● Why Minsky Matters: An Introduction to the Work of a Maverick Economist
By L. Randall Wray
Summary via publisher (Princeton University Press)
Perhaps no economist was more vindicated by the global financial crisis than Hyman P. Minsky (1919–96). Although a handful of economists raised alarms as early as 2000, Minsky’s warnings began a half-century earlier, with writings that set out a compelling theory of financial instability. Yet even today he remains largely outside mainstream economics; few people have a good grasp of his writings, and fewer still understand their full importance. Why Minsky Matters makes the maverick economist’s critically valuable insights accessible to general readers for the first time. L. Randall Wray shows that by understanding Minsky we will not only see the next crisis coming but we might be able to act quickly enough to prevent it.
Continue reading →

US private-sector employment rocketed higher in October, the Labor Department reports. Last month’s bigger-than-forecast 268,000 increase is the biggest monthly rise so far in 2015 and dramatically above the soft increases in the previous two months. The gain is strong enough to dispense the first improvement in the annual pace of growth since May. It remains to be seen if the bullish rebound survives future revisions and endures in the months ahead. But for the moment, today’s employment report just gave the Federal Reserve a green light to start rising interest rates.
Continue reading →

Some of the usual suspects were advocating bank failure earlier this week on Bloomberg TV as a policy roadmap for success during economic and financial crises. It’s a convenient recommendation because the idea’s inherent contrarian drama offers a veneer of logic and provides an entertaining talking point for television. Saving bankrupt entities from the laws of free-market gravity, after all, is grounded in economic logic, common sense and a pro-growth agenda. All true… except when it comes to banks. This isn’t open for debate. Banks are different and must be treated differently when the grim reaper is knocking. Hundreds of years of empirical evidence speak loud and clear on this point. Learning from history isn’t on everyone’s agenda, however. But no matter how many times you insist that down is up, the historical record remains unchanged.
Continue reading →

● US jobless claims rise, but remain near historic lows | CBS MoneyWatch
● US Oct job cuts down 14% vs. Sep and 1.3% lower YoY | Challenger, Gray
● US Consumer Comfort Index falls to 7-week low | Bloomberg
● Bank of England expects low rates and inflation to continue | Telegraph
● Economists expect rebound in US Oct job growth | Reuters
● German industrial output slumps in Sep on emg mkt weakness | MNI

Private nonfarm payrolls in the US are projected to increase by 135,000 (seasonally adjusted) in tomorrow’s October report from the Labor Department, based on The Capital Spectator’s average point forecast for several econometric estimates. The prediction reflects a modest improvement over the tepid 118,000 gain in September.
Continue reading →

A December interest-rate hike is a “live possibility,” Federal Reserve Chair Janet Yellen said in yesterday’s testimony in Congress. The Treasury market took the hint and the 2-year Note—said to be the most sensitive maturity for rate expectations—jumped to 0.84% yesterday (Nov. 3), edging up to the highest level in nearly six years, based on daily data from Treasury.gov. Since last month’s low on Oct. 14, the 2-year yield has climbed sharply, rising 27 basis points.
Continue reading →

● US job growth ticks lower in Oct, ADP says | CNBC
● ISM: US services sector growth accelerates in Oct | USA Today
● PMI: US services sector growth moderates in Oct | Markit
● Global growth rebounds in Oct via Composite PMI data | Markit
● Eurozone retail sales fall in Sep: first drop in 6 months | Reuters
● German factory orders slide for 3rd straight month in Sep | Bloomberg

US companies added 182,000 jobs last month, according to this morning’s October update of the ADP Employment Report. The gain is in line with expectations and reflects a moderate increase that suggests that the US economy continued to expand at a stable if somewhat diminished rate compared with recent history. But while today’s release implies that US business cycle risk remained low in October, there’s a worrisome trend to consider for the near-term future: the ongoing deceleration in the year-over-year growth rate.
Continue reading →

Backtests have become the weapon of choice for rationalizing various forms of tactical asset allocation, which has become increasingly popular as a risk-management tool since the 2008 crash. The hazards of backtesting—studying how a strategy performed in the past–are well known, which leads some folks to shun the concept entirely. But that’s going too far.
Continue reading →

● Total light-vehicle sales in US rise in October | MarketWatch
● US factory orders fell again in September | Reuters
● Redbook: US chain store sales tick higher in October | DJ
● PMI: Modest growth for Eurozone in composite data for Oct | Reuters
● PMI: UK services sector growth rebounds in Oct | Markit
● PMI: China services sector growth picks up to 3-month high | RTT