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primary dealers

Yield Curve Inversion Was/Is Absolutely All About Collateral

By |2022-04-15T01:49:20-04:00April 14th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If there was a compelling collateral case for bending the Treasury yield curve toward inversion beginning last October, what follows is the update for the twist itself. As collateral scarcity became shortage then a pretty substantial run, that was the very moment yield curve flattening became inverted.Just like October, you can actually see it all unfold.According to the latest FRBNY [...]

Last Year Wasn’t The Year of Inflation, It Consistently Set Up This Year For Inflationary Fail

By |2022-03-01T18:43:27-05:00March 1st, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The most common explanation for UST repo fails is that short sellers become an imbalance in the market for Treasuries. Convinced (isn’t everyone?) interest rates have nowhere to go but up and these instruments are doomed, therefore ripe to profit from the destruction, short selling sharks supposedly swoop in. Since they’ve borrowed UST’s they don’t own, the herd is susceptible [...]

Fails Swarms Are Just One Part

By |2019-12-04T16:31:02-05:00December 4th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There it was sticking out like a sore thumb right in the middle of what should have been the glory year. Everything seemed to be going just right for once, success so close you could almost feel it. Well, “they” could. The year was 2014 and the unemployment rate in the US was tumbling, the result of the “best jobs [...]

ISM Spoils The Bond Rout!!! Again

By |2019-10-03T17:59:37-04:00October 3rd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For the second time this week, the ISM managed to burst the bond bear bubble about there being a bond bubble. Who in their right mind would buy especially UST’s at such low yields when the fiscal situation is already a nightmare and becoming more so? Some will even reference falling bid-to-cover ratios which supposedly suggests an increasing dearth of [...]

Big Things: The Hoard Gets Bigger

By |2019-02-08T18:25:26-05:00February 8th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I’ve observed a lot that’s purely absurd the last eleven years, trying hard to write up as much of it as I can. It's worth the effort in terms of education but also to reveal what's really going on. The catalog is too long to republish here in its entirety. One of the most ridiculous anecdotes, however, was pieced together [...]

Dealer Behavior Leads Us To Another Big (Collateral) Warning

By |2018-12-20T16:58:54-05:00December 20th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The latest liquidations began right after October 3. Oil shifted toward contango/crash, curves collapsed, even stock markets which looked like they had skated past disruptions early in the year were slammed. It was as if every market hit the same air pocket all at once, therefore identifying (global) liquidity as the major issue driven, of course, by reversing economic and [...]

Anticipating How Welcome This Second Deluge Will Be

By |2018-08-28T16:36:39-04:00August 28th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Effective federal funds (EFF) was 1.92% again yesterday. That’s now eight in a row just 3 bps underneath the “technically adjusted” IOER. If indeed the FOMC has to make another one to this tortured tool we know already who will be blamed for it. The Treasury Department announced yesterday that it will be auctioning off $65 billion in 4-week bills [...]

Is It Over?

By |2018-05-01T17:10:13-04:00May 1st, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

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 far and so fast in [...]

Bonds vs. Economists; The Means to the End

By |2017-12-11T16:52:31-05:00December 11th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As part of its effort to stress its own self-importance, the Federal Reserve conducts a survey of the Primary Dealer members through its New York branch. A written questionnaire is sent out to each bank in advance of every monetary policy meeting. The purpose is for monetary policymakers to make sure that there aren’t any big surprises, that the market, [...]

Three Years Ago QE, Last Year It Was China, Now It’s Taxes

By |2017-12-04T18:57:43-05:00December 4th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

China’s National Bureau of Statistics reported last week that the official manufacturing PMI for that country rose from 51.6 in October to 51.8 in November. Since “analysts” were expecting 51.4 (Reuters poll of Economists) it was taken as a positive sign. The same was largely true for the official non-manufacturing PMI, rising like its counterpart here from 54.3 the month [...]

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