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Euro Area Recovery Monitor - 2017-12-13

Wed, 13 Dec 2017 21:56:13 +0000

Date: 
Thursday, December 14, 2017



Jones' win adds urgency to GOP tax push

Wed, 13 Dec 2017 15:11:19 +0000

Donald Luskin, chief investment officer for Trend Macrolytics, said that Republican Roy Moore’s loss in Alabama will be a big incentive for Republican leaders to “drive the negotiations to a conclusion.”

“It makes more urgent the need for the GOP to exploit its 2018 electoral map advantage in the Senate — tax cuts are the perfect trophy to bring the voters, now without the stench of Moore’s sexual misconduct scandals," he wrote in an analysis for investors Tuesday night.

Date: 
Wednesday, December 13, 2017
Source: 
Politico



On the Alabama Special Election, and Tax Cuts

Wed, 13 Dec 2017 04:19:22 +0000

http://www.trendmacro.com/system/files/reports/20171212TrendMacroLuskin-40.pdf
Donald L. Luskin
Tuesday, December 12, 2017
The GOP loss creates the deadline that this endless negotiation always needed.
Strategic view: 

Moore’s loss is not a threat to tax cuts, because the Democratic winner will not be seated until early January. That creates a year-end deadline that will force the compromises that will drive the negotiations to a conclusion. It makes more urgent the need for the GOP to exploit its 2018 electoral map advantage in the Senate – tax cuts are the perfect trophy to bring the voters, now without the stench of Moore’s sexual misconduct scandals.

Market(s): 



On the December FOMC: Good Job, Chair Yellen

Tue, 12 Dec 2017 15:49:32 +0000

http://www.trendmacro.com/system/files/reports/20171213TrendMacroLuskin-60.pdf
Donald L. Luskin
Wednesday, December 13, 2017
So we were wrong about her: the super-dove who hiked five times and ended QE.
Strategic view: 

We were wrong about Yellen. She showed the flexibility to assume the Fed chair as a dove, but preside over the end of QE, lift-off from ZIRP and normalization of the balance sheet. Lift-off was terribly timed, but she quickly corrected her mistake and, with Fischer, turned the Fed away from the Phillips Curve and toward Wicksell’s model of the natural rate of interest. This is Powell’s policy inheritance, and it means rate hikes will be indexed to improvement in the real economy, and thus not tightenings. Today’s statement. Today Yellen explicitly affirmed this policy framework in her last press conference, noting that the funds rate is now close to r-star, and predicating further hikes on r-star’s expected ongoing recovery. The SEP both lowered expected unemployment rates and expected inflation. The Phillips Curve appears to be dead.




Federal Reserve - 2017-12-12

Tue, 12 Dec 2017 15:48:17 +0000

Date: 
Wednesday, December 13, 2017



US Unconventional CPI - 2017-12-12

Tue, 12 Dec 2017 15:47:45 +0000

Date: 
Wednesday, December 13, 2017



US CPI/PPI - 2017-12-12

Tue, 12 Dec 2017 15:47:22 +0000

Date: 
Wednesday, December 13, 2017



Global Equity Risk Premia - 2017-12-11

Tue, 12 Dec 2017 01:43:22 +0000

Date: 
Tuesday, December 12, 2017



On the November Jobs Report

Thu, 07 Dec 2017 21:59:38 +0000

http://www.trendmacro.com/system/files/reports/20171208TrendMacroLuskin-G0.pdf
Donald L. Luskin
Friday, December 8, 2017
Small business optimism drives a big payroll beat. We’re still 2.7 million from full employment.
Strategic view: 

A beat for payrolls, driven by the break-out in small business optimism to new all-time highs. Hours-worked sharply increased, driving growth in weekly earnings – but there was little growth in hourly earnings, so the Fed has no reason to normalize policy any faster. Jobs growth continues strong despite dwindling unemployment because as many as 1.6 million workers could join the labor force. Jobs would have to grow by 2.7 million to hit full employment




US Jobs - 2017-12-07

Thu, 07 Dec 2017 21:58:50 +0000

Date: 
Friday, December 8, 2017