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Dealer Behavior Leads Us To Another Big (Collateral) Warning

By |2018-12-20T16:58:54-05:00December 20th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The latest liquidations began right after October 3. Oil shifted toward contango/crash, curves collapsed, even stock markets which looked like they had skated past disruptions early in the year were slammed. It was as if every market hit the same air pocket all at once, therefore identifying (global) liquidity as the major issue driven, of course, by reversing economic and [...]

Contagion

By |2018-10-29T18:42:55-04:00October 29th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The word contagion is easy enough to understand. Whether the spread of disease or disaster, sometimes it is difficult if not impossible to contain. In financial terms, contagion is often thought of along the lines of 2011; Greece started it and it spread throughout the rest of Southern Europe. The euro was coming apart, and what “it” was didn’t seem [...]

One Fragile Year In Review: It Was A Warning

By |2018-09-05T17:46:54-04:00September 5th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One year ago today, something broke. It wasn't a big thing, practically a footnote seemingly not worth mainstream attention. Out of nowhere, the 4-week T-bill yield spiked. On Friday, September 1, 2017, the equivalent interest rate for the instrument was steady at 96 bps. That was already a problem because the Federal Reserve’s RRP was at the time set for [...]

The Money of Metals; More Gold Beyond Repo

By |2018-06-26T17:23:11-04:00June 26th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In all honesty, I do mean to beat this one particular dead horse. In fact, I intend to pulverize it until there is nothing left but the smallest particulate matter. This is everything that is wrong with how things are right now. Either they are willing to put out what could only be legitimately classified as outright propaganda (lies), or [...]

The Money Of Metals; Or, Inferring Collateral Beyond Repo

By |2018-06-26T13:07:36-04:00June 26th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s been a wild month for copper. June began normal enough for the metal, with the front month futures price (HG1) still ~$3.05 where it had traded since early March. Then, out of nowhere, the price surged. Starting June 4, in a matter of days HG1 was just less than $3.30. It was the highest price of the year and [...]

2018 or 2008? IOER, EFF and more Absurd Denial

By |2018-06-11T13:19:23-04:00June 11th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Last week, it was overseas central bankers who stole the show. Many of them particularly in EM locations have had a really rough go of late, and a few in particular wanted the world to pay attention to dollars. Not any dollars, of course, as that would be far too easy. Rather, offshore “dollar” markets have found a few voices. [...]

This Is A Really Strange Development (UPDATED)

By |2018-05-25T12:40:18-04:00May 25th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Last week, I reported on a sharp drop in repo fails for the week of May 9. The decline was so much that FRBNY indicated there were essentially no fails during those five trading sessions. It was way out of line with recent history and opened up little more than wild speculation as to what might have caused it. One [...]

Chart of the Week; On the Contrary

By |2018-05-18T18:36:18-04:00May 18th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It has been far more difficult to pick one Chart of the Week this week. There is so much going on right now, most of it revolving around the possible re-rising of the “dollar.” An unwelcome development, to be sure, but a potentially important one for the intermediate term direction of more than just EM currencies and markets. The global [...]

This Is A Really Strange Development

By |2018-05-17T17:41:55-04:00May 17th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Observing the eurodollar system as I’ve done for so many years, you have to be prepared for curve balls thrown at you. Just when you think you’ve got it clocked (sometimes literally), something changes and it all gets tossed out the window. About a month ago, the Federal Reserve reported a sharp drop of UST’s in custody on behalf of [...]

Globally Synchronized Disappointment

By |2018-05-01T19:16:52-04:00May 1st, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Like so many financial prices, copper’s is tied to both money and economic fundamentals. They call it Dr. Copper for a reason, good as it has been in suggesting ahead of time the direction for the global economy. China is as central for the setting there as well as in “dollars.” During the early days of the “rising dollar” I [...]

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