201609.26
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The Dollar Perspective Matters

Perhaps the hardest part of analyzing the eurodollar system is synchronizing all its various dimensions into a common perspective. Coming from the traditional standpoint that views all these various parts as if they are all separate, such a task is often quite difficult. For example, the repo market is almost always described from the cash…

201609.26
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Why It’s Not Really About Deutsche: Overwhelming Evidence of ‘Something’ In ‘Dollars’

For quite some time now I have been writing (constantly) about “something” going in “dollar” markets and funding markets all over the world. Chinese markets related to “dollars” have been the most prominent in their disorder, but there is a degree of causation that runs from eurodollars to China and perhaps back again. In other…

201609.26
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It’s Not Really About Deutsche Bank

It is never a good thing when official sources either named or unnamed are quoted in the media as denying bailout discussions. For any bank such rumors and denials are harmful because, obviously, they are a reflection of common perception. Furthermore, most people know all-too-well the true nature of any denials, thus reinforcing only that…

201609.25
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Global Asset Allocation Update

I’ve put off this update as long as I can now, waiting for some clarity, a change in our indicators that might suggest a change to the portfolio. Alas, despite a Fed meeting, a BOJ meeting and a plethora of economic data nothing has moved sufficiently to warrant a change. The risk budget is unchanged…

201609.23
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What Actually Is Transitory

The end of the week finds the initial release of “flash” PMI readings across much of the world. In what will be surprising only to economists and policymakers, the commonality is “slowing.” It is never good to find universal deceleration, of course, but especially so in the second half of 2016. To begin with, whatever…

201609.23
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…And The Treasury Market Is Trying Very Hard To Kill The Legend

As noted earlier today, the bond market is not truly a mystery or middle. In very simple terms that even Alan Greenspan might be able to understand, rising inflation and economic opportunity are reflected in higher interest rates and a steeper yield curve; full stop. The bond market, however, does not possess a crystal ball…

201609.23 0

We Are Stuck In Depression Until The Legend Of The ‘Maestro’ Finally Dies

Alan Greenspan is confused – again. The man who admitted to the world a decade ago he didn’t know much if anything about interest rates is now trying to change that reputation by suggesting yet again interest rates are set to rise. In testimony before Congress in February 2005, the then-Chairman of the Federal Reserve…

201609.22
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Lack of Resale Inventory Further Points To ‘Something’ Changed

The pace of new home sales fell again in August according to the National Association of Realtors. On a seasonally-adjusted annual basis, the rate of resales registered 5.33 million compared to 5.38 million in July and 5.29 million in August 2015. The growth rate on sales has clearly slowed, and the NAR itself finds that…

201609.21
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Like Everything Else, History Repeats (Almost Exactly) Because Power Truly Corrupts

With both the Bank of Japan and Federal Reserve today undertaking policy considerations at the same time, it is useful to highlight the similarities of conditions if not exactly in time. As I wrote this morning, what the Fed is attempting now is very nearly the same as what the Bank of Japan did ten…

201609.21
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Yellen’s Words Are Irrelevant; ‘It’ Is In Her Numbers

There is absolutely no need whatsoever to pay any attention to what Janet Yellen says. There is even less call for parsing the increasingly ridiculous FOMC statement, particularly with regard to inflation where it will continue to suggest “professional forecasters” are the only way (left) to measure monetary policy effectiveness. Instead, four times a year…