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 [...]
Following up on what I wrote earlier, there were no Lehman’s or anything like it during March 2020. Does that mean there hadn’t been a crisis? According to some, yes. If you were talking specifically about a bank crisis, then, of course, that would be true. There was no bank crisis last month. It would be hard, however, to claim [...]
Is it over? That’s the question everyone is asking about both major crises, the answer is more obvious for only the one. As it pertains to the pandemic, no, it is not. Still the early stages. The other crisis, the global dollar run? Not looking like it, either. Stocks rebounded because of “major helicopter stimulus” or because that’s just what [...]
It is Tuesday which only means that whatever oil trading takes place today will be easily overwhelmed by whatever interpretation about inventory levels released tomorrow dominates. However, the last week has been interesting in the respect of a shift in the behavior of the futures curve for WTI. Up until then, almost all volatility was concentrated in the front months, [...]
The rock of the Swiss banking position was its still-heavy relationship with the global “dollar”, a proportion of funding that diminished only somewhat post-crisis. The hard place was the euro, whereby pegging the franc to it meant the SNB was balancing euro problems with banking disproportion. It seemed like a good bet, for orthodox monetarists, in September 2011 because they [...]
In contrast to the franc, the Danish krone continues to ignore ongoing speculation. The latest has seen rumors of not just direct buying by Danmarks Nationalbank but now even full-blown capital controls. Before yesterday, the krone had traded at or near 7.444 to the euro for 20 consecutive trading days; now surging today. In other words, the Danes don’t have [...]
The Danish central bank, Danmarks Nationalbank, reduced its deposit rate floor by 15 bps to -0.5%. In what looks like a preemptive move aimed at potential destabilization ahead, so far they have managed to keep the krone from following in the franc’s destructiveness (short run). I think it is more than credibility at this point, after all the Swiss National [...]
Recognizing the danger of being understated, Swiss markets are a disaster. The overnight rate at -4% handily beats out the periodic specialness in US$ repo which settles at the penalty rate of “only” -3%. The 10-year bond rate is -.257%; the 15-year at -.083%. The Swiss stock index fell more than 14% in the two days after January 14, and [...]
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. [...]
Back at the end of August, it was becoming clear that there was a growing sense of maybe not distrust but far less blind faith emanating from credit markets all over the world. Without a single epicenter it has been far more difficult to simply side step all economic permutations as singularly important, rather the culmination of increasing worry is [...]
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