201602.10
2
1

It Was Never About Oil Part 2; It Was Always Leverage and Volatility

The entire point of leveraged positions is the margin of safety. That is true on both sides of that equation, as for the provider and the borrower/user. In the most famous examples of collapse, from AIG to LTCM losses were never really the issue. None of them could withstand instead collateral calls to their liquidity…

201602.10
0
0

Fundamental About Oil

The front month WTI futures contract traded as low as $27.27 this morning, a few dimes less than the low of January 20. Just three months out, however, the June 2016 contract is trading at $33.17 and up $0.43 on the day (as of this writing). Just two months further to August, that futures price…

201602.09 0

It Was Never About Oil

The link between stock prices and oil has been especially high of late, and that has left quite a few traders and experts stumped. For a good long while any impact from oil was denied as only “transitory” or even helpful to consumers through some sort of “tax cut” effect. In January 2016, however, liquidations…

201602.08
3
0

Futures Curve Now Suggests Far Less Recovery Than Early 2009

When the June 2018 eurodollar futures price touched above 98.50 on October 2, I thought that was an impressive bid suggesting just how much negativity had survived the August liquidations. It was interrupted by some backward optimism about China’s October Golden Week, but the eurodollar curve overall with the June 2018 maturity as a specific…

201602.08
0
0

Why Japan Went NIRP: No More Doubts About QQE

When real household spending fell by 4.6% in April 2014 it was cause for concern. That was the first month after the tax hike hit and the decline in spending was much larger than anticipated (by economists, at least). Despite the heavy toll, Bank of Japan officials remained (outwardly) wholly unconcerned over what was believed…

201602.08
0
0

No Surprise To Find Dealers Hoarding For A Third Time

If the world is poised upon the precipice of “deflation” and the ugly economic consequences of reduced “money supply”, at the middle of all that are the primary dealers – still. While it is technically correct to claim that the Fed expanded its balance sheet to $4.5 trillion, with $2.4 trillion left after autonomous factors…

201602.03
1
0

Potential Connections

You simply cannot act as a money dealer when the money you are dealing is highly suspect. I am not writing about money in the true sense, such as any tangible form that falls under property laws of custody and bailment, but rather the wholesale “money” that is derived under the much looser and unconstrained…

201602.03
4
0

Suicidal Tendencies, But ‘New and Improved’!

Advertising in the modern age is an extremely difficult task with all the clutter and noise. If you hadn’t noticed, it leaves many products experimenting with packaging in order to sell “new and improved.” The “easy pour spout”, for instance, became commonplace as if the old manner of detergent weren’t easy or comfortable to begin…

201602.01
9
1

It Starts: Junk Bonds ‘Contained’

To an economist, the economy can bear no recession. In times of heavy central bank activity, an economy can never be in recession. Those appear to be the only dynamic factors that drive economic interpretation in the mainstream. And they become circular in the trap of just these kinds of circumstances – the economy looks…

201601.28
2
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Fundamental and Finance; Really Downward

Rumors persisted about Iran, Russia or OPEC close to declaring productions cuts, so that has to factor at least into sentiment about oil trading. However, with rumors being denied, the physical universe of crude oil especially in the US has been fundamentally more negative again. Yet, oil prices have reached back to almost $34 (front…