Budget Deficit

Finding The Root Cause Of Recessions

"...unusually low economic volatility has allowed the U.S. to avoid recession since the financial crisis... But, if that should change for any reason..."

Bizarro World: JGB Yields Slide After BOJ Tapers

On Friday morning, the BOJ again lowered the size of its purchases of long-term JGBS to Y410 billion, a level last seen on January 27 of this year (when Kuroda boosted the amount of monetizable debt to halt a surge in yields) from Y440 billion. And, once again, not only did yields not shoot up, but they declined again.

Gavekal On The Coming Clash Of Empires: Russia's Role As A Global Game-Changer

Just when China is starting to offer an alternative—an alternative that the US should be trying to bury—the US is moving to “weaponize” the dollar and pound other nations—even those as geo-strategically vital as Russia—for simple domestic political reasons. It all seems so short-sighted.

As D-Day Looms, The Maturity Of ECB's Bund Purchases Drops Again

In its latest monthly purchase, the ECB revealed that the estimated weighted average maturity of purchases of German bonds under the ECB’s PSPP in July declined once again to around 5.18 years vs 5.33 years in June, although it was modeslty higher compared to the record lows of 3.99 years in May and 4.7 years in April and March.

When Will The ECB Run Out Of German Bunds To Buy: Here Is The Math

If the ECB were to reduce the pace of QE to €40bn per month starting in January, it should not run out of German government bonds to purchase until early 2019. On the other hand, if it keeps the current pace of QE, it will run out of paper in late 2018, and even with a downward revised €40bn monthly total, the ECB will have almost no German bonds left to buy in 2019.

CBO: Repealing Obamacare Would Increase Uninsured By 32 Million, Double Premiums

One month after the CBO scored the now defunct Senate healthcare bill, forecasting it would increase the number of uninsured by 22 million while cutting the budget deficit by $321 billion over the next ten years, moments ago the CBO released its latest score of what a straight repeal of Obamacare would look like.

"Willful Blindness"

"...analysts are once again hoping for a “hockey stick” recovery in earnings in the months ahead... few, if any, Wall Street analysts expecting a recession at any point the future...because optimistic analysis supports our underlying psychological “greed”, all real scrutiny to the contrary tends to be dismissed. Unfortunately, it is this “willful blindness” that eventually leads to a dislocation in the markets."

What The Senate's Healthcare Fiasco Means For Trump Policies: Goldman Explains

Looking at last night's Senate fiasco, Goldman writes that while Congress may still pass a health bill, "it just won't be this one" and notes that the "enactment of much more narrowly-focused health legislation is still possible this year, in light of problems facing the individual insurance market for 2018." And in terms of near-term catalysts, all eyes now turn to the debt ceiling debate due in September...

White House Reveals Budget Deficit Will Be $250 Billion Greater Due To "Mistake"

The budget deficit for President Trump's first two years in office will be nearly $250 billion higher than initially estimated, hitting $702 billion in fiscal 2017, due to what appears to have been a calculation mistake: a shortfall in tax collections and a mistake in projecting military healthcare costs, according to budget chief Mick Mulvaney.