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interest rates have nowhere to go but up

Treasury Supply & Demand, Interest Rates, It’s All About Other Things

By |2021-01-26T18:14:13-05:00January 26th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On August 1, 2018, the Treasury Department announced that it was introducing the 8-week T-bill. With deficits up and going higher due mostly to December 2017’s Tax Cut and Jobs Act (TCJA), the government was becoming creative in how it would deal with its trickier funding needs. Not only the new bill maturity, note auctions were going to be bumped [...]

Inflation HyZ1teria #2

By |2020-12-14T19:21:56-05:00December 14th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Never attribute to malice that which is adequately explained by stupidity. In our specific case here, never attribute to deviousness what is plainly incompetent Economists. Jamie Dimon, the CEO of JP Morgan, though he works atop one of the world’s biggest banking money dealers he got there by being a trained Economist. To bring this home, in March 2008, just [...]

Why Aren’t Bond Yields Flyin’ Upward? Bidin’ Bond Time Trumps Jay

By |2020-09-30T17:33:38-04:00September 30th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s always something. There’s forever some mystery factor standing in the way. On the topic of inflation, for years it was one “transitory” issue after another. The media, on behalf of the central bankers it holds up as a technocratic ideal, would report these at face value. The more obvious explanation, the argument with all the evidence, just couldn’t be [...]

The Fallen Kings & The Bond Throne of Collateral

By |2020-04-21T18:54:57-04:00April 21st, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is no schadenfreude at times like these, no time to dance on anyone’s grave. Victory laps are a luxury that only central bankers take – always prematurely. The world already coming apart because of GFC1, what comes next with GFC2 and then whatever follows it? Another “bond king” has thrown in the towel. Franklin Templeton’s candidate for the title [...]

Three Quarters of a Trillion In Three Weeks, And Bill Yields Are Down Again

By |2020-04-16T18:48:03-04:00April 16th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Hold all the congratulations. Jay Powell is, with a huge assist from the financial media, trying to pre-empt what comes next by taking a premature victory lap. The Fed isn’t just your central bank it is your friend. The amount of pure propaganda being put out lately is understandable if still disgusting. March was a good month to include [...]

Collateral Shortage > Bond Vigilantism (and it’s not even close)

By |2020-03-23T19:22:36-04:00March 23rd, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Faced with severe economic distress and a global market meltdown, they promised that it would be big. Massive fiscal “stimulus”, however, might come at a price. In the short run it was necessary, according to the orthodox view. When a crisis shows up you don’t worry about how to pay for things. Once all is said and done, the current [...]

TIC Rolling Over Would Mean Other Things Having Rolled Over

By |2019-12-16T19:06:27-05:00December 16th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to the latest TIC estimates from the Treasury Department, foreign governments continued their heavy selling of US Treasuries. During the month of October 2019, the most recent data, the official sector disposed of more than $40 billion of those securities on net. It was the third straight month of substantial declines. Some observers try to link this kind of [...]

All You Really Needed Was the Yield Curve

By |2019-08-12T18:31:20-04:00August 12th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It is absolutely amazing the lengths people will go to in order to deny the most straightforward and obvious explanation; to torture and twist plain evidence. That’s the thing about rationalizing, though. The narrative usually matters more than the facts. Take tax reform and interest rates. The problem with tax reform wasn’t actually tax reform. The Tax Cuts and Jobs [...]

Not A Paradox Nor A Conundrum: TICked at Powell

By |2019-07-17T17:14:56-04:00July 17th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It seems a paradox, at least like it is backwards. The financial media doesn’t help because good editorial standards rely upon the opinions and beliefs of credentialed people who have no idea what they are talking about. If you hold high office in some central bank, we are to assume you are competent about monetary issues. It’s all given a [...]

COT Blue: Nobody Buys a Dead Horse

By |2018-01-02T18:02:57-05:00January 2nd, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

FRBNY’s December 2017 Primary Dealer survey results aren’t yet published, so we will have to wait a few days for the collection of those banks’ economists to tell us what they think their own traders likely won’t do. It’s a mess in that situation, but one as old as the crisis. Nevertheless, Economists for some reason still occupy prime slots [...]

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