One year ago today, something broke. It wasn't a big thing, practically a footnote seemingly not worth mainstream attention. Out of nowhere, the 4-week T-bill yield spiked. On Friday, September 1, 2017, the equivalent interest rate for the instrument was steady at 96 bps. That was already a problem because the Federal Reserve’s RRP was at the time set for [...]
Brazil is another one of those topics which doesn’t seem to merit much scrutiny apart from morbid curiosity. Like swap spreads or Japanese bank currency redistribution tendencies, it is sometimes hard to see the connection for US-based or just generically DM investors. Unless you set out to buy an emerging market ETF heavily weighted in the direction of South America, [...]
During the global end of the Great Recession, Brazilian GDP contracted year-over-year in just three quarters. The worst was about -2.5% in Q1 2009, but by Q1 2010 GDP was rising 9% again. With the latest update today, Brazil’s GDP declined by just less than 6% year-over-year in Q4, representing the seventh consecutive contraction that doesn’t look to be ending [...]
Looking through all the various indications of the “dollar” world, there is seemingly to this moment a great deal of calm. This is in sharp contrast to December where bearishness and tightening were not just evident but dangerously so (across almost every part of the global financial system). But those two observations are not necessarily expected in sequence, as typically [...]
Quarterly results from IBM are watched because they serve as a proxy for business spending across the globe. Capex in the modern world often takes the form of technology/computer investments. In fact, productivity growth in the past three decades has been driven, at the margins, by corporate investments in digital technology. Ever since late last year, IBM has been keeping [...]
Our thoughts on the BRICs as they navigate some difficult circumstances have been focused on the efforts of central banks. The more desperate the measures they employ to “defend” their currencies, the more trouble exists and the greater the potential for further “tail risk”. That includes major imbalances spilling into seemingly unrelated markets. Last week, the Banco Central do Brasil [...]
Stay In Touch