It’s A Big World Out There

Home country bias is the tendency for investors to focus more on their domestic economy and markets. For most of the people reading this the US markets are home and with the Dow breaking 17,000 this past week the US is certainly getting a lot of attention. And it deserves it I guess considering the .. read more

Yellen Looks the Other Way

More of the same from Janet Yellen in her latest speech, but her focus on “resilience” caught my attention as it relates to very recent developments. The taper threat experience last year may have been a warning, but it doesn’t seem like it resonated with her or policymakers. The major bond selloff, which led to .. read more

The Golden Tail?

The positive price action in gold of the last few weeks stands out in sharp contrast to other sectors of the funding market, particularly repo. Under last year’s defiling paradigm, such a collateral shortage as pronounced as what we see now would have been disastrous for gold prices (more collateral demand typically leads to an .. read more

An Incomplete Picture: Reverse Repos, T-bills and Gold

The explanation given for the increase in participation at the reverse repo “window” in mid-April was taxes. In other words, the payment of quarterly and annual estimates and billings reduced the need for the federal government to borrow. Since the variability in borrowing amounts is taken up in t-bills, the relative scarcity of on-the-run t-bills .. read more

We Shale Overcome

What is (was?) Quantitative Easing intended to accomplish? Here’s what Ben Bernanke said at Jackson Hole when he first proposed the program: The channels through which the Fed’s purchases affect longer-term interest rates and financial conditions more generally have been subject to debate. I see the evidence as most favorable to the view that such .. read more


Investing is an inherently risky business with lots of uncertainties. At any given moment there are numerous questions the answers to which are not only unknown but unknowable. The future is not predictable and history can at best act as only a guide. Although rare, paradigm shifts do occur and one must always question whether .. read more

Now Gold Too

Apparently the stasis that has infected credit markets has been visited upon gold prices. Going back to late March, gold has straddled the $1,300 level without straying too far on either side. As with other credit market prices, such stability is conspicuously different from what would be considered “normal” market behavior. Is it possible the .. read more

The Gold Tug of War

A recently issued report from the World Gold Council surmised that it was “feasible” for as much as 1,000 tons of physical gold to have become entangled with financing deals in China last year. That would/might account for some portion of the physical metal that has moved East in recent years, as metal inventory has .. read more