Philly Fed survey shows collapse in activity

This is in line with the weak data we have seen out of the US in recent weeks. I expect Q2 growth estimates to continue to decline as the data come in

Further Chinese Yield Curve Flattening to 17bps

The last time the curve was this flat was during the panic in 2008. So I am still concerned that the potential for a more abrupt slowing exists. So far growth remains robust

Zulauf: 20% downside risk from the market’s intraday May high

Point for point, I agree with the commentary from Felix Zulauf in this week’s Barron’s mid-year roundtable discussion. For long-time Credit Writedowns readers, you will recognize almost every one of these points from previous posts. It is nice to see it all distilled so cogently in one place. This is a must-read. Subscribe if you must. Much more at the link below

China: First the credit writedowns, but then what?

The immediate problem is the excess capital investment and the costly maintenance of the projects it has spawned. Longer-term, Asia’s growth prospects look good

Financial Repression

The financial repression that is being discussed is not in developing countries but in the advanced industrialized countries. The ostensible goal is to support the government bond markets. Moral suasion, the cajoling of investors are soft forms of financial repression, where the government can impose such cooperation by fiat

US Economic Growth Still Weak

Although the overall reported headline rate for the GDP remained essentially unchanged, the numbers reflected somewhat weaker consumer contributions and anemic “real final sales”

Hoenig: A Dissident Voice Falls Silent

“I don’t want to see unemployment this high,” Thomas Hoenig says. “But I also don’t want to see it this high three or four years from now following another crisis because we were so impatient. That’s a very hard trade-off and it’s very difficult to explain, but it’s what we need to do.” The Dissident’s voice is usually ignored.

Now it will be silenced. We don’t yet know who will replace Thomas Hoenig, but there’s probably a better than even chance it’ll be someone who toes the party line rather than persistently challenges it

How to think about Consumer Price Inflation

The Bureau of Labor Statistics’ Consumer Price Index (CPI) is probably the target of more anger than any government dataset. And certainly, it’s not great at measuring inflation. But gauging inflation can be tricky; so today, I wanted to discuss some reasons for the anger over the

This is why a global slowdown will hit by summer

So, the data are weakening. What does that portend for the rest of the year? Lakshman Achuthan of the ECRI thinks it means a serious global slowdown. Below is a recent interview he did on Yahoo’s Tech Ticker explaining why

Still Home Sick

The separation of abodes from investments should work to the advantage of rentals in future years. We’re not suggesting that Americans will give up on single-family owner-occupied housing. The idea of a single-family home of your own is just too deeply embedded in the American culture. But many who have no pride of home ownership and who would vastly prefer to yell for the “super” (New York-ese for the building superintendent) than to apply a wrench to a leaky pipe have bought houses and apartments in past decades only to participate in capital appreciation

Norges Bank Raises Rates

While many of our readers may not be particularly interested in Norway, two of our Casey Report investment picks are in the country – hence the quick update on the Norges Bank’s (the Norwegian Central Bank) rate decision

El-Erian on Investing in Periods of Financial Repression

Financial repression leads to investors’ leveraging up, moving abroad, moving out on the risk curve or moving into riskier asset classes. Apparently, Pimco is employing all of these strategies. Will it work, though? I say greater risk doesn’t always mean greater reward. That means leverage and risk-seeking strategies will result in underperformance and could lead to losses