Pulse


The Powell Put: Fed Easing and Market Performance

The latest quarterly report by the Bank for International Settlements (BIS) underlines the change in the relationship between the major central banks and financial markets.  Claude Borrio, the BIS’s Chief Economist, describes the “extraordinarily tight” relationship between central banks and financial markets in the aftermath of the financial crisis and recession of 2008. Thus, the financial markets scrutinize the central banks for cues, while at the same time relying on central bank “puts” for comfort.

Data Round-Up: Big Upside Surprises in Existing Homes Sales, Wholesale Inventories

This morning’s very upbeat February Existing Home Sales report. Also this morning, wholesale book-value inventories jumped +1.2% in January; the consensus had expected only a modest gain. However, international data was more worrisome with Germany’s Markit PMI falling further into the red, down -3 points to 44 in March (50 is break-even).

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Tech and Crypto Alignments

Financial and technology organizations in Chicago have had a busy first quarter of events. This issue links to stories on alignment and community building in cryptoasset, wealth tech, and payments markets.

Can Chicago Become a Crypto Capital?

The US Military in Support of Strategic Objectives in Latin America and the Caribbean

I am sharing my newly published article that explicitly examines the contribution of the US military to strategic objectives in Latin America through security assistance and security sector assistance, as part of whole-of-government efforts to build relationships and strengthen governance in the region. 

Why Healthcare Is Spinning Its VBR Wheels

It’s like preparing and serving a seven-course meal that your biggest customer ordered only to have the entire menu change between the salad and the main course. That’s what it must feel like for hospitals and doctors dealing with the ever-changing value-based reimbursement programs from Medicare.

That thought came to mind when reading the Medicare Payment Advisory Commission’s latest annual March report to Congress. The 531-page tome makes all kinds of recommendations to the federal legislative branch on how to improve the government’s health insurance program for seniors.

Data Round-Up: Big Upside Surprises in Existing Homes Sales, Wholesale Inventories

Please check out FMI's analysis of this morning’s very upbeat February Existing Home Sales report. Also this morning, wholesale book-value inventories jumped +1.2% in January; the consensus had expected only a modest gain. However, international data was more worrisome with Germany’s Markit PMI falling further into the red, down -3 points to 44 in March (50 is break-even).
 

Why Americans Distrust and Fear Immigrants

Donald Trump demonstrated the power and broad appeal of attacking immigrants in 2016, with special emphasis on non-white immigrants. He did it again in last year’s midterm elections, when his passionate followers seemingly were unmoved by the cruelty of separating young children from their mothers at the border, or by Trump’s audacious claim of presidential powers to nullify the constitutional right to birthright citizenship. Race-baiting is usually an integral part of right-wing-populist politics, and of the President’s broader personal brand of nationalism.

Europe's Slowdown Prompts the ECB to Action

The European Central Bank (ECB) replicated the Federal Reserve Bank’s earlier U-turn on monetary policy at its latest meeting.  Barely three months after the central bank announcing an end to Quantitative Easing (QE), Mario Draghi, the ECB president, pulled the alarm over the sharp economic slowdown and announced a two-pronged approach. First, the central bank would continue its ultra-low interest rates policy at last through the end of 2019. Second, barely three months after announcing), the ECB will provide continued support to financial markets and banks.

Navigating Guyana’s muddy waters

From February 19 through 27, I traveled to Georgetown, Guyana, to speak with individuals in the government and the private sector about the nation’s security challenges and internal dynamics. The country is in a potentially explosive political crisis with at least some similarities to the polarized situation in Washington, DC. In the midst of legal battles with consequences for who controls the country, intelligent, sincere people are convinced that the taking of or continuation in power by their political opponents will be destructive for the nation and their own interests.

EconVue Spotlight

Another amazing week.  As politics got murkier however, markets surged higher.  In terms of what will be remembered decades from now, the event that shocked nearly everyone was the abrupt ending of the US-North Korea Summit.  As the next set of leadership-level meetings loom this month, surely the Chinese must be reevaluating their strategy vis-à-vis President Donald Trump. What these negotiations have in common is that in both cases the US is asking Kim Jun-un and Xi Jinping for structural changes that for different reasons each might have trouble delivering.

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