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credit market

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. [...]

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 [...]

Z1 Update to Money, Credit, and Thus Economy

By |2017-09-22T13:18:43-04:00September 22nd, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Federal Reserve updated the Financial Accounts of the United States (Z1) yesterday, meaning there is quite a lot of new data for the second quarter of 2017. It also means more than just that update, as each quarterly addition is often accompanied by revisions to past estimates. There were some substantial downward revisions to things like Corporate Net Worth, [...]

Currency Risk That Isn’t About Exchange Values (Eurodollar University)

By |2017-08-28T17:28:03-04:00August 28th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This week the Bureau of Economic Analysis will release updated estimates for Q2 GDP as well as Personal Consumption Expenditures (PCE) and Personal Incomes for July. Accompanying those latter two accounts is the currently preferred inflation standard for the US economy. The PCE Deflator finally hit 2% and in two consecutive months, after revisions, earlier this year. The inability of [...]

Long Run Expectations After So Many Years Of Doubt

By |2016-08-11T18:34:45-04:00August 11th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On Wednesday, October 8, 2008, the FOMC voted for an emergency 50 bps cut in the federal funds rate, bringing it down to 1.50%. The day prior, the Fed announced that it would be buying short-term debt from businesses after suggesting the day before that it would fund up to $300 billion for “bad” assets. The Friday before that, Congress [...]

Rogue Independence

By |2015-11-20T17:08:31-05:00November 20th, 2015|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

By all meaningful measures, credit markets today aren’t any different than they were after the first “dollar” wave crested and subsided. Despite all that has transpired all over the place in 2015, this resiliency is worrisome. No matter how much commentary wishes it to be a comforting tool of monetary policy adjusting into economic salvation, the fact that these indications [...]

Bearish Beneath the Nominal Context

By |2015-08-06T12:08:01-04:00August 6th, 2015|Bonds, Economy, Federal Reserve/Monetary Policy, Markets|

The broad survey in funding terms suggests that funding markets have been more disturbed in the past few weeks than broader credit markets. That isn’t to say that credit is unaffected, only the degree is in argument. The treasury curve has renewed its flattening tempo and nominal rates are somewhat leaning in the lower direction. The difference may simply be [...]

More QE Non-neutrality

By |2015-07-29T16:35:24-04:00July 29th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

The simple narrative about QE is drawn from what is believed a simple process. The central bank buys bonds and by doing so it is simply assumed to be an “extra” bid on bond prices; therefore interest rates fall in whatever issue is being targeted by QE. Even in the US, QE has had trouble with that simple relationship. Instead [...]

As The Herd Turds

By |2015-06-02T16:01:20-04:00June 2nd, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

The main thing about “tail events” is how unconventional they can be, a tautology that somehow is necessary. When taking account of financial risks in 2015 it is almost convention that there are bubbles, with rather unnerving complacency about it all. That suggests in some ways the whole idea of bubbles has changed since the first one under eurodollars showed [...]

Relevant Decomposing Spreads of Spreads

By |2015-04-27T17:34:20-04:00April 27th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

This post is actually a companion to the last, looking into the discrepancy of breakevens with the broader credit market, but I felt it deserved attention all its own. As noted in that prior discussion, there is little indication that credit markets are at all re-evaluating prospects for “inflation” and recovery. If anything, they remain curiously stubborn against it even if [...]

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