Credit spillovers from Eur banks to EM

Makes sense. I always wondered how that loan demand was accommodated. Never looked like the kind of lending US regulators would sanction. Karim writes: Interesting table from JPM. Much larger dependence on credit from Eur banks for LATAM economies than from U.S. banks. Poland/Russia not as surprising but still large! Overall, domestic bank lending surveys […]

Payrolls and a Fed rant

Utter failure of policy. The Fed was certain it knew what Japan had done wrong and wasn’t going to make THOSE mistakes. So it Cut rates much more aggressively. Said it would do whatever it takes. Figured out how to do its job as liquidity provider after only 6 months of alphabet soup programs. Did […]

Retail Sales and euro dynamics

Agreed. Fundamentally, the 8%+ US federal budget deficit continues to support sufficient aggregate demand for modest GDP growth. Market participants don’t seem to understand this and were discounting a far higher probability of a recession than otherwise. The strong euro/weak dollar strong stock dynamic continues, with the ECB continuing it’s strong euro policy of forced […]

FOMC Statement(3 dissents)

Karim writes: Pretty tepid response in light of the changed assessment of current conditions and outlook. No hike thru early 2013 was already priced, so stating that they are unlikely to hike thru at-least mid 2013 doesn’t buy them that much more in terms of taking out tightening. Also, didn’t apply ‘extended period’ to balance […]


Karim says: CLAIMS Labor Dept cites delayed filings in 4 states (Georgia, Alabama, North and South Carolina) as cause for 51k back-up in claims. Those states probably depressed prior number, so current level likely closer to 420k; consistent with 150-200k gains in payrolls ORDERS Core capital goods orders rise 1.4% in December after 3.1% gain […]


Karim writes: * Headline came in as expected, but details strong. * Gap between new orders and inventories (which declined sharply for both suppliers and customers) at highest since May 2010. * Employment down modestly but still at high level. * Prices paid remains elevated but appears of little consequence for inflation; Prices Paid ranged […]

Data Recap from Karim

Karim writes: The overall income numbers held up well for November despite the weak payroll number; momentum building for consumer spending; capex staged solid rebound Personal income up 0.3% Real disposable income (after inflation and taxes) up 0.2% Personal spending up 0.3% and up 3.8% last 3mths annualized Core PCE deflator 0.1% and 0.8% y/y […]

Bernanke speech

Karim writes: Very substantive speech from Bernanke Message is basically, ‘growth has slowed more than we expected’ BUT ‘conditions are ALREADY in place for a pick-up’ and if we are wrong, we are ready to take action, which contrary to some perceptions, will be effective Yes, contrary to my opinion. This about managing expectations. With […]


[Skip to the end] Agreed. We could see positive growth for while without much improvement in final demand, supported longer term by government, exports, and investment. Equity markets strong, better than expected earnings, with real estate to follow with a lag, and high unemployment keeping real wages/business costs down. Real wealth continues to flow from […]