Eurodollar University

European Central Bank President Christine Lagarde and Vice-President Luis de Guindos discuss the ECB's rate cut decision, the inconsistency in inflation data, and the implications on the economy, credit, and global risks, questioning the reliance on outdated economic theories.

More labor market cracks are showing and expanding. Even some of the data which has been resilient may have to be substantially changed given new information that just came to light. Labor weakness continues to clear out the FOMC setting the Treasury market up the next rally - though it isn't quite there yet. Eurodollar University's Money & Macro AnalysisADP National Employmenthttps://adpemploymentreport.com/ADP Pay Insightshttps://payinsights.adp.com/?_ga=2.165121663.1500609015.1717601960-340309474.1717601960BLS QCEW Overviewhttps://www.bls.gov/cew/overview.htmBLS QCEW https://www.bls.gov/news.release/cewqtr.nr0.htmhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

As more weak data pours in on the US economy, the more clarity it offers on the future path of ST interest rates. As that clears up, market rates are moving lower. But why? Mainstream theory demands we consider rates as entirely supply or demand factors (like QE). Yet, the past couple years have thoroughly disproven the idea. Rates are going lower because that's where and what the fundamentals are. Eurodollar University's Money & Macro AnalysisBloomberg Majority of Middle-Class Americans Say They Struggle Financiallyhttps://www.bloomberg.com/news/articles/2024-06-04/two-thirds-of-middle-class-americans-face-hardship-in-poll?srnd=economics-v2https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

A rare warning strikes the gasoline market in another confirmation of economic weakness, one primary factor which forced OPEC this past weekend to extend its production restrictions. On top of those, big changes to US income estimates further corroborating the deterioration, as did a surprise drop in one of the more critical sentiment signals.Eurodollar University's Money & Macro AnalysisReuters Weak US gasoline demand compounds pressure on oil ahead of OPEC+ meethttps://www.reuters.com/business/energy/weak-us-gasoline-demand-compounds-pressure-oil-ahead-opec-meet-2024-05-31/Nikkei  OPEC+ extends deep oil production cuts into 2025https://asia.nikkei.com/Business/Energy/OPEC-extends-deep-oil-production-cuts-into-2025ISM Manufacturing May 2024https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/may/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Weak economic results continue to roll in, matching other sources of information about the US economy. From the Federal Reserve's own account and data to more corporate reports. They all have one thing - and one word - in common. GDP revisions plus the first update on the state of GDI and its bigtime mismatch. Eurodollar University's conversation w/Steve Van Metrehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Tensions are rising. Aggressive actions are becoming commonplace. This isn't just sabre-rattling and posturing as war is a real possibility. It's not difficult to see why, at least what some of the motivation is. China's central bank is publicly discussing even more highly unusual steps to try to reign in the unfolding financial and economic backlash which was just confirmed by even more data. Eurodollar University's Money & Macro AnalysisBloomberg US Commander Warns China Is Fast Becoming More Aggressive in Regionhttps://www.bloomberg.com/news/articles/2024-04-23/us-commander-warns-china-is-fast-becoming-more-aggressive-in-regionBloomberg Xi’s Cryptic Bond Comments Hint at PBOC Becoming More Like Fedhttps://www.bloomberg.com/news/articles/2024-04-01/xi-s-cryptic-bond-comments-hint-at-pboc-becoming-more-like-fedCNBC Philippine president says killing of a Filipino in South China Sea clash would be ‘very close’ to act of warhttps://www.cnbc.com/2024/05/31/ferdinand-marcos-jr-philippine-president-talks-red-lines-in-south-china-sea.htmlBloomberg Marcos Swipes at China, Vowing Not to Yield in Disputed Seahttps://www.bloomberg.com/news/articles/2024-05-31/marcos-swipes-at-beijing-in-vow-to-not-yield-in-south-china-seaBloomberg China Ramps Up Warning on Bond Frenzyhttps://www.bloomberg.com/news/articles/2024-05-31/china-ramps-up-warning-on-bond-frenzy-with-pboc-selling-in-focusDow Jones Chinese State Media Hint at Possible PBOC Bond Sellinghttps://www.morningstar.com/news/dow-jones/202405311908/chinese-state-media-hint-at-possible-pboc-bond-sellingNikkei Asia Foreign direct investment in China falls to 30-year lowhttps://asia.nikkei.com/Economy/Foreign-direct-investment-in-China-falls-to-30-year-lowhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

More corporate mayhem brought on by the "uncertain market environment." Stocks of both Salesforce and Kohl's were hammered today as each company demonstrates in their own way just what the updated GDP numbers suggest. That latter data report also includes GDI which is almost certainly closer to the real economy all these other sources are projecting. Eurodollar University's Money & Macro AnalysisCNBC Salesforce shares tumble 20%, on pace for worst day since 2004https://www.cnbc.com/2024/05/30/salesforce-stock-fall-earnings-revenue-miss.htmlBloomberg  Salesforce Shares Plunge by Most Since 2008 After Weak Outlookhttps://www.bloomberg.com/news/articles/2024-05-29/salesforce-gives-weak-sales-outlook-with-slowdown-fears-growingCNBC Kohl’s stock plummets 25% after massive earnings misshttps://www.cnbc.com/2024/05/30/kohls-kss-earnings-q1-2024.htmlKohl's Kohl's Reports First Quarter Fiscal 2024 Financial Resultshttps://investors.kohls.com/news-releases/news-details/2024/Kohls-Reports-First-Quarter-Fiscal-2024-Financial-Results/default.aspxBEA  Gross Domestic Product, First Quarter 2024 (Second Estimate) and Corporate Profits (Preliminary)https://www.bea.gov/news/2024/gross-domestic-product-first-quarter-2024-second-estimate-and-corporate-profitshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

More CRE developments today and last week this time with a focus on Europe. New reports indicate losses are coming soon and data from the ECB shows why there are so many concerns. We also have the latest bank lending figures which show more troubling signs under the cover of 'extend and pretend.'Eurodollar University's Money & Macro AnalysisECB Commercial real estate and financial stability – new insights from the euro area credit registerhttps://www.ecb.europa.eu/press/financial-stability-publications/macroprudential-bulletin/html/ecb.mpbu202210_4~0aa7d44e15.en.htmlReuters Explainer: European banks and their $1.5 trillion commercial property headachehttps://www.reuters.com/business/finance/european-banks-their-15-trillion-commercial-property-headache-2024-02-15/S&P Global Investors expect surge in bad commercial real estate loans at European bankshttps://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/investors-expect-surge-in-bad-commercial-real-estate-loans-at-european-banks-81618608FitchRatings Global Contagion Risk Growing from Rising CRE Losses, Led by Officehttps://www.fitchratings.com/research/non-bank-financial-institutions/global-contagion-risk-growing-from-rising-cre-losses-led-by-office-02-04-2024https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

More data released today which shows the US economy has taken a turn for the worse. Consumers are running out of options and are turning in huge proportions to alternate means to stay afloat. One of those alternatives, however, is being closed off as the American banks are now actively cutting back risk while going on a buying binge for safety. Eurodollar University's Money & Macro Analysisnerdwallet  2024 State of Consumer Credit Reporthttps://www.nerdwallet.com/article/credit-cards/2024-consumer-credit-reportCNBC 25% of consumers recently used a buy now, pay later loan, report finds. What to know as they become popularhttps://www.cnbc.com/2024/05/28/buy-now-pay-later-loans-are-second-only-to-credit-cards-in-popularity.htmlFRBNY HOUSEHOLD DEBT AND CREDIT REPORT (Q1 2024)https://www.newyorkfed.org/microeconomics/hhdchttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

What's misinformation about the economy? It's a well-known fact policymakers and Economists outright lie about any situation. But why? They say it's for your own good. The lies are beginning to pile up so much that officials now have to lie about their lies, including the very theory behind all of this especially when some of the theoreticians who came up with it no longer want to be the very purveyors of misinformation. Eurodollar University's Money & Macro AnalysisGeorge DeMartino Should Economists Deceive? Prosocial Lying, Paternalism, and the ‘Ben Bernanke Problem’https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1256&context=peri_workingpapersDeLong & Summers How Does Macroeconomic Policy Affect Output?https://www.brookings.edu/wp-content/uploads/1988/06/1988b_bpea_delong_summers_mankiw_romer.pdfBrad DeLong Greater Depressionhttps://www.project-syndicate.org/commentary/j--bradford-delong-argues-that-it-is-time-to-call-what-is-happening-in-europe-and-the-us-by-its-true-nameBank of England  Ben Bernanke to lead review into forecasting at Bank of Englandhttps://www.bankofengland.co.uk/news/2023/july/ben-bernanke-to-lead-review-into-forecasting-at-bank-of-englandBank of England Forecasting for monetary policy making and communication at the Bank of England: a reviewhttps://www.bankofengland.co.uk/independent-evaluation-office/forecasting-for-monetary-policy-making-and-communication-at-the-bank-of-england-a-review/forecasting-for-monetary-policy-making-and-communication-at-the-bank-of-england-a-reviewMervyn King Per Jacobsson Lecture: The World Turned Upside Down: Economic Policy in Turbulent Timeshttps://meetings.imf.org/en/2019/Annual/Schedule/2019/10/19/imf-seminar-per-jacobssonhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU