2018 or 2008? IOER, EFF and more Absurd Denial

Last week, it was overseas central bankers who stole the show. Many of them particularly in EM locations have had a really rough go of late, and a few in particular wanted the world to pay attention to dollars. Not any dollars, of course, as that would be far too easy. Rather, offshore “dollar” markets…


Is It Over?

The world is full of anomalies. It may seem like a paradox, but financial markets are particularly eventful places. Something happens, some people notice, and most often it goes…nowhere. It’s all the time and a constant part of analysis, trying to identify and separate what is truly contained. The global eurodollar monetary system grew so…


It’s The Track Record That Is Unaccounted-for Risk

No one seems able to account for the rise in LIBOR-OIS. I think it’s a vain effort, and focuses on the wrong segments, but nonetheless there is considerable uncertainty which always casts suspicions into the shadows. That is important.  A few weeks ago, all the big bank analysts were alight with their theories. They couldn’t…


The (Official) World Moves A Little Closer To The Eurodollar

The primary reason I focus so much on time is that I believe it is running out. No one possesses a crystal ball, least of all me, and while making such a statement might presume to be intensely negative (doom and gloom) it’s not always that way and it certainly doesn’t have to be. For…


Renewed ‘Reflation’ From A Short-term Dollar Perspective

It’s worth revisiting the topic of the “rising dollar.” What determines its exchange value in the first place? Orthodox convention associates the general direction up or down with interest rate differentials, the infamous global carry trade. Not just any interest rate comps, either, but those of short-term money markets. Thus, if the Federal Reserve is…

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Hong Kong, China, And The Nightmare of Forex Piles

Very early on in the turn, I mean very early, you could already tell there were substantial problems underneath. By the time CNY started lower, against all expectations, there had already been serious signs of trouble in China for months by then. In that initial seemingly minor drop in early 2014, the PBOC’s actions belied a…

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Completely Full of It

In June 2008, ICAP actually launched a US-based alternative to LIBOR. It ended up as nothing more than one very minor footnote lost in a sea of more pressing problems and events. Still, that they even tried is somewhat significant and relevant to today. Before the whole cheating scandal came out, there were questions surrounding…


What’s In A Spread? Euro$ Futures Have Been Anticipating LIBOR-OIS For Seven Months

Since LIBOR is a hot topic again, though no 2a7 in sight, I thought I’d add one additional perspective that isn’t found in any other analysis. LIBOR is, of course, a money rate applied not to domestic funding but eurodollars on offer in London. The current criticism of the rate stems from the fact that…


The X’s and Y’s Of Jerome Powell & The Long End, As Calculated by Eurodollar Futures

For the end-of-bond-bull-market-crowd, 3% is a line in the sand. There is no inherent significance in that number, except that it’s a round one. The benchmark 10s as of now trade with regard to that level as if it’s a ceiling. That’s what makes it so momentous. In 2013, the yield finally broke 3% the…


A Boom Of Hysteria

It’s always been easy to lose perspective. In the modern social media age, maybe it has become even easier. Conventional wisdom rarely seems to get challenged anymore, particularly given the assignment of “what everybody knows.” Big Data is, for example, predicated on a very good theory, the wisdom of crowds. It hasn’t yet lived up…