Reflation

A Year Later, The Fact Fedwire Is Still There Tells Us Why Markets Have Done What They’ve Done

By |2022-02-23T18:55:59-05:00February 23rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The world seemed to have everything going for it, for once, everything coming up favorable for the first time seemingly in forever. There were vaccines, financial government interventions worldwide just recklessly chucking money at anyone with a pulse, an end to the pandemic even normalcy right in front of us. What could possibly have messed this up?It was around 11:15 [...]

Always The Next Landmine

By |2021-11-12T20:35:09-05:00November 12th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Picking up where we left off from our review of the first series of landmines, including the big one at the end of 2008, the world has been rocked by these things in almost continuous succession. Every couple of years, “everyone” says the world is recovering from the previous “unexpected” shock only to find instead how the global system ends [...]

Until This Changes, Forget Inflation: Banks Bought Epic Amounts of Safe, Liquid Assets in H1 ’21

By |2021-10-08T20:39:23-04:00October 8th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The first half of 2021 was inundated with government helicopters, more QE’s, and then CPI’s put up with guarantees the “inflation” was going to continue for a long time. Jamie Dimon, JP Morgan’s often hapless CEO, proudly declared US Treasuries beyond the touch of any 10-foot pole. With the economy on fire, he “reasoned”, who would ever want safe and [...]

Finally The Taper Tantrum, Or What’s Wrong With August?

By |2021-09-24T17:58:01-04:00September 24th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If you're fortunate to be able to do this long enough, you’re absolutely assured to get caught with your pants down and almost certainly more than once. In the short run, it’s all a crapshoot anyway. Markets fluctuate and never, ever go in a straight line. And just when you claim to be right on top, they yank the rug [...]

Hey Jay, Maybe Check The Swaps Before Committing to Taper

By |2021-09-21T20:11:51-04:00September 21st, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It was said to be something hugely significant, truly momentous - but only until it started to misbehave all over again. This was the summer of 2013, SHIBOR Summer in China and the misunderstood, mislabeled “taper tantrum” in the US$. Consistent with the latter’s more optimistic take on the world, the 30-year swap spread turned positive for the first time [...]

The Eurodollar’s Nose

By |2021-09-08T19:47:16-04:00September 8th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What an intriguingly odd month September 2017 turned out to be. To start with, Reflation #3 only seemed to be gaining strength. The full throat behind Inflation Hysteria #1 was still ahead, as was its related personage the BOND ROUT!!!! And yet, early in that late summer month a sudden eruption; actually several. On September 5, T-bills. A day later [...]

Neither Coincidence Nor Nothing: Fedwire Six Months Later

By |2021-08-24T19:46:09-04:00August 24th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It was one of those little things that really shouldn’t have made any difference whatsoever, an interesting if trivial little nugget left behind for only obsessive scholars to care any about. Late in the morning of February 24, 2021, Fedwire shutdown. The fact a couple hours inactive snowballed into something bigger, we wondered if this would end up being indicative [...]

A TIC Trio of More Serious Deflation Potential: Asset Rebound, Banks Can’t Borrow T-bills From Foreigners, And The China Cringe Which Goes Along

By |2021-08-18T20:41:43-04:00August 18th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Treasury Department’s TIC update for the month of June 2021 was, well, interesting. Not in a good way, either (post-2014, is it ever actually good?) There are just too many nuggets to digest in one sitting, so here I’ll merely go over three major developments: an update to the May 2021 big dollar warning; a big, nasty wince given [...]

Studying, Analyzing Reflation Templates and Their Legs

By |2021-08-04T19:53:37-04:00August 4th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In one sense, we have a template to follow, two potentially, but in another there may not be one this time. I’m talking about reflation and how it plays out specifically in bond yields because these have been among the most reliable indicators. Economists and central bankers unaware of this wealth of information right in front of them, right here [...]

The Contraction Is Over, Which Means The Hard Part Only Begins

By |2021-07-21T19:47:35-04:00July 21st, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Conventional wisdom has said for a long time that a recession is two consecutive quarters of declining output. Where this idea came from, who knows. It’s a shorthand that was put together over time derived from the folks at the NBER. This latter group has claimed the responsibility for being the “official” arbiter of every recession, having become the go-to [...]

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