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leveraged loans

I Told You It *Wasn’t* Money Printing; How The Fed Helped Cause, But Can’t Solve, Our Current ‘Inflation’

By |2022-04-19T17:38:29-04:00April 19th, 2022|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Trust the Fed. Ha! It’s one thing for money dealers to look upon Jay Powell’s stash of bank reserves with remarkable disdain, more immediately damning when effects of the same liquidity premiums in the real economy create serious frictions leaving the entire world exposed to the consequences. When all is said and done, the Federal Reserve has created its own [...]

Now You Can’t Spell C-C-A-R Without C-L-O

By |2020-02-10T17:32:21-05:00February 10th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Everyone who lived through the Global Financial Crisis (GFC) remembers the Emergency Economic Stabilization Act of 2008, if not the name itself. The law had authorized TARP (among other things). It was passed during the messiest part of the panic, being signed into law on October 3, 2008. You can always tell what is not going to happen by whatever [...]

Now This Is Decoupling

By |2018-12-21T17:31:13-05:00December 21st, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

They didn’t make a big deal out of it, tucked away in an attached note to the last FOMC statement was a second “technical adjustment.” The Fed says it wants to raise rates but not like this. IOER was moved another 5 bps lower within the approved policy range (now 2.25% to 2.50%, federal funds). The reason they gave: Setting [...]

Contours of Crunch

By |2018-12-10T19:02:50-05:00December 10th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There are several points of confluence between financial markets and the real economy. Asset price volatility can produce negative effects on confidence, of course, forcing economic agents to reconsider their own business activities. More than that, in the gigantic bond market, in particular, a turn in pricing regimes is often accompanied by the dreaded credit crunch. That’s when it starts [...]

Repeating Spreads

By |2018-11-26T13:02:33-05:00November 26th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What a difference a year makes. As 2017 finished up, the Federal Reserve was widely seen as turning “hawkish.” Inflation in the US, many believed, was about to be unleashed by a blistering labor market so tight we’ve not seen anything like it in decades. The central bank would be forced into a quickened pace of “rate hikes” attempting to [...]

A Slight Hint Of A 2011 Feel

By |2018-06-07T18:53:54-04:00June 7th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Whenever a big bank is rumored to be in unexpected merger talks, that’s always a good sign, right? The name Deutsche Bank keeps popping up as it has for several years now, this is merely representative of what’s wrong inside of a global system that can’t ever get fixed. In this one case, we have a couple of perpetuated conventional [...]

Is Anyone Really Surprised DB’s Problems Had Nothing To Do With The DoJ Fine?

By |2018-05-31T17:03:13-04:00May 31st, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You need only go back a little less than two years for an example. In later 2016, Deutsche Bank was a huge problem everyone was discussing if only because they couldn’t avoid it. Despite “reflation” then gripping much of the world, the German institution stood out for all the wrong reasons. Those were easily dismissed as nothing other than an [...]

Chart of the Week; Deconstructing and Applying BRL

By |2017-11-17T18:29:06-05:00November 17th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Last week’s Chart of the Week kicks off this week’s, though it will have to wait for a series of explanations to get us from that one to this. A week ago, we noted the growing divergence between leveraged loan prices and WTI, two risk indicators that used to be pretty well correlated for obvious reasons. The S&P/LSTA Leveraged Loan [...]

Broad Market Calibrations: Nowhere Near Good

By |2017-11-13T19:20:40-05:00November 13th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In later 2014, the Bank of Russia began to repo out eurodollars to local Russian banks. These financial institutions were being increasingly deprived of “dollar” funding on global markets. It made sense that Russia’s central bank would step in on their behalf, redistributing what it could out of its own pocket (though exactly which one was never made clear) to [...]

Chart of the Week: Another Compelling Note of Caution

By |2017-11-10T19:09:19-05:00November 10th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Leveraged loan prices and WTI tracked each other pretty well during the "rising dollar", unsurprising given that the oil sector was over-represented in most new deals as the one truly booming part of the domestic US economy.  That was the case on the rebound, too, where leveraged loan prices rose at the same time oil prices did.  And then both [...]

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