201807.03 9

The Dreaded Vote of Confidence

Chinese officials are getting nervous. Everyone knows that whenever your favorite sports team struggles and fans are calling for the head coach’s head, any owner or general manager who then issues the dreaded (from the coach’s perspective) vote of confidence is essentially sealing his fate. PBOC Governor Yi Gang issued a similar sort of statement…

201807.02
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The Deeper Red of JPY and WTI

There are several factors missing from the latest eurodollar rout. Well, not really missing so much as sitting this one out to this point in time. We knew things were really getting serious in 2015 when the Japanese yen joined the currency parade. Only it didn’t fall as others had, JPY rather rose very much…

201806.28
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Already Back In The Red?

In July 2014, then-Federal Reserve Chairman Janet Yellen testified before Congress. It was the usual Humphrey-Hawkins stuff, except in this instance at that particular time there was every reason to suspect things were finally changing. The unemployment rate, in particular, was sinking like a stone dropped in a pond. Some additional economic indicators signaled perhaps…

201806.05 9

It’s A Dollar Double Whammy, Just Not Theirs

First it was inflation. No, it was nuclear war in Korea. Then something about T-bills and government debt. And the ECB tapering while others were, too. Of course, before any of those there was 2a7. There’s always something, it seems, something different every time. Maybe it’s not any of them? Small “e” economics will survive…

201805.02
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The FOMC Should Probably Cry For Argentina

Argentina was perhaps the biggest success story of “reflation.” Left for dead in global markets as the hammer of the “rising dollar” pounded down on everyone, the country elected new leadership and began taking the right steps toward modern economic integration. That’s the story, anyway. What really happened was a bit different. The country that…

201805.01 6

Globally Synchronized Disappointment

Like so many financial prices, copper’s is tied to both money and economic fundamentals. They call it Dr. Copper for a reason, good as it has been in suggesting ahead of time the direction for the global economy. China is as central for the setting there as well as in “dollars.” During the early days…

201805.01
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Is It Over?

The world is full of anomalies. It may seem like a paradox, but financial markets are particularly eventful places. Something happens, some people notice, and most often it goes…nowhere. It’s all the time and a constant part of analysis, trying to identify and separate what is truly contained. The global eurodollar monetary system grew so…

201804.30
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Globally Synchronized Bond Vigilantes

One equal part of inflation hysteria had been that as the US economy recovers and growth accelerates, foreign buyers would flee US Treasuries. The bond market would be hit with a double damning of higher inflation and and substantially reduced overseas purchases. Under such pressure, no way could yields hold under 3% for very long….

201804.23
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The (Official) World Moves A Little Closer To The Eurodollar

The primary reason I focus so much on time is that I believe it is running out. No one possesses a crystal ball, least of all me, and while making such a statement might presume to be intensely negative (doom and gloom) it’s not always that way and it certainly doesn’t have to be. For…

201804.20
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Renewed ‘Reflation’ From A Short-term Dollar Perspective

It’s worth revisiting the topic of the “rising dollar.” What determines its exchange value in the first place? Orthodox convention associates the general direction up or down with interest rate differentials, the infamous global carry trade. Not just any interest rate comps, either, but those of short-term money markets. Thus, if the Federal Reserve is…