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Recessions are a process and what past episodes all have in common is one key ingredient. Rather, one element that comes up missing every time. This critical factor doesn't just end up being the difference between downturn and full-blown contraction, it also turns a recession into a depression. And we've got the data for it plus how 2024 fits into the pattern. Eurodollar University's Money & Macro Analysis Robert Shimer Reassessing the Ins and Outs of Unemployment https://home.uchicago.edu/s...
The Christmas shopping season is off to a poor start, with dim results coming in from various sources showing lower traffic and slower spending. The reason is easy enough to identify, starting with the latest labor report from the government. Hiring fell sharply before summer and never came back, all of that leading up to the holidays. Eurodollar University's Money & Macro Analysis WEBINAR DEC 11 w/Jim Rickards Sign up: https://event.webinarjam.com/register/26/x671piml Bloomberg Tally of US ...
After a weekend of disappointing macro data (which was characterized as "mixed"), China's markets tanked. Not stocks, of course, instead more record lows in bonds plus a very sharp drop in CNY. As we know only too well, CNY DOWN = BAD and yuan is right back near multi-year lows. It's not the only one, either. Eurodollar University's Money & Macro Analysis WEBINAR DEC 11 w/Jim Rickards Sign up: https://event.webinarjam.com/register/26/x671piml Bloomberg China’s Factory Activity Expands in Sig...
European banks have added a massive amount of government bonds to their holdings. At the same time, they refuse to lend into the real economy. Europe's depositories are hardly alone as we see the same defensive behavior all over the global system. There is only one reason why they all have become so incredibly defensive. Eurodollar University's conversation w/Steve Van Metre WEBINAR DEC 11 w/Jim Rickards Sign up: https://event.webinarjam.com/register/26/x671piml Black Friday/Cyber Monday Sale at...
India's RBI just recently has gone *massively* short the US dollar and in the NDF market, too, just to keep the crumbling rupee from sinking even more. This won't work exposing the central bank to losses and also potentially amplifying the downdraft in the currency. A big update on the fundamentals explains. Eurodollar University's Money & Macro Analysis Bloomberg India Plows Into NDF Market as It Fights Back Against Dollar https://www.bloomberg.com/news/articles/2024-11-29/india-plows-into-...
An entire batch of corporate reports from retailers to computer-makers, just in time for the key holiday season's critical moment. Each one warning that consumers in the US just aren't there, being held back. Why? The government also reported today with the answer to that question, the one factor that ties it all together. Eurodollar University's Money & Macro Analysis Bloomberg Inflation-Battered Consumers Are Going to Extreme Lengths to Nab Holiday Deals https://www.bloomberg.com/news/arti...
Japan's yen has diverged from other currencies over the past few weeks, strengthening against the dollar. That suggests more carry trading dynamics, an interplay between different versions of them. Yes, there is more than one carry trade and understanding the distinctions is key to getting a sense of possible vulnerabilities here. Eurodollar University's Money & Macro Analysis WEBINAR DEC 11 w/Jim Rickards Sign up: https://event.webinarjam.com/register/26/x671piml Reuters Explainer: What are...
Several critical financial measures continue to drop, reaching rather obscene comparisons. At first, that doesn't seem to make any sense; how would today be seen as similar to February 2009, for example. However difficult the economy is now, it certainly isn't that bad. What these measures are indicating go beyond specific moments, instead providing clues about a progression. Eurodollar University's Money & Macro Analysis WEBINAR DEC 11 w/Jim Rickards Sign up: https://event.webinarjam.com/re...
Is the bond selloff over? What caused it in the first place? With European rates, in particular, heading lower on recession (more than) risks, the tendency of Treasuries to converge with them raises the chances yields may not have much farther to go if they aren't topped out already. Given the fundamental background, it appears to be a matter of time more than anything. Eurodollar University's conversation w/Steve Van Metre https://www.eurodollar.university Twitter: https://twitter.com/JeffSnide...
The European situation is getting to be truly serious. And that means growing problems for...the dollar. Not the exchange value against other currencies, rather why that exchange value is rising and how trouble in Europe means trouble in global money. European banks have been back in a big way at the black hole's center. Eurodollar University's Money & Macro Analysis President Ford Economic Report to Congress 1975 https://www.presidency.ucsb.edu/sites/default/files/books/presidential-documen...
China and Japan selling record amounts of Treasuries. Do they hate the dollar? Donald Trump? You and me? Not only will we answer the questions, while those countries saw huge selling of USTs, curiously the Cayman Islands got a truly massive deposit of them and it showed up during July, August and September. Seems very carry trade-y. Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU
A double whammy on US consumers. First, the government issued an alarming update to the biggest jobs data there is. Then retail giant Target stunned with its Q3 results and more so its guidance for Q4. The thing is, both of those are related; two sides of the macro coin. The one says the summer started really badly, the other it didn't get better. Eurodollar University's Money & Macro Analysis Reuters Target raises 2024 profit forecast as price cuts draw shoppers https://www.reuters.com/busi...
Warren Buffett continues to sell tens of billions worth of stocks. Everyone wants to know why. This divergence between major stock index most likely holds the answer. Normally stock indexes don't mean much beyond their beauty, yet they can be important signals at times like now when they do diverge in such an obvious and sustained way. This is a key cyclical one, too. Eurodollar University's Money & Macro Analysis CNBC Berkshire Hathaway’s cash fortress tops $300 billion as Buffett sells mor...
The Federal Reserve reported a sharp rise in delinquencies, especially credit cards and auto loans. That wasn't all, as the New York branches also showed record high rejections strongly indicating where things really stand in the credit cycle. As a result, we have to pay some attention to CRTs, otherwise known as SRTs, the latest financial engineering akin to the 2020s version of credit default swaps. Eurodollar University's Money & Macro Analysis FRBNY Household Debt and Credit Report Q3 20...
Another retailer finds out the 2021 "recovery" was mostly an illusion. Prices may have soared and revenues looking good, it didn't last because it couldn't. As the company closes hundreds of stores and prepares to lay off an unknown number of workers, more stats show this is no isolated case. The cycle continues and continues to take its toll on businesses and workers alike. Eurodollar University's conversation w/Steve Van Metre
The yen and the euro are good currency indicators of global monetary conditions, but there are a couple even better and more consistent signals. When the 'dollar' goes up and these two are taking the hit because of it, that's when you really need to pay attention. It's not Trump, Jay Powell, interest rates or just random chance. Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU
The dollar index jumped to a more than two-year high leaving everyone to ask why. Some say Trump, others the Fed. They might as well have said it was Burger King (who blames Wendy's). Though the dollar is rising here in the short run, to really understand what's going on you have to consider more than just developments in November 2024. This has been in the works for several years. Eurodollar University's Money & Macro Analysis Reuters US dollar continues uptrend as Fed policy provides lift ...
After Germany's governing coalition collapsed last week, the country's ZEW added more solid evidence about why that was. The ZEW also collapsed into November. That's not just about Germany since the "zoo" is really what the rest of the world looks like from the German perspective. That also has a lot to say about the ongoing Treasury selloff (just like April). Eurodollar University's Money & Macro Analysis ZEW November 2024 https://www.zew.de/en/press/latest-press-releases/falling-economic-e...
The economic challenges the incoming Trump administration is facing are far and away greater than those confronted in 2016. From the cyclical standpoint, 2024 has far more in common with 2001. While structurally, there's nothing close to this in generations. Amidst the election euphoria there needs to be sober analysis. Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU
Repo fails jumped by 50% in the latest weekly data, which just so happens to be the same week swap spreads plunged to record lows. It was also when the US economy, at least its labor data, took a turn for the worse. Understanding the connections between all these money and macro indications is critical. Eurodollar University's Money & Macro Analysis Financial Times New York Fed examines banks’ role in money market turmoil https://www.ft.com/content/83a5bb70-dbca-11e9-8f9b-77216ebe1f17 FOMC C...
Credit card usage isn't really about spending. Americans use their credit cards when they're confident about jobs and incomes. The latest data from the Fed contains a more serious warning especially how it lines up with jobs and income data...and the Fed's actions. Eurodollar University's conversation w/Steve Van Metre https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU
Is there era of massive government "stimulus" finally over? Bonds are certain it is. The Chinese are doing their best to make sure that's the result, in large part because they don't know what to do. That much is becoming clear and the implications are already going global. Just ask anyone with oil. Eurodollar University's Money & Macro Analysis Bloomberg China Unveils $1.4 Trillion Debt Swap, Saves Stimulus for Trump https://www.bloomberg.com/news/articles/2024-11-08/china-unveils-839-billi...
Germany's government is the latest casualty of the "vibecession." Amid a flurry of political activity, the markets throw up another major warning with the first ever negative swap spread. Predictably, the mainstream media can't make sense of swaps, the situation, or the economics. It's the economy, stupid. Eurodollar University's Money & Macro Analysis Bloomberg Germany’s Government Puts Itself Out of Its Misery https://www.bloomberg.com/opinion/articles/2024-11-07/germany-s-coalition-govern...
Huge moves, major negatives, and record declines for one of the most critical pieces of the entire global system. While election euphoria has gripped certain financial markets, this one is doing the opposite. It is a key warning about where everything stands before even considering whether or not Trump's victory changes anything. Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU
Demand for gasoil, the basic fuel which runs the entire modern world, is actually declining. Having stumbled over the summer, this exceptionally rare development is another really negative sign to go with, relatedly, even more production and job cuts across the auto industry. Energy, autos, economy. Eurodollar University's Money & Macro Analysis Bloomberg Diesel Set For Growing Glut as Demand Falters https://www.bloomberg.com/news/articles/2024-11-05/diesel-set-for-growing-glut-as-demand-fal...
Why are interest rates rising at one end of the yield at the same time falling on the opposite side? With more recession data coming in all the time, starting with payrolls, it seems as though there should be a uniform response from the marketplace. But that's not how steepening works. Eurodollar University's Money & Macro Analysis Washington Post House Passes Bush Tax Cut https://www.washingtonpost.com/archive/politics/2001/03/09/house-passes-bush-tax-cut/99152799-f156-414f-82c4-bed4fca05bb...
October payrolls were exceptionally weak, yet LT rates jump? With more rate cuts from the Fed basically assured, questions swirl around the Treasury selloff having many people wondering if there is a 'Trump trade' going on here. The answers are right there in front of us. Eurodollar University's conversation w/Steve Van Metre https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU
This isn't about October or hurricanes. Government just confirmed jobs market is in big f-ing trouble. Eurodollar University's Money & Macro Analysis BLS Employment Situation October 2024 https://www.bls.gov/news.release/archives/empsit_11012024.pdf CNN Messy October jobs report muddied by strikes and storms ahead of Election Day https://www.cnn.com/business/live-news/us-jobs-report-october-11-01-24/index.html https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU...
The government's latest data confirms the dramatic slowdown sweeping across the labor market. We've been documenting hours being cut, quitters quitting quits, no one hiring, and now even a few layoffs. Not only do the latest figures back all that up, they also help explain consumer behavior and even the last GDP estimate. Eurodollar University's Money & Macro Analysis CNBC Ford guides to low end of 2024 earnings forecast as it slightly tops Wall Street’s third-quarter expectations https://ww...
