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bank balance sheet capacity

Why 2014? Less (Big) Banks, Fewer ‘Dollars’, No Growth

By |2020-01-15T17:22:55-05:00January 15th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One of the biggest reasons why I always find the regulations explanation(s) so lacking is because of what is the biggest part of the scientific process. The excuses for problems in global liquidity and the dollar-based banking system in general have run the gamut of regulatory exercises. Who can forget, for one example, 2a7? That was 2016’s preferred explanation for [...]

From TIC’s Big March Number Right To Powell’s Future Rate Cut(s)

By |2019-05-16T17:38:39-04:00May 16th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Perhaps it shouldn’t come as a surprise. After all, during the first quarter of this year several key banks announced they had had enough. Goldman Sachs, Nomura, Credit Suisse, as well as others, they all broadcast cuts to key operations. The FICC stuff, or bond trading to put it euphemistically. The very place the world actually gets dollars. Only, they [...]

Genesungshysterie

By |2018-04-09T17:35:55-04:00April 9th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Early in the morning on October 7, 2016, during Asian trading the British pound experienced a flash crash. Driven down 6.1% in a matter of two minutes, it left the rest of the markets stunned. The usual whispers of a “fat finger” abounded, as did the recognition of how unabated computer traded sell orders were quickly offered and executed. Just [...]

Was January A More Complete Dollar Inflection?

By |2018-03-19T17:51:35-04:00March 19th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Friday, January 26, stocks hit their last record highs. Buoyed by supposedly strong earnings along with near euphoria about tax reform anecdotes, all three major US indices were sitting at their respective tops after another big week. Everything was apparently going in the right direction: All the three key U.S. indexes closed at record levels on Friday following better-than-expected earnings [...]

The Only Thing That Matters (Europe)

By |2018-02-28T11:34:43-05:00February 28th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Effective June 10, 2014, the European Central Bank cut the interest rate it paid on its deposit account to less than zero. That instrument in forming the floor for what is a money market corridor in European policy, it was the world’s first major NIRP experiment. Europe’s economy had by GDP been growing again for three straight quarters by then [...]

A Rough Sketch For Hong Kong, China, Maybe A Lot More

By |2018-02-16T18:44:24-05:00February 16th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What we know about what’s going on in Hong Kong is limited. That’s a real shame because I have no doubt what has been transpiring is important for a lot more than Hong Kong and the short run. The connections are too obvious for it to run any other way. I’ve been asked several times to diagram or further explain [...]

Escalation(s) TIC

By |2018-02-16T12:25:48-05:00February 16th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to the US Treasury Department’s Treasury International Capital (TIC) report, foreign private holders of UST’s had been selling them steadily in the last quarter of last year. Estimates including those just released for December 2017 show a total net reduction of $24 billion. While that’s not a huge number, private overseas interests typically buy more than they sell in [...]

What’s Missing In Europe Is What’s Missing Everywhere

By |2018-01-05T18:06:05-05:00January 5th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

American central bankers and economists aren’t alone in their Phillips Curve nightmare. They are joined by others practically everywhere else around the world. In Europe, for example, the unemployment rate there continues to fall while inflation keeps on misbehaving in its meandering. Unlike the US, however, the Europeans don’t have the luxury of burying millions of prospective workers in other [...]

A Derivatives Look At What Happened To ‘Reflation’

By |2017-10-18T16:14:18-04:00October 18th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Office of the Comptroller of the Currency (OCC) reports that total gross notional derivatives contracts owned and outstanding by domestic banks rose for the second straight quarter. The OCC statistics are one quarter behind, meaning that though banks themselves are reporting Q3 numbers with earnings all figures shown here are from the official compilation for Q2. As such, the [...]

The Eurodollar Equation Begins With The Imagination Variable

By |2017-09-21T17:43:52-04:00September 21st, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There wasn’t a whole lot that made sense about iron ore’s price surge through August. In the flipside of what is believed also to be moving copper, Chinese authorities have made it plain that they will take pollution control seriously this winter. For copper, that likely means shutting down mine production, tightening supplies, and could therefore be price positive, perhaps [...]

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