 2017 was released yesterday.  It showed that the two largest foreign holders of US Treasuries, China and Japan, were net sellers.  China sold about $12.6 bln and Japan sold about $9 bln of US Treasuries.  Foreign investors sold $6.4 bln of Treasuries, meaning that...

By Marc Chandler (originally posted at Marc to Market) The investment climate is being shaped by two powerful forces.  First is the very accommodative policy stance. This includes the United States, where despite delivering the fifth rate hike in the cycle, adjusted by headline CPI, remains negative. As the balance sheet has begun being reduced, financial conditions in the US are easier now...

In-depth analysis on Credit Writedowns Pro. You are here: Weekly » The titillating and terrifying collapse of the dollar. Again. This post was originally published at China Financial Markets. By Michael Pettis Foreign perceptions about the Chinese economy are far more volatile than the economy itself, and are spread across a fantastic array of forecasts. On one extreme there are still many who hold the view that overwhelmingly dominated the consensus just four...

By David FieldsBetween roughly the early 1940’s and early 1970’s, the financial architecture of the world economy centered on a US engineered Keynesian accumulation agenda, as a response to the devastation wrought by the Great Depression. The capitalist institutional structure, or social structure of accumulation (Kotz, McDonough, and Reich, 1994), rested on finance being subservient to the promotion of  industrial enterprise. With socially-engineered capital-labor compromises in...

From Papadimitriou, Nikiforos, and Zezza's new Levy Strategic Analysis: "over the last 25 years policymakers in Washington have become increasingly fiscally conservative. The current recovery is the only one in the postwar period during which government expenditure has decreased in real terms. Fiscal austerity, together with weak foreign demand, has put the entire burden of supporting aggregate demand on the private sector spending in excess of its income and borrowing. This has led to a...

By Alberto Caruso, Thomas Hasenzagl, Filippo Pellegrino, Lucrezia Reichlin This post first appeared at Vox. Recent data releases related to the Eurozone have been disappointing. This column argues that momentum from the long-delayed 2014-15 recovery is faltering because the Eurozone economy is affected, with a lag, by the US slowdown. The traditional, lagged relationship between the EZ and US business cycles – which disappeared in the aftermath of the Global Crisis – is now reasserting...