201410.22
1
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Textbook Demolition

The chatter that continues over Japan’s spiral into (further) economic impoverishment is simply astounding since it is taken as “expert” by the media. A credentialed economist will look at some numbers and simply take them as meaningful, especially if they are the “right” sign in the “right” direction. This is either wholly obtuse or intentionally…

201410.21
2
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China’s Malaise Is Born In The USA

First, the China Manufacturing “Flash” PMI had “markets” exhaling relief since an increase from 50.2 to 50.5 meant, Manufacturing Rebound Relieves Growth Concerns. A week later, however, that PMI increase disappeared as the final PMI for September came in at an even 50.2 instead – which altered the commentary from “rising” manufacturing to “thankfully” steady…

201410.20
0
0

Back to Sleep

The reason I have been characterizing the ECB’s actions since this summer as “desperate” is entirely due to the fact they are simply redoing things and expecting everyone to simply assume they are acting anew. That may not be entirely the case with their obsession with Eonia (more on that below), but narrowing the corridor…

201410.17
2
0

No Hiding From Credit, European Style

As much as there has been movement and drama in US credit, the same can be said of European credit. That is, of course, no surprise given the vast linkages between the two, but that does not necessarily diminish the European “flavor” of those home “markets.” Most attention is paid to Germany and its bund…

201410.17
1
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No Hiding From Credit Now

Yesterday, in the wake of some intense credit market drama, St. Louis Fed President James Bullard acknowledged the obvious. Quoted in the Wall Street Journal, Bullard showed just how upside down these “markets” have become. “Inflation expectations are dropping in the U.S., and that is something that a central bank cannot abide,” Mr. Bullard said….

201410.17
1
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Liquidity Discrepancies Are Not A Particularly Welcome Signal

My colleague Joe Calhoun noted that the Wall Street Journal has documented further anecdotes about the credit market illiquidity this week. Corporate-bond investors have struggled this week to find trading partners for some large orders, causing unusual price drops and raising concerns that trading could freeze in future market turmoil. “Buyers just disappeared” early Thursday…

201410.17 0

Tangled Web Of The Asian Dollar And The Implications Of Altered Central Bank Thinking

The PBOC continues along with its path of “targeting” liquidity rather than “flooding” as has been done in the past. Expectations for Chinese action, however, seem to be resistant to getting that message. This is not something that is just now being applied, as if a sudden and unanticipated change in thinking. The entire default…

201410.16
4
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Another Reminder Gold Is Not Often As It Seems

The problem with being long gold, or even a fan of gold as anathema to central bank “flexibility” in central planning, is that you are often reminded the messiness of its modern nature. Gold as money, properly understood, meant money as property which is why physical metal fit so well for maybe all of “civilized”…

201410.15
1
0

Eurodollars Changing Minds?

The good news for global “markets” is that the eurodollar curve suggests some further relief from the persistent “tightening” that has gripped the “dollar” system since July. The bad news is that the curve is now less enthralled with the idea that the FOMC might actually raise rates as they say they will. That includes…

201410.15
1
0

What A Morning

An unbelievable morning of credit market trading has at least seen some semblance of “market” forces return by the afternoon. One aspect is certain, that the open was about as illiquid as the treasury market has seen in a long, long time. We should not make the mistake of illiquidity being only associated with selling,…