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Reflation

From China: Dollar, Deflation, And The RRRest

By |2021-07-21T16:44:25-04:00July 21st, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s not necessarily a discrepancy so much as maybe looking at the same thing from a different point of view. China’s State Administration of Foreign Exchange (SAFE) reports on, among other things, the widest definition of foreign assets being under its whole national umbrella. Yet, the agency publishes balances denominated not in CNY, either US$’s or SDR’s (hey, they can [...]

Inching Closer To Another Warning, This One From Japan

By |2021-07-19T17:14:52-04:00July 19th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Central bankers nearly everywhere have succumbed to recovery fever. This has been a common occurrence among their cohort ever since the earliest days of the crisis; the first one. Many of them, or their predecessors, since this standard of fantasyland has gone on for so long, had caught the malady as early as 2007 and 2008 when the world was [...]

Anyone Remember That Whole SLR Cliff?

By |2021-07-01T19:12:46-04:00July 1st, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Does anyone remember the SLR “cliff?” Of course you don’t, because in the end it didn’t seem to make any difference. For a few weeks, it was kind of ubiquitous if only in the sense that it was another one of those deep plumbing issues no one seems able to understand (forcing all the “experts” to run to Investopedia in [...]

No Reflation Here: PBOC Balance Sheet Update May (Same As April)

By |2021-06-22T19:03:14-04:00June 22nd, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For the month of May 2021, China’s central bank reported almost exactly the same as it had in April (or March). In the case of foreign assets, as has become standard, nearly identical. Despite reflation dollar flows being described and talked about, they still haven’t reached the official PBOC balance sheet which after so many months of this simply reduces [...]

Curve Shape Shifting, In The Wake of Dots

By |2021-06-18T18:51:41-04:00June 18th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Consumer prices in Japan fell again in May, according to that country’s Ministry of Finance. The headline CPI was 0.1% less last month than it had been in the same month during 2020. Though it was the eighth straight for outright deflation, there was some good news in the core rate, if you could call it that, which flipped to [...]

The FOMC Accidentally Exposes Itself (Reverse Repo-style)

By |2021-06-17T19:10:11-04:00June 17th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Initially, the dots got all the attention. Though these things are beyond hopeless, the media needs them to write up its account of a more fruitful monetary policy outcome because markets continue to discount that entirely. Dots look like inflationary success if possibly even now more likely, whereas yields and especially bills have (re)taken a more skeptical approach pricing almost [...]

The Second Part of the Quantum of Money: Results From The Triparty Repo Experiment

By |2021-06-01T19:47:02-04:00June 1st, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Taking our limited repo example from Part 1 a step further still, in real-world operation a bank might put up any number of securities – including any it might have just that day obtained full title too – to secure financing all at once. Thus, there are groupings of securities over which the bank has varying degrees of control – [...]

Which Reflation Are You?

By |2021-05-26T19:32:45-04:00May 26th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I am very much prone to bludgeoning several long-deceased equines, and given what’s really going on with the Fed's reverse repo (and nearly all commentary unhelpful surrounding it) this gives me yet another chance to really reuse my cudgel on at least two of them. This another opportunity to fixate more upon bank reserves, a forever topic until everyone learns [...]

Well, That Clears Up Nothing

By |2021-04-29T20:14:58-04:00April 29th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Disappointing some, US real GDP managed to come in 6.2% higher in Q1 2021 when compared to Q4 2020. This was slightly less than the “consensus” which had figured around 6.6% growth and then the more optimistic calculations including the Atlanta Fed’s GDPNow tool that had only yesterday pointed to 8% (with some outlier whispers dialing up double-digit gains). Even [...]

Predictive Value In/Of Low Yields

By |2021-04-27T19:15:09-04:00April 27th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The US federal government is the brokest entity the dark side of humankind could have ever conceived. And while that’s certainly the case, it is simultaneously true that our out-of-control politicians have no trouble whatsoever selling this deepening debt to a deflationary marketplace only too willing to snap up whatever is offered as if it was somehow scarce. Count me [...]

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