Squawk Box: Oil and more

Ahead of my remote appearance on CNBC Squawk Box Europe on April 3rd, I prepared a few notes for the guys which I am happy to share here with you. The main topic, ahead of the emergency OPEC meeting which briefly bolstered crude prices that week was, unsurprisingly, oil but we did also discuss the outlook for the wider economy.

To access this post, you must purchase Annual Subscription or Monthly Subscription.

Whatever it doesn’t take

On March 15th, the Eurozone branch of the Throw-more-money-at-it lobby were making themselves heard, calling for the ECB to run the printing presses for a limited (author pulls down lower eyelid with index finger) period as a supplement to the to the €120 billion in extra security purchases already made to that point. [NB total ‘assistance’ to April 17th had reached to €275bln in RP, €148bln in securities, and €126bln in FX swaps for a total of €550bln in five short weeks].We responded:-

To access this post, you must purchase Annual Subscription or Monthly Subscription.

Turning Japanese

A noted [monetary extremist] resident at GMU’s Mercatus Center fretted on March 20th that Japan’s efforts during 2001-06 to have the central bank finance deficits ‘didn’t work’ – i.e., they failed to ignite meaningful levels of wealth-sapping inflation. The reason? As our sage tells us, was that there was ‘no commitment… to a permanent expansion of the monetary base’ as expounded in the ratiocinations of that dark genius of modern central bank theorising, Michael Woodford. We replied:-

To access this post, you must purchase Annual Subscription or Monthly Subscription.

Throw me a Lifebelt!

As governments took ever more drastic action to close markets and confine people to their homes, the question loomed of how to mitigate some of the worst consequences of this self-imposed state of siege. A Twitter thread of March 10th offered up some initial thoughts, here lightly edited.

To access this post, you must purchase Annual Subscription or Monthly Subscription.

What IS a ‘Market’?

In response to an FT article of January 23rd entitled, “The new kings of the bond market”, which suggested that banks had ceded their command over fixed income to exchange-traded funds and active portfolio traders, we responded with a riff on the sorry consequences of recent financial developments: a bromide which turned out to be singularly well-timed in view of the extraordinary upheavals suffered just a few, short weeks later:-

To access this post, you must purchase Annual Subscription or Monthly Subscription.

How Essential is ‘Essential’?

In the drive to prevent (viral) death by means of mass (economic) suicide, our Overlords have begun to order the cessation of activities in all ‘non-essential’ businesses.

While one can sympathise with the sentiment, it is, sadly, yet another example of the ignorant doing harm by trying to do good, since it shows absolutely no understanding of the complexity of the modern economy or of the elevated degree of interdependency which exists within it.

To access this post, you must purchase Annual Subscription or Monthly Subscription.

Overstretch

Markets have paradoxically both been on edge – and in the throes of euphoria – since the repo shock in mid-September, being at the same time alarmed and yet strangely reassured by the Fed’s frantic backpedalling and the $400+ billion boost to its balance sheet which this entailed. Extreme levels of overstretch are everywhere apparent.

To access this post, you must purchase Annual Subscription or Monthly Subscription.

CHART PACK: Cracked China

In line with the trends – both real and monetary – whose development we have long been documenting, China’s economic situation continues its sharp deterioration. Much of this is principally domestic in origin even if patently being aggravated by President Trump’s ‘Trade War’ – something which is actually providing a not entirely unhelpful, political fig-leaf for the regime. Here, we present a short, but concentrated overview of the nation’s woes. [CLICK FOR PDF: 19-08-19 Cracked China]

To access this post, you must purchase Annual Subscription or Monthly Subscription.

CHART PACK: Why the Fed will cut – and why it shouldn’t

Charts prepared just ahead of the June FOMC, then a detailed synopsis of the economic and financial conditions informing the July decision, prepared for TV appearances on CNBC Europe’s Squawk Box and IG-TV’s Jeremy Naylor show  [CLICK HERE FOR PDF: 19-08-20 FOMC June & July]

To access this post, you must purchase Annual Subscription or Monthly Subscription.

PODCAST “Beguiled by their Own Augury”

When Fed Chairman Jay Powell cleared his throat to speak at the Council for Foreign Relations late in June, the air was one of rapt attention, fully in keeping with that remarkable feature of the Modern Age, the heed we pay to the pronouncements of men such as he.

To access this post, you must purchase Annual Subscription or Monthly Subscription.