Just a couple of noteworthy prices/developments around the close: 1. Repo rates have come back down, with the GC rates yesterday below IOER for the first time in 16 trading sessions (MBS). Volume in MBS has been quite light recently, with UST volume making up the difference. I can’t see any particular reason for such a marginal shift except the [...]
The perfect payroll report seems to have set off an angry wholesale market. While there was some indication of disorder prior to today, eurodollars in particular were sold once the Establishment Survey made it even more uncomfortable for Yellen’s position. Whereas the eurodollar curve had been unusually stable throughout May, it has been a different story in June. Economy or [...]
We have noted the negative forward rates for gold on several occasions, particularly as they relate to our thesis about gold being used in collateral funding arrangements. The negative forwards have persisted uninterrupted since July 8. That was true for tenors up to three months, with the six-month falling below zero on several occasions now. Six-month GOFO has now been [...]
There is a temptation to compare anything of note in financial markets to the panic of 2008. It is exceedingly easy to do, and considering the scale and scope of everything that went wrong all at the same time it is very likely that Autumn 2008 will remain the benchmark. That does not mean it is the sole measure of [...]
The most common question I receive about gold relates to the means through which an increase in leasing/lending activity is negative for gold prices. It appears that the mechanism by which this is accomplished is unclear and counterintuitive. By all accounts, an increase in the demand for gold as collateral to obtain “cash” should be positive for gold since it [...]
Over the last couple of months I've dedicated a good portion of these weekly commentaries to the various headwinds I see facing the global economy and markets. Everyone, it seems, knows what the risks are and I'm beginning to wonder if, being so well known, the actual events may prove less jarring to sentiment than I've been expecting. There is, [...]
Guest post from friend of Alhambra, Brian Cronin: In 1960, Stanley Kramer made a movie based on the 1925 Scopes trial which dealt with the age-old question of whether man came about by evolution or creation and whether evolution could be taught in Tennessee schools. It starred Spencer Tracy as Henry Drummond and Fredric March as William Harrison Brady. They [...]
And so another year has passed into the history books - the older I get, the faster they seem to go - and investors must again try to position their portfolios for a profitable year. It hasn't been easy to do the last few years and this year promises to be just as challenging. The usual suspects that made last [...]
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