Coincident Economic Indicators
Confidence & Causality
It will be years before policymakers know the long-term effects of the COVID experiment with Modern Monetary Theory. However, the episode has helped answer, once and for all, a question that’s troubled psychologists forever: Money can buy happiness! But it can’t buy hope.
The Inversion Before The Inversion
We found the spread between the “Expectations” and “Present Situation” series (the “Confidence Gap”) has historically moved almost in lockstep with the yield curve. As the Confidence Gap plummeted throughout 2021, the implication was the yield curve would soon follow. After some initial resistance, it did.
Tightening Into A Slowdown: Month Seven
An economy can slow to a standstill on a “real” basis while growing rapidly in nominal terms; it happens in emerging economies all the time. But this dichotomous condition now afflicts most of the developed world.
Carbon-Dating The Recovery
If January is the 21st month of the recovery, then time has elapsed in “dog years.” And that might put this “canine” recovery at around 12 years—just shy of where we might be had COVID never occurred!
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