As we move past all the calendar effects pressed to the front of each year, some trends are starting to come into view. Not only are there trends but a few round numbers, even. The Chinese monetary system is one that is predicated on “dollars”; not all in dollar-denominated assets, but the type of foreign reserves that are consistent with [...]
What was it that touched off CNY’s devaluation in the first place? When it started, “unexpectedly” of course, it was described as intentional policy designed to thwart speculators betting too heavily on the currency’s continued rise. But the first major move in the chess game between the PBOC and “whatever” it is driving the currency was to widen the daily [...]
As world “leaders” gathered in Davos in January 2016, they did so among financial turmoil that was creating more economic havoc than at any time since the Great “Recession.” Having seen especially US QE as the equivalent of money printing, their focus was drawn elsewhere to at least attempt an explanation for the contradiction. They initially settled on the Fed’s [...]
Since the ECB began the Public Sector Purchase Program (QE) in the middle of March 2015, it has purchased (through the end of November 2016) almost €1.2 trillion in securities from the financial sector. In addition to that, the central bank has bought €46.2 billion in corporate bonds, and €148 billion of covered bonds in a third iteration in that [...]
Rumors persisted in China of new foreign currency restrictions from state authorities now trying to crack down on corporate activity. The story was picked up in many news outlets all over the world, but will remain unconfirmed as it is based on reports from the South China Morning Post and others inside the country that have only claimed to have [...]
Before October 1997, what would become known as the Asian flu was just another opportunity for the mainstream to dismiss what many people, including many prominent, competent people, had been warning about for years before. The usual refrain thrown back at them was some form of “you are missing out.” People, of course, never really learn from these episodes because [...]
That the repo market, as noted yesterday, has been beset by a persistent collateral shortage is relatively uncontroversial. Where once large blocks of MBS tranches were central to interbank flow and funding, their absence is still a fact of operation though that repudiation was a very long time ago. Even with that backdrop, however, it doesn’t explain a whole lot [...]
There are many facets to gold, which is as it should be. In trying to discern what ones are moving prices at any given moment, the complexities and really its duality can cloud the matter, often greatly. From the post-1971 traditional perspective, it is believed the preeminent inflation hedge. In financial terms, it is sensitive to shifts in relative interest [...]
According to the TIC estimates, more than half a trillion in UST’s have been perhaps liquidated from foreign official holdings since October 2014. More than half of that total has taken place just in 2016 alone in the eight months through August. And, of course, in that time UST nominal rates have only fallen and sharply so, contradicting the nightmare [...]
If I was forced to guess what it was that specifically set off this “something” of growing “dollar” illiquidity since July, I would have to go back to the July 28 and 29 BoJ policy meeting. Initially, that was the decision that so disappointed at least against the backdrop of expectations of maybe the “helicopter.” But while the mainstream saw [...]
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