Business

For the 16th month in a row (longer than the 14 month stretch during the financial crisis), Swiss Watch exports have collapsed year-over-year. As Bloomberg reports, the 16.4% plunge in October is the biggest monthly drop in seven years, as demand weakened in almost every major market for Rolex and Omega timepieces.

Bloomberg adds that shipments fell to 1.68 billion francs ($1.7 billion), the Federation of the Swiss Watch Industry said in a statement Tuesday, with 13 of the top 15 markets were negative in October.

Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

The United States has recorded a trade deficit in each year since 1975. This is not surprising. After all, we spend more than we save, and this deficit is financed via a virtually unlimited U.S. line of credit with the rest of the world. In short, foreigners in countries that save more than they spend (read: record trade surpluses) ship the U.S. funds to finance America’s insatiable spending appetites.

The most notable thing about today's Treasury auction of $34 billion in 5 Year paper is not what happened after the 1pm announcement of its pricing, but what has been taking placed in the last few days, where as the following charts from SMRA, there has been a major surge in shorts, who have in turn sent the underlying paper "super special" in repo, to the tune of -2.50% as of this morning.

October saw exisitng home sales (SAAR) surge to 5.60mm (handily better than the 5.44mm expectation). These are deals essentially done in August and September - weeks before mortgage rates exploded higher - and with median home prices hitting new highs as the cost of funding spikes, it is hard to se how this is sustainable.

What happens next?

The 2013 taper tantrum spike in mortgage rates created a 10% plunge in existing home sales in the following 4 months.

If everything is so awesome, with a growth/inflation miracle just around the corner, then why is the US treasury yield curve collapsing in a dismal-growth-outlook-implying manner?

Followingthe kneejerk spike on the election, 5s30s have crashed to 6 week lows...

Nowhere is this decoupling from reality narrative more obvious than in the banks as NIM is a spread not an absolute...