201708.15
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Can’t Forget About Dealers

When the Federal Reserve was founded in 1913, there was no role for it in the marketing and selling of government debt. This wasn’t an oversight on the part of Congress. For more than two years before the Fed, the Treasury Department hadn’t issued any marketable instruments at all. In those days it just didn’t…

201708.11
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JPY Joins EDM; End of Week Chart Dump

Brexit, Trump’s election, even the Bank of Japan rumored to be thinking helicopter. Last year was the year of thinking differently and therein was hope. No matter how many times some markets and especially media blindly accepted the “stimulus” or “recovery” judgments of economists over the years, by 2016 and the near-recession globally that accompanied…

201708.04
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Almost Ten Years And Still Nits To Pick

The economy was sailing along into its Hollywood sunset in 2014 before it was rudely interrupted by the “rising dollar.” At first, the mainstream narrative was that a higher dollar exchange was a good thing, an indication that global markets were embracing the economic revival; or, if you didn’t quite want to get that optimistic,…

201612.29
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RHINO

This is a repost; originally published Dec. 22, 2016. The federal funds rate target is essentially nothing more than a communication tool. You don’t have to take my word for it, the same conclusion has been reached at the level of the FOMC itself. There was, in fact, some debate, though limited in scope, in…

201611.30
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Rising Dollar = Dollar Shortage = Global Liquidity Shortage

Before October 1997, what would become known as the Asian flu was just another opportunity for the mainstream to dismiss what many people, including many prominent, competent people, had been warning about for years before. The usual refrain thrown back at them was some form of “you are missing out.” People, of course, never really…

201609.29
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More Deutsche Bank Attention Means Even Less ‘Dollars’

It seems as if Deutsche Bank is on everyone’s mind, even if nobody knows exactly why. Stocks were down today which is really unremarkable but has become so by the standards of just this year where nothing bad is supposed to be able to intrude. That aside, the news from Germany was quite unnerving. Bloomberg…

201609.27
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A (Significant) Tale Of Two Banks

On August 31, 2008, Germany’s Commerzbank announced that it was purchasing ailing rival Dresdner Bank from Allianz SE. As usual, however, the deal wasn’t described in those terms as nothing ever is so honest in public. Then-Allianz CEO Michael Diekmann said at the time of the announcement: As a strong bank, the new company can…

201609.26
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The Dollar Perspective Matters

Perhaps the hardest part of analyzing the eurodollar system is synchronizing all its various dimensions into a common perspective. Coming from the traditional standpoint that views all these various parts as if they are all separate, such a task is often quite difficult. For example, the repo market is almost always described from the cash…

201609.26
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Why It’s Not Really About Deutsche: Overwhelming Evidence of ‘Something’ In ‘Dollars’

For quite some time now I have been writing (constantly) about “something” going in “dollar” markets and funding markets all over the world. Chinese markets related to “dollars” have been the most prominent in their disorder, but there is a degree of causation that runs from eurodollars to China and perhaps back again. In other…

201607.26
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The Official Face of the ‘Rising Dollar’, Written Officially As Farce

Last July, the US Treasury Department finally issued its official report detailing its account of what happened on October 15, 2014. The statement was co-authored by staff at the Board of Governors of the Federal Reserve System, FRBNY, the SEC, and CFTC, as if the government were going overboard trying to prove its word the…