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Who Owns/Holds/Funds All This?

By |2016-02-11T18:20:48-05:00February 11th, 2016|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Mainstream commentary will continue to harp on the unemployment rate as if it were some kind of lucky charm for protection against an increasingly unrecognizable and frightening (to the orthodoxy) world around it. That appeal dominates even where it has so little if any bearing, as in negative swap spreads that were in truth an easy and simple warning about [...]

Asian Axis of Junk

By |2016-01-13T18:04:30-05:00January 13th, 2016|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You almost have to marvel at the resilience shown in leveraged loan pricing over the past nearly month. Prior to the Fed’s rate decision on December 16, the leveraged loan market, as with the rest of the junk bubble, was sinking fast and furiously. Since then, however, despite great financial turmoil all over the world, and even in the places [...]

Acceleration

By |2015-12-14T11:47:02-05:00December 14th, 2015|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There isn’t much commentary needed here, as the prices and yields indicate everything relevant and important. I would only add that seeing August 24, October 15 and now the change (in acceleration) in December all add up to something different than the FOMC’s whatever influence. There is no monetary policy reason for the August 24 global liquidations to show up [...]

The Dramatically Shifted Baseline

By |2015-12-07T16:49:42-05:00December 7th, 2015|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Crude oil prices are exhibiting all the signs of an increasingly difficult funding environment. The front end of the futures curve is being bent dramatically in relation to even close maturities just outside the next few months. Such contango is the obvious imprint of finance, though that is not to say that economic expectations are neutral in the curve. Far [...]

‘Dollar’ View of Demand

By |2015-11-24T17:45:16-05:00November 24th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

The New ‘Dollar’ Paradigm

By |2015-11-16T15:47:19-05:00November 16th, 2015|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

Self-Reinforcing

By |2015-11-09T18:29:23-05:00November 9th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

Last week’s survey data around the world was a bit more mixed than anyone would have liked, an obvious statement that yet deserves the emphasis. Europe, for instance, remains mired in a fog of zombie-like “growth” that is notable for both a distinct absence of QE’s promised impact and the related Japan-like steadiness that suggests nothing good about near and [...]

The Quick Burn of Balance Sheet Capacity Is the Recovery’s Mangled End

By |2015-11-06T17:13:40-05:00November 6th, 2015|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

While the stock market had one of its best months in years, it was, like the jobs report, uncorroborated by almost everything else. The junk bond bubble, in particular, stands in sharp and stark refutation of whatever stocks might be incorporating, especially if that might be based upon assumptions of Yellen’s re-found backbone. Do or do not, corporate junk remains [...]

Liquidation Warning; Bottleneck Spotted

By |2015-09-29T18:15:36-04:00September 29th, 2015|Bonds, Commodities, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

The behavior of mortgage REIT’s lately embody a great deal of confusion about what they actually are and what that really represents. The first aspect to understand is that they are not participants in actual real estate, rather more closely aligned as a specialty financial firm akin to a non-registered bank. They make money as banks do (or supposedly they [...]

Where Junk Might Cross The Line

By |2015-09-22T16:07:51-04:00September 22nd, 2015|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As stocks selloff today, so too does the junk bubble. I think the implication traces back to the Asian “dollar” and the unsteady state of wholesale finance in that part of the eurodollar system (while contemplating the potential for mitosis to have occurred there at some point in the recent past, likely 2012). Junk prices not only remain depressed but [...]

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