Macro Observations

More than half of people, according to Experian, carry some type of balance on their credit cards. I think we have ample evidence to suggest that the reason for rising consumer credit card debt is that people are simply becoming very financially strapped. Just recently, total outstanding credit card balances just passed the $1 trillion mark.

If there’s one thing that the markets have taken for granted over the past 15+ years, it’s that the Bank of Japan will keep monetary conditions as ultra-accommodative as possible. It’s time for a little thought experiment. What happens if the Bank of Japan surprises the markets and decides to tighten policy this month? Will it get rid of yield curve control? Will it raise interest rates?

The financial markets always pay attention to the latest economic data, but it feels like it’s taken on even greater importance over the past two years. Now, the street is watching the labor market and when the cracks might finally show up that would clear the path for a global downturn. The thing is, most of the numbers don’t really matter.