ben bernanke

What, When, Nominal, Forward, Yes, Oil; or, Spreads Everywhere

By |2022-04-11T18:36:12-04:00April 11th, 2022|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

February 2005, Federal Reserve Chairman Alan Greenspan goes before Congress to tell the simple-minded politicians there about his “conundrum.” They and the media eat it up because somehow the guy was declared the “maestro.” Even so, he had a major problem and it was nothing more than LT Treasury yields doing what they do; that is, pricing less growth and [...]

Another One Inverts, The Retching Cat Reaches Treasuries

By |2022-03-14T20:24:11-04:00March 14th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As Alan Greenspan’s rate hikes closed in, longer-term Treasury yields were forced upward as the flattening yield curve left no more room for their blatant defiance. By mid-2005, though, the market wasn’t ready to fully price the downside risks which had already led to that worrisome curve shape (very flat). While all sorts of bad potential could be reasonably surmised, [...]

You Don’t Have To Take My Word For It

By |2022-01-24T20:28:40-05:00January 24th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Stop me if you’ve heard this before. Longtime readers/followers/enthusiasts will be forgiven for immediately thinking I’m quoting myself again, as I so often do: Following its emergence, the eurodollar market played a big role in the Bretton Woods system and also its breakdown and eventual demise in the early 1970s. The primary reason I refer so much to my own [...]

The Hawks Circle Here, The Doves Win There

By |2022-01-21T18:44:35-05:00January 21st, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We’ve been here before, near exactly here. On this side of the Pacific Ocean, in the US particularly the situation was said to be just grand. The economy was responding nicely to QE’s 3 and 4 (yes, there were four of them by that point), Federal Reserve Chairman Ben Bernanke had said in the middle of 2013 it was becoming [...]

As The Fed Tapers: What If More Rapid (published) Wage Increases Are Actually Evidence of *Deflationary* Conditions?

By |2022-01-03T20:16:51-05:00January 3rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Since the Federal Reserve is not in the money business, their recent hawkish shift toward an increasingly anti-inflationary stance is a twisted and convoluted case of subjective interpretation. Inflation is money and if the Fed was a central bank the issue of consumer prices wouldn’t necessarily be simple, it would, however, be much simpler: is there or isn’t there too [...]

The Curve Is Missing Something Big

By |2021-10-19T18:34:46-04:00October 19th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What would it look like if the Treasury market was forced into a cross between 2013 and 2018? I think it might be something like late 2021. Before getting to that, however, we have to get through the business of decoding the yield curve since Economics and the financial media have done such a thorough job of getting it entirely [...]

The Great Eurodollar Famine: The Pendulum of Money Creation Combined With Intermediation

By |2021-10-11T19:37:50-04:00October 11th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It was one of those signals which mattered more than the seemingly trivial details surrounding the affair. The name MF Global doesn’t mean very much these days, but for a time in late 2011 it came to represent outright fear. Some were even declaring it the next “Lehman.” While the “bank” did eventually fail, and the implications of it came [...]

Until This Changes, Forget Inflation: Banks Bought Epic Amounts of Safe, Liquid Assets in H1 ’21

By |2021-10-08T20:39:23-04:00October 8th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The first half of 2021 was inundated with government helicopters, more QE’s, and then CPI’s put up with guarantees the “inflation” was going to continue for a long time. Jamie Dimon, JP Morgan’s often hapless CEO, proudly declared US Treasuries beyond the touch of any 10-foot pole. With the economy on fire, he “reasoned”, who would ever want safe and [...]

Maybe More Autumn Than Strictly August

By |2021-09-27T17:43:36-04:00September 27th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Barely more than two weeks. That’s all was needed for the headlines to scream “bloodbath”, “end of the bull market”, and the always popular BOND ROUT!!! The 10-year Treasury yield had bottomed out in August and by mid-September 2019 this key benchmark rate screamed upward by 43 bps in just seven sessions. Yes, seven. To think, the financial media has [...]

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