• Tiananmen Tragedy

    30 years ago today the Chinese government murdered hundreds, if not thousands, of student protestors across China, but particularly in Tiananmen Square, agitating for nothing more than freedom and democracy. In China, this event has been completely expunged. The Tiananmen Massacre was when the … [Read More...]

  • Troubling Tariffs

    Existing tariffs on Chinese imports and Chinese retaliatory tariffs reduce US GDP by 0.15 of a point. Last week’s tariff increase from 10% to 25% on $200 billion of Chinese goods will decrease GDP by another 0.15. A further 25% tariff on another $325 billion of Chinese imports would lower GDP by … [Read More...]

  • Goldilocks Gains

    There were 263,000 new jobs created in April, with all sectors but retail gaining. This strong growth is more proof of a solid economic rebound after a tough start to 2019. While pay rose 3.2% Y-o-Y, wage increases have been steady at 3.2% since 8/18, dampening inflation fears despite unemployment … [Read More...]

  • Data Drama

    During the brief economic downturn late last year, bond yields fell along with equities because there was fear the economy was slowing, corporate profits were weakening, and inflation was expected to fade. Now, the stock market is at a record high while bond yields remain very low. This divergence … [Read More...]

  • Growing GDP

    GDP 19Q1 GDP came in at a remarkably strong 3.2%; don’t be deceived. Growth was pushed up by an unsustainable surge in inventories, a huge one-time jump in state and local government spending, and a drop in imports precipitated by a rise in 18Q4 imports in advance of Chinese tariffs that never … [Read More...]


Excellent Employment

In April, the latest month for which data are available, there were 7.449 million unfilled jobs, a number that has been steady for a year. Meanwhile, the number of unemployed Americans was 5.824 million, the lowest level since 12/2000. For the 14th month in a row, there were more job openings than … [Read more...]


Shanghai Slowdown

May Chinese industrial production rose 5% Y-o-Y, weakest since 1992, and fixed asset investment growth of 5.6% is near multi-decade lows. Moreover, not only is public-sector fixed-asset investment above private sector fixed-asset investment for the first time in 15 months, but it’s rising quickly. … [Read more...]


Fantastic Fathers

The Friday File: The 76% of the US population that plans to celebrate Father’s Day will spend a record $16 billion on dads this year, up from $15.3 billion last year. Average planned spending/person is expected to be $139, also a record. Interestingly, men spend more than women for both Mother’s Day … [Read more...]


Manufacturing Moderation

Global manufacturing sentiment fell to 49.8 in May from 50.4 in April. Not only was this the 13th straight monthly decline in the index and the weakest reading since late 2012, but readings below 50 suggest declining activity! Closer to home, the US manufacturing sentiment index fell to 52.1 in May, … [Read more...]


Crummy Cards

Credit card delinquency rates hit 8.1% in 19Q1, the highest rate in years. While rates are rising slowly for card holders over 30, rates are up sharply for those 18-29. Highest interest rates in decades are partly to blame, but the Card Act of 2009 caused a steep decline in accounts among those … [Read more...]


Downturn Data

Among many, there is a belief that economic expansions behave like people. That is, the longer an economic recovery, the greater is the probability of a recession. This is based on the fact that older persons are, all else equal, more likely to die than younger persons. Except expansions don’t … [Read more...]


Tolerable Travails

With 75,000 net new jobs in May, and downward revisions totaling 75,000 for March and April, job growth is demonstrably slowing.  Additionally, Y-o-Y wage growth fell to 3.1%. This makes a July rate cut very possible. However, the unemployment rate remained at 3.6% and the broadest measure of … [Read more...]


Many Monarchs

The Friday File: There are 29 monarchs and 44 sovereign nations with a monarch as head of state. Queen Elizabeth II, who acceded to the throne in 1952 is the longest serving monarch; 67 years. In addition to the UK, she is head of state of 16 other nations. All other monarchs are head of state of … [Read more...]


Bargain Banks

The widening tariff wars are a double whammy for banks. First, falling interest rates are squeezing the gap between what banks charge borrowers and what they pay depositors, known as net interest margin, which necessarily discourages lending. Moreover, as firms and households get nervous, they … [Read more...]


Inversion Implications

Since 1/1/1978, there have been five inversions between 3-month and ten-year Treasuries. Each inversion lasted months, moreover each recession began, on average, 627 days after the initial inversion. The shortest gap: 293 days, the longest, 1,073 days. Assuming the current inversion that began on … [Read more...]