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Some Next Steps To Watch For Scarce Collateral

By |2021-09-24T19:39:43-04:00September 24th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It gets even more interesting in the bill market, not that anything here has been unexpected. And since this is the same week as Evergrande, still no hint of spillover and tightening, at least not beyond what has become typical.That means mostly on the supply side. Treasury Secretary Yellen is losing breathing room fast, meaning she’s forced to dig further [...]

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 [...]

What’s Zambia Got To Do With It (everything)

By |2020-10-01T19:35:12-04:00September 30th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As one of Africa’s largest copper producers, it seemed like a no-brainer. Financial firms across the Western world, pension funds from the US or banks in Europe, they lined up for a bit of additional yield. This was 2012, still global recovery on the horizon – at least that’s what “they” all kept saying. Zambia did what everyone does, the [...]

Brief Summary Of Where Things Stand Getting Closer to Q4

By |2020-09-24T20:25:50-04:00September 24th, 2020|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Flash PMI’s for September 2020 around the world add more evidence to the possibility of a global slowdown during the economy’s all-important rebound quarter. Q2 was the big downturn, and so it always going to be Q3 where the bounce back would be sharpest. While that has definitely been the case, concerns are mounting for what might follow in Q4. [...]

If Dollar Is Fixed By Jay’s Flood, Why So Many TIC-ked At Corporates in July?

By |2020-09-18T19:55:09-04:00September 18th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When the eurodollar system worked, or at least appeared to, not only did the overflow of real effective (if virtual and confusing) currency “weaken” the US dollar’s exchange value, its enormous excess showed up as more and more foreign holdings of US$ assets. Mostly US Treasuries, especially in official hands, but not entirely those. That much is perfectly clear; you [...]

Swap Mean

By |2020-06-26T19:28:37-04:00June 26th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Little noticed at the time, October 2012 was quite the roller coaster. Most anyone cared about was QE3, the wonderful, awesome flood of liquidity kindly wise-man Chairman Bernanke had restarted for reasons that didn’t seem so important. Did it matter to the public that the repo market went haywire late in that very same month, at the very same time [...]

The Fallen Kings & The Bond Throne of Collateral

By |2020-04-21T18:54:57-04:00April 21st, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is no schadenfreude at times like these, no time to dance on anyone’s grave. Victory laps are a luxury that only central bankers take – always prematurely. The world already coming apart because of GFC1, what comes next with GFC2 and then whatever follows it? Another “bond king” has thrown in the towel. Franklin Templeton’s candidate for the title [...]

Let Japan Show You Again Just How Laughable The Idea That Central Banks Can Support Markets

By |2020-04-17T19:20:25-04:00April 17th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On March 2, the Bank of Japan leapt into the stock market, Haruhiko Kuroda burnishing his Superman cape as he flew in to rescue the Nikkei. Purchasing a record amount of ETF’s that day, shares in Tokyo surged. It was a clear message, or so everyone thought. Don’t fight the Fed nor the Bank of Japan, not when they can [...]

Collateral Shortage Goes Global, Hinting At The Way The (euro)Dollar Reaches Its Eventual End

By |2020-03-25T18:56:44-04:00March 25th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Government securities have become so scarce that it is driving down repo rates. A collateral shortage that has become so acute, money dealers won’t part with their stock of government securities no matter what the price. Stop me if you’ve heard this before. Except, we’re talking about Japan and JGB’s here rather than UST’s. The trick is that both types [...]

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