The Fed’s control over money markets has always been tenuous, a myth more than anything, it just wasn’t so obvious at one time. That observation extends to its grasp of even basic operations, a spectacular fail revealed by its 2000’s treatment of the Discount Window. On January 9, 2003, the FOMC altered decades of monetary history by switching the Discount [...]
The ongoing money market adjustment remains ongoing; perhaps that tautology is the most that can be interpreted from continuing mixed signals to this point though the longer nonconformities continue the more innocence is threatened. Recognizing again that this is still early in the process, there are some indications that resistance is real and even understandable. That begins first with the [...]
If the junk bond bubble was this week’s most visible inducement toward illiquidity, there have been more than enough indications that might corroborate and explain. With a few more days trading, the huge jump in BofAML’s CCC junk index rate has been confirmed – with another albeit smaller surge again yesterday. At now 16.74%, that is significantly above the prior [...]
If China is struggling with the various facets of the interconnected nature of eurodollar function, then we don’t have to go far to see that in almost perfect clarity. By many accounts, funding and liquidity remain highly disturbed and becoming more uniformly so. From gold to francs to copper to junk debt, pricing reflects more so a combined economic and [...]
By all meaningful measures, credit markets today aren’t any different than they were after the first “dollar” wave crested and subsided. Despite all that has transpired all over the place in 2015, this resiliency is worrisome. No matter how much commentary wishes it to be a comforting tool of monetary policy adjusting into economic salvation, the fact that these indications [...]
Following up from yesterday’s nod toward monetary policy irrationality, the “relevant” markets today continue to profess their concurrence with it all categorized in that manner. I’m not just critiquing the readings of economists at the Fed and their conditional responses, I’m stating unequivocally that the entire affair, and all in it, has been reduced to pure farce. That starts squarely [...]
To say that the “dollar” is a mess to begin the week is to state the obvious. The condition left at Friday’s close has persisted, with commodities and such being sold heavily from the outset. Japan’s renewed “recession” (I use quotes only in the conventional sense, given that the Japanese economy never truly left) hasn’t helped in that regard, but [...]
Copper prices closed yesterday at a new low just barely above the intraday low of August 24. In early trading today, the front maturity has blown past that point and traded as low as $2.164, and currently around $2.175 for another multi-year low. Crude prices are down sharply as well, though the trend in oil isn’t nearly as clear – [...]
You couldn’t really call it a calming effect, as rates never truly settled down rather simply becoming less obviously meddlesome. At the September FOMC, the “dovish” sentiment that was apparently received brought LIBOR rates off their devastatingly devilish perch that had been building from all the way back in early July. As if it needed to be restated, that surge [...]
It has certainly been much calmer in October so far, especially compared with the deep deviations following the FOMC’s lack of activity. Stocks have rallied since October 1 along with many commodities, especially crude. Currencies have been almost mellow, with the ruble following oil prices upward, the real departing (for now) from its devastation and even those like the Indian [...]
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