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Thoughts From The Divide - Archive

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Central Bank Scorecard - June 18, 2019

We examine Leika Kihara’s chronicles of Haruhiko Kuroda, which found that the monetary experiments implemented by the BoJ have failed. Also, we look at Eric Sims and Jing Cynthia Wu’s model that draws conclusions from unconventional monetary policy tools.

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Interest Rates Re-Examined - June 12, 2019

Last week, we took a look at Ken Rogoff’s speech regarding why negative interest rates are foreseeable in the future. We now turn our attention to people who disagree with the assumptions underlying central bank policy.

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Unconstrained Negative Interest Rates - June 4, 2019

We go over Kenneth Rogoff & Andrew Lilley’s recent paper, “The Case for Implementing Negative Interest Rate Policy” in which they argue that all monetary policy tools are not the best and we need to start going towards a negative interest rate policy.

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Shaky Confidence and Italy - May 28, 2019

Recent US data, such as Case-Shiller Home Price, Durable Goods Orders, and New home sales continue to underwhelm, but this could be related to current trade tensions. We also take a look at current tensions between the European Commission and Italy over Italian budgeting.

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Trade Ripples - May 21, 2019

We talk about the recent implications of the trade war between the United States and China and its implications on some big name companies, and touch upon Chas W. Freeman’s speech regarding Sino-American relations. Also, we have BONUS content in this Thoughts from the Divide!

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Déjà Vu: SBOI and Flipping - May 14, 2019

Recent news is giving us deja vu. The NFIB's SBOI data shows employment metrics are back near all-time highs. And house flipping is back in the news, with both small and large speculators taking some losses, but CoreLogic's report on flipping shows it's not yet time to be worried.

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The Fed and Evolving QT - April 30, 2019

Following Ex-Fed Kocherlakota's call for a rate cut, WSJ's Nick Timiraos details the economic conditions that would lead current FOMC members to consider cuts. Meanwhile, yet another recent Fed paper on reserves, this time in the context of a potential repo facility, indicates that, when it comes to the level of "ample reserves", they are just "guesstimating".



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Complicated Housing & Fed Preparation - April 23, 2019

The divergence in recent housing data both across price points and between new and existing housing imply complex dynamics going on under the surface. Also, while the Fed has cooed before, an ex-Fed president has gone as far as to say that the next move should be a rate cut.

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Quantitative Tightening & Auto Sales - April 9, 2019

This week we look at the recent flare up in Trump-vs-the-Fed battle over quantitative tightening and examine some peculiar dynamics in the auto sector via subprime auto loans.

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Superlative Labor & Missing Inflation - March 12, 2019

New Unemployment Rate data continues to surprise forecasters to the downside as job creation was at a record high. The strong labor market has economists puzzled over the lack of inflation, prompting the Fed to review their strategy, including looking at BoJ-inspired price controls.

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The Hibernating Phillips Curve - February 26, 2019

In a paper entitled “Prospects for Inflation in a High Pressure Economy: Is the Phillips Curve Dead or is It Just Hibernating?” by Peter Hooper, Frederick Mishkin, and Amir Sufi, they weigh in on the dynamic of inflation in a high pressure economy and the viability of the Phillips Curve.

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Mixed Housing Data - February 19, 2019

Recent housing data has been displaying mixed signals. On the positive side, homebuilders and consumers are confident in the future, while on the negative side, NAHB’s Opportunity Index, which measures affordability, is at its lowest reading in ten years. 

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SBOI, Inflation and the Fed - February 12, 2019

The NFIB released its Small Business Optimism Index and while the press was quick to comment on the weakness of the data, overall the numbers were not all bad. Also, get into why some research suggests that recent inflationary pressures are something to shrug off.

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Inflation and The Fed - February 5, 2019

While last Friday’s data dump all pointed to robust growth in the US, it seemed like the market was mostly focused on the hemming and hawing of the Federal Reserve. This week, we look at three interesting pieces that help make sense of it all.

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