Danielle DiMartino Booth, Quill Intelligence, GERMANY ECONOMIC REUNIFICATION3

Germany’s Economic Reunification — Can China Save the Global Reflation Trade?

Will the real Easter please stand up? Roughly one-in-three inhabitants of our shared planet can tell you that “on the third day” after the crucifixion, Jesus rose from the dead and ascended into heaven. They can also tell you what preceded the crucifixion — the Last Supper. That particular breaking of unleavened bread also happened to be a Passover feast, which marks the Jewish Exodus from slavery in Egypt. Or at least, that’s the version conveyed in Matthew, Mark and Luke. There was blanket agreement among the earliest Christians that what followed the ultimate sacrifice — life itself and new beginnings — should be commemorated. As for the day Easter would be celebrated, time would bring controversy.

Continue Reading “Germany’s Economic Reunification” Here

Danielle DiMartino Booth is CEO and Director of Intelligence at Quill Intelligence

For a full archive of my writing, please visit my website —  www.DiMartinoBooth.com

Click Here to buy Fed Up:  An Insider’s Take on Why the Federal Reserve is Bad for America.

Amazon.com | Barnes & Noble.com | Indie Bound.com  |  Books•A•Million

For Whom the Trade Bell Tolls — The U.S. Claims Permanent International Immunity

Being a visionary, Chief Engineer Alfred Noble knew that two tunnels could never carry the burden of traffic that would demand four. And so, beginning in 1904, as lead man representing S. Pearson & Son, Noble directed the doubling of the originally conceived plans and the simultaneous construction of four tunnels under the East River. On March 18, 1908, the engineering marvel, four tubes each measuring 23 feet in diameter were completed. These byways that remain in use to this day went into operation on September 8, 1910 coincident with the opening of New York’s Penn Station. This busiest travel hub in the Western Hemisphere welcomes 600,000 travelers every day.

To Continue Reading Click Here

Danielle DiMartino Booth is CEO and Director of Intelligence at Quill Intelligence

For a full archive of my writing, please visit my website —  www.DiMartinoBooth.com

Click Here to buy Fed Up:  An Insider’s Take on Why the Federal Reserve is Bad for America.

Amazon.com | Barnes & Noble.com | Indie Bound.com  |  Books•A•Million

Danielle DiMartino Booth, Economy, Federal Reserve, Quill Intelligence

A Private Affair — Shadow Bankers Ascend to Power

400 was a lonely number. At least that was the case circa 1836 New York when ex-mayor Philip Hone extended invitations to 250 “gentlemen of social distinction” to join the Union Club, the first private club to grace the streets of the metropolis. Once this cadre was formed, its membership was expanded to 400, coincidentally the capacity of Caroline Schermerhorn Astor’s Fifth Avenue ballroom. Why the cohort was checked at 400 first-generation Masters of the Universe remains an enigma. Less ambiguous were the club’s strictures. Dine, game, drink and puff away – its humidor once housed 100,000 cigars – but don’t think of dancing, a direct affront to the bastion of masculinity.

To Continue Reading Click Here


 

Danielle DiMartino Booth is CEO and Director of Intelligence at Quill Intelligence LLC

For a full archive of my writing, please visit my website Money Strong LLC at www.DiMartinoBooth.com

Click Here to buy Fed Up:  An Insider’s Take on Why the Federal Reserve is Bad for America

Amazon.com | Barnes & Noble.com | Indie Bound.com  |  Books•A•Million

 

The U.S. Economy Is on a Sugar High

The U.S. Economy Is on a Sugar High —

Many companies are rushing to secure products and materials before the trade war worsens

Across the U.S., companies are hitting the panic button. The Trump administration has levied 10 percent tariffs on $200 billion of Chinese goods, a charge that is expected to rise to 25 percent by 2019. This tops the tariffs on $50 billion of Chinese goods that were imposed in August, and is an effective tax on U.S. consumers, who will soon be paying more for everything from cosmetics to clothing to cars if they aren’t already.

Against that backdrop, it’s becoming clear that many companies are rushing to secure products and materials before prices rise regardless of current demand. You could say they are in panic-buying mode. The upside is that this behavior bolsters economic growth in the short term. The downside is that there is likely to be a nasty hangover. The noise in the economic data will be amplified by the rebuilding from Hurricane Florence. The estimates of the storm’s damage span from $20 billion to $50 billion.

Evidence that panic buying has set in was seen in the September Chicago Purchasing Managers Index report, which is a bellwether for the broader national manufacturing sector. While the results “disappointed,” with the index falling from 63.6 to a still high 60.4 and the new orders component sinking to a six-month low, the inventory component surged above the 60 mark. (In these diffusion indexes, readings above 50 denote expansion.) To put the stockpiling in context, inventories have only breached 60 twice this year. Such nosebleed readings are so rare that they rank in the 97th percentile over the last 30 years.

As per the Chicago PMI: “Firms continued to add to their stock levels, building on August’s marked rise. The scarce availability of inputs continued to encourage stockpiling while forecasts of higher future demand also contributed to the rise in inventories.”

There’s also been a pronounced increase in railcar volume. But the thing to know here is that data from the three biggest California ports, where the vast bulk of Chinese goods land on U.S. shores, arrives with a lag. We won’t have September data in hand until mid-October. Absent this port data, study the activity on BNSF and Union Pacific’s “Overland Route.” This old-school term begins at the West coast ports and ends at the railroads’ easternmost points. Take the number of rail cars in service and multiply it by how long these cars “dwell at terminal” to get a proxy of hours worked. That derivation roughly equates to aggregate hours worked in the employment report, due out Friday.

Indications that the tariffs will rise to 25 percent by year-end suggest the panic-buying mode will stay in effect for the next few months, making labor resources even more scarce. The latest Duke University CFO Survey reveals that those who set compensation budgets anticipate wages will rise by 4.8 percent over the next 12 months, the biggest increase in 18 years.

Artificial supply was evident in the August trade deficit, which came in at the widest in six months as exports slowed even as panic buying fueled imports. At the same time, wholesale inventories came in at nearly three times their expected rate while those of retail inventories came in stronger than their upwardly revised July levels.

The upshot is that economists have had to react in two ways. First, they’ve had to take down their third-quarter GDP estimates to account for weaker exports. On top of that, they’ve had to downgrade the quality of economic growth to account for the reasons behind the inventory build. Or, in the words of JPMorgan Chase & Co. chief economist Michael Feroli, the economy is looking “less boomy, more noisy.”

In the event you’re hoping the virtuosity of panic buying can become a permanent prop to the economy, you might want to rethink your thesis. To Feroli’s point, “less boomy” indicates a fundamentally weaker demand backdrop as the U.S. economy stretches into the final months to claim the trophy of the longest expansion in history.

Rather, artificial, tariff-driven panic buying pumps up GDP growth in the short term but ensures it will disappoint in the future. Look for fourth quarter estimates to be revised upwards and then look out below into the first of the year. And no, the first-quarter disappointment will not be the seasonal anomaly many economists typically ascribe to economic growth in the first three months of the year. In other words, it could be that much worse.


This article originally appeared in Bloomberg Opinions — 10.4.18

Danielle DiMartino Booth, a former adviser to the president of the Dallas Fed, is the author of “Fed Up: An Insider’s Take on Why the Federal Reserve Is Bad for America,” and founder of Quill Intelligence.

Read more opinion


Danielle DiMartino Booth is CEO and Director of Intelligence at Quill Intelligence LLC.

Visit QuillIntelligence.com to find out more. Click HERE to SUBSCRIBE.

For a full archive of my writing, please visit my website Money Strong LLC at www.DiMartinoBooth.com

Click Here to buy Fed Up:  An Insider’s Take on Why the Federal Reserve is Bad for America.

Amazon.com | Barnes & Noble.com | Indie Bound.com  |  Books•A•Million

 

Fulfilling the Forecast, Danielle Dimartino Booth

Fulfilling the Forecast — The Chimera of Nirvana in Price Controls

‘Tis better to attain or fulfill? A wise man in the Ghandara region of Pakistan, along its northern border with Afghanistan, once asked himself that very question. His answer was yes. Having heard Alexander the Great had reached his homeland, the king of Taxila wisely chose to attain survival, and in doing so, fulfill his Buddhist dream of achieving nirvana. Travelers to the remote region today can attest to the astonishing cultural fusion that took place beginning in the autumn of 327 BC as Alexander’s Macedonian army conquered even the most distant provinces of the Persian Empire.

To Continue Reading Click Here
Danielle DiMartino Booth is CEO and Director of Intelligence at Quill Intelligence

For a full archive of my writing, please visit my website MoneyStrong at www.DiMartinoBooth.com

Click Here to buy Fed Up:  An Insider’s Take on Why the Federal Reserve is Bad for America.

Amazon.com | Barnes & Noble.com | Indie Bound.com  |  Books•A•Million

DiMartino Booth, Money Strong, Quill Intelligence, Federal Reserve, Economy,MISLEADING BY EXAMPLE1

Misleading by Example — Foiling the Figment of Forward Guidance

Ah, but to be suspended on tenterhooks, suspense pulsing through your veins as so much adrenaline. Or not… Time has glamorized few words more than it has “tenterhooks.” It all started with freshly woven wool and an aggravated 14th century fuller, a craftsman tasked with its cleaning. Removing the oil and dirt required wetting the cloth which all but guaranteed shrinkage, the arch enemy of fullers. To the rescue rode the tenter, (from the Latin tendere, to stretch) a simple wooden frame, often in the form of a double-sided fence. Securing the cloth using hooked nails driven into the tenter’s perimeter and stretching it to the other side ensured both shape and size were retained during the drying process and the fuller’s coffers plump.


Danielle DiMartino Booth is CEO and Director of Intelligence at Quill Intelligence LLC.

Visit QuillIntelligence.com to find out more. Click HERE to SUBSCRIBE

For a full archive of my writing, please visit my website Money Strong LLC at www.DiMartinoBooth.com

Click Here to buy Fed Up:  An Insider’s Take on Why the Federal Reserve is Bad for America

Amazon.com | Barnes & Noble.com | Indie Bound.com  |  Books•A•Million

 

THE LIQUIDITY PARADOX

The Liquidity Paradox — Markets at Risk of Spontaneous Combustion

Members of the subtribe Hominina struggle mightily with spontaneity. Routine ensures order and the innate succor of predictability. Regrettably, life often diverges from script, jarring us from our safety zones. Perhaps we could learn a thing or two from fire, which has been known to self-ignite under the right conditions. Curiously, moisture is often the combustible catalyst. All that’s needed is a base of materials that have low ignition temperatures and protracted heat and humidity. Combine anything you’d find in a barn – hay, straw, or peat – and an endless stretch of sweltering, soupy summer days, which isn’t hard to imagine these days. A requisite amount of oxidation with a dash of bacterial fermentation later and you’ve laid the groundwork for heat that has no way to escape.

To Continue Reading Click Here

 


Danielle DiMartino Booth is CEO and Director of Intelligence at Quill Intelligence LLC.

Visit QuillIntelligence.com to find out more. Click HERE to SUBSCRIBE.

For a full archive of my writing, please visit my website Money Strong LLC at www.DiMartinoBooth.com

Click Here to buy Fed Up:  An Insider’s Take on Why the Federal Reserve is Bad for America.

Amazon.com | Barnes & Noble.com | Indie Bound.com  |  Books•A•Million

Embracing the Unexpected — The Ancient Art of Conceiving Systemic Risk

Woe was Heraclitus. Such was the weight of the world on the pre-Socratic Greek philosopher’s shoulders that he left this world known simply as the “weeping philosopher.” In his mind, life was not for those with the capacity to contemplate its meaning. Rather, life was lived fully by the innocent alone. In his words, no doubt misconstrued since he took his last breath in 475 BC, “Lifetime is a child at play, moving pieces in a game. Kingship belongs to the child.” As for those with designs on defying the odds, Heraclitus counseled that, “Everything flows, and nothing abides.” The beauty of paradox is that investigation lays bare the naivete of staunch doubters.

To Continue Reading Click Here — QuillIntelligence.com

 

Danielle DiMartino Booth is CEO and Director of Intelligence at Quill Intelligence LLC

For a full archive of my writing, please visit my website Money Strong LLC at www.DiMartinoBooth.com

Click Below to buy Fed Up:  An Insider’s Take on Why the Federal Reserve is Bad for America

Amazon.com | Barnes & Noble.com | Indie Bound.com  |  Books•A•Million

Quill Intelligence, Danielle DiMartino Booth, Economy, Central Banks, Federal Reserve

Tales of Bonds & Bondage

Tales of Bonds & Bondage — Central Banks Put Markets in a Vise

Crocodile Shears elicit anything but crocodile tears. And the Rack extracts as almost no other device. But it’s the Head Vise that tops the list of the most brutal torture techniques of all time. Introduced during the Spanish Inquisition (when else?), vises of all stripes employed compression to extrapolate the desired intelligence. Hands, feet and especially knee caps could be twisted, contorted and irreparably damaged. You might have lived to tell, but you couldn’t write about it and the scribe would have to come to you. The head though, when targeted, produced the most pitiless and violent of outcomes.

To Continue Reading Click Here — QuillIntelligence.com

 

 

Danielle DiMartino Booth is CEO and Director of Intelligence at Quill Intelligence LLC

For a full archive of my writing, please visit my website Money Strong LLC at www.DiMartinoBooth.com

Click Here to buy Fed Up:  An Insider’s Take on Why the Federal Reserve is Bad for America.
Amazon.com | Barnes & Noble.com | Indie Bound.com  |  Books•A•Million

DiMartino Booth, Money Strong

When K.I.S.S. Fails – Private Equity on the Razor’s Edge

Don’t you wish every day was Turnaround Tuesday? That’s the clever term coined by a buddy of mine at Citi who sadly cannot be named and take proper credit. But it is a great term to describe the pattern that’s emerged in this year’s first quarter, a three-month span most market players were relieved to see written into the history books.

As for what’s to come, the scent of spring is decidedly in the air. Car sales hit it out of the park in March thanks in no small part to a cordial calendar which provided 20% more Saturdays than 2017 did. Incentives that would make a Mad Man blush and rising interest rates did their fair share as well.

To commemorate the season’s good tidings, General Motors’ executives have, for the sake of our collective auditory intake, dialed back the volume on the noise by reducing the frequency with which they report sales to a quarterly basis, down from what had been a monthly pace since the 90s. To think how swimmingly that worked out for retailers. How very thoughtful indeed.

At the opposite end of the spectrum, it’s become deathly quiet in Tokyo’s bond trading pits. According to the Wall Street Journal, a brand spanking new 10-year issued March 13th didn’t trade…at all, the seventh such instance in 24 years of record keeping.

A well-kept secret closer to home is that the Federal Reserve wasn’t necessarily keen to taper its QE purchases back in 2014. No, the move was a bit more forced on the doves as market functionality was jeopardized because the Fed was buying such a huge slug of Treasury and MBS issuance.

Could the same hindrances be at work in Japan? Or has Kuroda seen the light and acknowledged that QE is as futile an endeavor as any ever undertaken by a central bank? My money is on the former.

Every month, the University of Michigan queries households on what they’re hearing in the news, good or bad. According to Dr. Gates, my eagle-eyed economist friend, something rather unusual happened in March. Upper-income households perceptions of the news swung 50 points from positive to negative.

How unusual, you ask? It is after all, just bluster and talk, not a full-blown trade war. Right? Let’s just say the biggest spenders in an economy that runs on spending aren’t convinced this will blow over. What’s particularly telling is the other three instances in history where such a huge swing has been recorded. That would be November 1987, which needs no explanation; July 2002, when accounting scandals wracked markets; and August 2011, when a no confidence vote on Uncle Sam jolted investors. File that where you like.

Speaking of friends, I would be remiss to not share the infinite wisdom of my good friend Peter Boockvar. He recently made the observation that we no longer live from one economic or business cycle to the next, but we rather ride one credit cycle after another according to the ebbs and flows of monetary policy. If you can’t appreciate the distinction, consider that in the pre-Greenspan world, the Fed’s hiking and easing campaigns made saving cash more or less appealing. Since 1987, however, the virtue of saving has been annihilated altogether, by design. Kind of gets under your skin.

Along those same lines, has all of this private equity fund raising begun to irritate you? “Pigs get fat, hogs get slaughtered” anyone? For more on what’s driving the fee-fest, please enjoy this week’s installment, When K.I.S.S. Fails: Private Equity on the Razor’s Edge.

Hoping you’re not still circling foggy La Guardia in the sky and wishing you well,

Danielle

PS. Please enjoy my latest Bloomberg column which highlights where the smart money is these days (Spoiler alert: it’s not in the stock market) in Powell Shows Markets Won’t Be Rattled by Volatility.

 

Subscribers click HERE for the current issue.

Click Here to Subscribe to the Money Strong Newsletter.

Click below to buy Fed Up:  An Insider’s Take on Why the Federal Reserve is Bad for America. 

Amazon.com | Barnes & Noble.com | Indie Bound.com  |  Books•A•Million