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Federal Reserve/Monetary Policy

No Flip Flop in Europe

By |2017-07-20T17:25:07-04:00July 20th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Well, that clears that up. In case you missed it, back on June 27 Mario Draghi triggered the latest declared BOND ROUT!!! with what was characterized as a very upbeat economic assessment for Europe. And if things are moving forward there, they just have to be everywhere else. It came off as “hawkish” in the sense that if real acceleration [...]

Why Might Hong Kong Still Be Interesting?

By |2017-07-19T19:14:03-04:00July 19th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When the People’s Republic of China (PROC) was granted full UN status in 1971, everything was then set in motion. The successor to Chaing Kai-shek’s nationalist government in the Republic of China (ROC, or what we call today Taiwan) was originally granted as a founding member and one of five Security Council seats. UN General Assembly Resolution 2758 instead recognized [...]

Y2K Was Really The Great Uncertainty

By |2017-07-19T18:15:24-04:00July 19th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In late 1999, the Federal Reserve established what was ostensibly an emergency credit facility. On October 1 that year, this offshoot of the Discount Window went live. Its main feature was that it was to be a primary program, meaning that banks didn’t have to prove they could access funds elsewhere first. They could go there freely without fear of [...]

The Plural of Anecdotes Is Beige

By |2017-07-19T15:47:47-04:00July 19th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As noted before, the Federal Reserve’s Beige Book collection of local bank district anecdotes are fascinating for all the wrong reasons. What is revealed is not the state of the economy, but rather the state of how policymakers perceive or often wish the economy was at various points. If the 2007 Beige Books are a collective case study in denial, [...]

When You Stop Reading After The Second Sentence

By |2017-07-18T16:14:36-04:00July 18th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On June 27, ECB President Mario Draghi opened that central bank’s international conference in Sintra, Portugal. Most media never made it past the first two sentences of his prepared remarks. For them, the verdict was already delivered in those few lines. They declared that Draghi declared monetary policy was working and the world was on its way at long last. [...]

A Decade of Fallacy

By |2017-07-18T14:19:24-04:00July 18th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Ten years ago yesterday, Bear Stearns sent a letter to shareholders of two specific hedge funds that it sponsored. Whenever anyone brings up the name now, you immediately know where this is going. That wasn’t the case in 2007, however. Whatever the world may think of Bear in hindsight, a decade ago it was a highly reputable firm. These two [...]

China’s Ghosts Are A Future Property

By |2017-07-17T13:12:58-04:00July 17th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The term “ghost city” is a loaded one, often deployed to skew toward a particular viewpoint. In the context of China’s economy, it has become shorthand for perhaps the largest asset bubble in human history. While that may ultimately be the case, in truth China’s ghost cities aren’t about the past but its future. There is a great deal that [...]

Industrial Drag

By |2017-07-14T17:32:50-04:00July 14th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Completing a busy day of US economic data, Industrial Production was, like retail sales and inflation data, highly disappointing. Prior months were revised slightly lower, leaving IP year-over-year up just 2% in June 2017 (estimates for May were initially 2.2%). Revisions included, the annual growth rate has been stuck around 2% now for three months in a row, suggesting like [...]

Fool Risk Realized

By |2017-07-14T13:36:19-04:00July 14th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Legendary football coach Bill Parcells once said, “you are what your record says you are.” It was a pearl of wisdom plucked from wherever Yogi Berra used to wander, made into a brutal truth delivered cunningly as a blatant tautology. We’ve all heard of how sports teams are “good on paper” or “better than their record”, but Parcells succinctly dismissed [...]

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