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federal reserve

…At The Beginning

By |2015-02-18T16:39:34-05:00February 18th, 2015|Bonds, Economy, Federal Reserve/Monetary Policy, Markets|

It was a bit of a shock in June 2014 when the repo market experienced sudden and sharp disorder. The surge in fails seemingly did not fit the conditions as convention held them in the middle of last year when everything was supposedly running so smoothly. In the eight months since then, repo fails have not much calmed, which has [...]

Apartments Still Declining

By |2015-01-21T15:58:25-05:00January 21st, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

The latest figures on housing construction have almost flipped the circumstances from late 2013. It was apartment construction that kept up hope that any retrenchment in single family construction would not be so devastating. Permit and start activity was, at the margins, almost totally dependent on multi-family construction to offset weakness in single homes. As of December 2014, the flattening [...]

Gold Does Seem To Suggest A Different Degree Of At Least Uncertainty

By |2015-01-20T19:21:17-05:00January 20th, 2015|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The main problem with looking at the financial world from a “dollar” funding perspective is that there really is no such monolithic existence. The funding conditions in Russia may be very different than those of Swiss banks; they also may be far too similar. Given the impossibility of direct observation, being left outside and searching for interior clues that bubble [...]

It Does Appear Bank-Driven

By |2015-01-20T18:12:48-05:00January 20th, 2015|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The major categories provided within the TIC estimates are a breakdown between private “flows” and those from official sources, such as foreign government and central bank accounts (as much as is known). In terms of those larger segments, there wasn’t really much of note in the update for November. There is some indication that foreign central banks might have become [...]

The New Financial Standards

By |2015-01-16T16:46:40-05:00January 16th, 2015|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It seems everyone was short the franc (CHF) as a matter of taking monetarism at face value. In other words, it amounted to believing the central party line about the economy and normalcy despite the fact that markets have been increasingly pessimistic about it all and actively and aggressively betting against it. Goldman Sachs is just one of many: In [...]

Another Credit Marker

By |2015-01-16T11:54:32-05:00January 16th, 2015|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The FOMC continues to posture as if the economy is good enough to allow the first “tightening” in policy since Alan Greenspan. If we have learned anything from the era of shadow finance and the global eurodollar standard, it is that in these unsettled times the true “money supply” of bank balance sheet mechanics behaves of its own accord. In [...]

Credit Doesn’t Care At All What the FOMC Says

By |2014-12-19T15:26:51-05:00December 19th, 2014|Bonds, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

The stock market takes off in holiday celebration of the FOMC being even less clear than it really has been in some time; perhaps going all the way back to Alan Greenspan’s intentional mush. Equity “investors” are happy that the Fed may be happy about the economy, even though there is nothing in actual markets (outside of stocks) to suggest [...]

No ‘Dollar’ Resolution

By |2014-12-15T18:35:26-05:00December 15th, 2014|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The growing sense of an economic cliff is based on three major factors, all of them in massive markets as opposed to manipulated and ill-suited statistics. The most obvious are oil prices and the UST curve (and related curve mechanics) as they have turned to prices and shapes not seen since the worst of the last crisis. The third, “dollar” [...]

Go Back To Living The Lie

By |2014-12-15T16:47:00-05:00December 15th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

Commentary has not been able to ignore changes in the Fed’s balance sheet mechanics with all the potential systemic shifts occurring as QE ends and the FOMC contemplates going even further. As I said last week, the total balance of bank “reserves” declined but not due to anything other than an operational test of the Fed’s Term Deposit Facility (TDF). [...]

Global Credit Markets Have Proclaimed An End To The Recovery

By |2014-12-12T18:14:26-05:00December 12th, 2014|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

The amount of credit market fireworks this week is only surpassed by those of October 15. Everywhere you look, credit markets are not just growing bearish but, as I said earlier in the week, bearish in comparison with past crisis periods. The past few days have surpassed even that observation, making credit now a fast-moving indicator of still nothing good. [...]

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