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banking system

Jamie Dimon (Still) Hates Bonds Because Inflation; Other Banks Apparently Love Bonds Because There’s No Credit To Inflation

By |2021-06-18T16:45:41-04:00June 18th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

JP Morgan’s Jamie Dimon hasn’t produced an enviable track record opining on inflationary potential. He’s forever deeply entrenched in the inflation camp, and because he sits atop the corporate structure of one of the world’s biggest and most well-known banks, it does seem reasonable at first how his opinion on monetary matters is taken very seriously – despite repeatedly missing [...]

Jay Powell’s Bad Cop Routine: Intentionally Pushing Banks Off the SLR ‘Cliff’

By |2021-03-19T17:10:16-04:00March 19th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Federal Reserve has allowed itself an image of a marshmallow when it comes to the banking system it is (one-third) charged with regulating. First and foremost, along with the two other (redundant) triplets, the OCC and FDIC, the US central bank is not a central bank at all; it is near exclusively a domestic bank regulator. And while “macroprudential” [...]

Taking You, The Fed’s Bank Reserves, And Banks’ Checkable Deposits For A Quick Stroll In The Monetary Zoo

By |2020-09-22T18:40:29-04:00September 22nd, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Milton Friedman wasn’t trying to be cagey. Quite the contrary, he was recognizing the complexity of the world we actually inhabit and then stating this in perfectly clear language. Things aren’t so simple as positive versus negative, especially when it comes to moving progress forward – or stopping in its tracks. What if progress merely slows; worse, what if it [...]

Banks Or (euro)Dollars? That Is The (only) Question

By |2020-04-01T17:02:26-04:00April 1st, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It used to be that at each quarter’s end the repo rate would rise often quite far. You may recall the end of 2018, following a wave of global liquidations and curve collapsing when the GC rate (UST) skyrocketed to 5.149%, nearly 300 bps above the RRP “floor.” Chalked up to nothing more than 2a7 or “too many” Treasuries, it [...]

A Repo Deluge…of Necessary Data

By |2019-12-13T17:16:15-05:00December 13th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Just in time for more discussions about repo, the Federal Reserve delivers. Not in terms of the repo market, mind you, despite what you hear bandied about in the financial media the Fed doesn’t actually go there. Its repo operations are more RINO’s – repo in name only. No, what the US central bank actually contributes is more helpful data. [...]

China Doves

By |2019-04-23T12:19:27-04:00April 23rd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A little less than three weeks ago, the overnight unsecured money market rate for Chinese renminbi (RMB), SHIBOR, had fallen sharply to 1.417%. This was among the lowest in history, though it has been happening more frequently since last summer. That sounds like a good thing, only the low rates don’t ever last. Instead, over the next eight market sessions [...]

US Banks Haven’t Behaved Like This Since 2009

By |2018-12-11T17:59:34-05:00December 11th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If there is one thing Ben Bernanke got right, it was this. In 2009 during the worst of the worst monetary crisis in four generations, the Federal Reserve’s Chairman was asked in front of Congress if we all should be worried about zombies. Senator Bob Corker wasn’t talking about the literal undead, rather a scenario much like Japan where the [...]

ECB At A (Familiar) Crossroads

By |2018-08-31T17:05:54-04:00August 31st, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If Brazilian central bankers are the standard for illicit shamelessness, their European counterparts are at least on the same spectrum. At the end of April, the European Central Bank’s President Mario Draghi took his shot at purposeful mischaracterization. Speaking to the press after the ECB’s Governing Council meeting had concluded, Draghi had been forced to concede there had been at [...]

Italy Went Boom A Long Time Ago (and that’s the point)

By |2018-05-21T17:28:12-04:00May 21st, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On June 21, 2017, Italy’s Parliament approved Law #96. The new regulation altered Law #130 of 1999. Pertaining to limitations on the activities of Special Purpose Vehicles (SPV), the 2017 amendment expanded their scope. The intention was clear; SPV’s were going to be used as the primary method of cleaning up Italian banks as a conduit for the country’s mountain [...]

Non-Randomly Surveying RMB

By |2017-03-22T19:51:01-04:00March 22nd, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

China’s central bank, unlike other central banks, is constantly active almost never resting. Because it is always in motion, the PBOC can seem to be “adding” liquidity at the very same time it might be “draining” it. Its specific actions should never be interpreted as standalone procedures related solely to some unknown policy stance. That is particularly true given that [...]

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