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currency crisis

Standard Textbook Dollar, Or Eurodollar Standard?

By |2021-03-08T20:06:11-05:00March 8th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s standard textbook stuff. Convention has it that “capital flows” are determined by the portfolio effects of interest rate differentials. Quite simply, if yields aren’t very high for low risk US instruments (like UST’s) or their European counterparts, fixed income managers must go hunting for yields overseas in Emerging Markets who offer fatter returns by comparison. Thus, “capital” is said [...]

Chart of the Week; On the Contrary

By |2018-05-18T18:36:18-04:00May 18th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It has been far more difficult to pick one Chart of the Week this week. There is so much going on right now, most of it revolving around the possible re-rising of the “dollar.” An unwelcome development, to be sure, but a potentially important one for the intermediate term direction of more than just EM currencies and markets. The global [...]

Switzerland ‘Fights’ The Russian Problem, But Russia’s Problem Is As Brazil

By |2014-12-18T12:27:15-05:00December 18th, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Indonesia has been here before, playing a key role in fomenting the Asian “flu” in 1997 and 1998. As it turned out, the slide in the rupiah last year, caught up in the taper drama of US “dollar” tightening, was just the initial phase of what looks to be shaping up as a protracted “dollar” problem. It never gets treated [...]

The Corruption of QE: Destabilizing India & Brazil

By |2013-08-21T14:01:48-04:00August 21st, 2013|Markets|

The Reserve Bank of India (RBI) was back in action yesterday, this time promising monetary measures in search of stability not just for the rupee but for collapsing bond and stock markets. “Markets have fallen despite steps taken by the government and the Reserve Bank to support the beaten-down bond market. The RBI relaxed rules on mandatory bond holdings for [...]

The Business End of The Dollar Problem

By |2013-08-15T11:19:47-04:00August 15th, 2013|Markets|

US and European markets have lazily ignored what is taking place in locales far and wide. This is not some strain of investor xenophobia, but rather the comfort created by the Federal Reserve and ECB’s twin policies of courting complacency. Through QE/OMT and their attendant processes, hedging and the appeal of hedging have been quashed as “tail risks” have receded [...]

Brazil Central Bank to Defcon 4

By |2013-07-02T14:23:13-04:00July 2nd, 2013|Currencies, Federal Reserve/Monetary Policy, Markets|

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 [...]

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