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2011 crisis

FX, Repo, And Another ‘Strong’ Labor Market

By |2020-01-23T19:12:22-05:00January 23rd, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Between the summer of 2011 and February 2012, the unemployment rate experienced its largest half-year drop since the huge recovery that had been taking place in 1984. It was a very welcome sign that the US economy may have avoided becoming entangled in the global funding messes of 2011. Caught flat-footed, as always, Ben Bernanke’s Fed had ended QE2 at [...]

Not Exactly Paradox, Reflation In Oil Deflation In Copper

By |2018-07-11T16:49:36-04:00July 11th, 2018|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The PBOC really needn’t have conducted the last few of its RRR raises. By the time they were in the books, Chinese inflation was already well underway toward being tamed. Though their CPI wouldn’t register for a few more months still, peaking in July 2011, commodities had already turned decidedly downward. Copper went first, hitting its high on Valentine’s Day. [...]

Maybe A Bit More Complex Still?

By |2017-04-25T19:23:19-04:00April 25th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One of the defining characteristics of the 2011 crisis was dollar swaps. Almost all attention was paid to PIIGS and focus on the European banks holding their debt, as well as the very real possibility that all would break up the euro. Behind all that was the same dollar troubles as in 2008, and for the very same reasons. The [...]

How We Got Here: Ignoring Even The Mathematics of Ideology When It Becomes Uncomfortable

By |2017-04-11T12:27:54-04:00April 11th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On July 20, 2007, the much discussed slow-walk implementation of the Basel II framework was finally taking its form. The Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, and the Federal Reserve Board of Governors, all government agencies dealing in bank supervisory powers, issued a joint statement that day announcing an [...]

How We Got Here: The Mathematics of Ideology, Not Science

By |2017-04-10T18:53:20-04:00April 10th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You may or may not know much about forward guidance, but it has been of constant attention on the minds of policymakers. Further, policymakers themselves don’t seem to be able to define it, and because of it they can’t seem to solve the bond market puzzle. In orthodox economics, forward guidance is either “Delphic” or “Odyssean.” As usual, there is [...]

Review 2011: Stop Focusing On The Downside Because We Lived It Anyway

By |2017-01-31T13:30:20-05:00January 31st, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As a practical policy matter, monetary neutrality almost forces all official considerations to the downside. If you believe that money cannot alter the baseline for the economy, then the only time to consider the upside is where it is clearly “overheating.” In addition to placing inordinate importance on determining trend, in the aftermath of the Great “Recession” it has meant [...]

The Bond Market Riddle Is Not A Riddle

By |2016-07-21T19:12:10-04:00July 21st, 2016|Bonds, Economy, Federal Reserve/Monetary Policy, Markets|

In January 2011, FRBNY began surveying primary dealers in order to try to gain a better understanding of how normalizing policy after two large (in their terms) programs of quantitative easing might affect money and bond markets. The banks were asked a series of questions, an array that has evolved over time, mostly about expectations for the future track of [...]

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