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Can’t Blame COVID For This One

By |2022-06-01T20:16:42-04:00June 1st, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Late in March 2021, then-German Chancellor Angela Merkel announced a reverse. Several weeks before that time, Merkel’s federal government had reached an agreement with the various states to begin opening the country back up, easing more modest restrictions to move daily life closer to normal. But with case counts sharply rising once more, the whole thing was going to get [...]

T-bills Targeted Target

By |2022-05-19T20:00:57-04:00May 19th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Yesterday’s market “volatility” spilled (way) over into this morning’s trading. It ended up being a very striking example, perhaps the clearest and most alarming yet, of a scramble for collateral. The 4-week T-bill, well, the chart speaks for itself:During past scrambles, such as those last year, they didn’t look like this. They would hit, stick around for an hour, maybe [...]

Shipping Around Retail ‘Inflation’

By |2022-05-17T20:11:05-04:00May 17th, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This whole “inflation” scenario isn’t really that difficult to piece together, effect from cause. Sure, Jay Powell’s trying to nuke it by hiking the federal funds rate, but no one really uses fed funds and the problem isn’t the unsecured cost of borrowing bank reserves (not money) that are literally overflowing. For one, the FOMC’s efforts aren’t going to get [...]

Synchronized Not Coronavirus

By |2022-05-17T17:55:34-04:00May 17th, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is an understandable tendency to just write off this weekend’s disastrous Chinese data as nothing more than pandemic politics. After all, it has been Emperor Xi’s harsh lockdowns spreading like wildfire across China rather than any disease (why it has been this way, that’s another Mao-tter). Open the cities back up, as many are doing right now, the world [...]

All The Dead Horses, And All Powell’s Men, Can’t Make Sense of Europe – Again

By |2022-05-05T20:27:17-04:00May 5th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As a preface to this update ostensibly on Europe, it’s all really about Euro$ #5 sadly rounding into form. In this first part, I’m going to have resurrect the quotation marks surrounding the term “rate hikes”, or bring back RHINO (rate hikes in name only) given what’s going on in Treasury bills.Not rate hikes, or enough of them. Our dead [...]

Shanghai’s Current Plight Began in 2017

By |2022-04-18T20:46:36-04:00April 18th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The first chapters to China’s new story now playing out in Shanghai were written down in October 2017. Planning for them had begun years earlier, their author Xi Jinping requiring more research before committing them to paper. Communist authorities there had grown increasingly concerned about the lack of growth potential for its political system by then utterly dependent for a [...]

Not Good Goods

By |2022-04-18T17:56:44-04:00April 18th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The goods economy in the United States is – maybe was - the lone economic bright spot. That in and of itself should’ve provoked more caution, instead there was the red-hot recovery to sell under the cover of supply shock pricing changes. The sheer spending on goods, and how they arrived, each unabashedly artificial from the get-go.Combine those two factors, [...]

Speaking Volumes Rather Than Fast Rate Hikes

By |2022-04-08T17:39:41-04:00April 8th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The price illusion. It is causing enormous confusion and difficulty, making the global economy out to be something it really isn’t. In fact, the whole situation is being viewed backward. What’s presumed from this is a red-hot economy causing consumer prices to skyrocket. In such a scenario, central banks might need to rush their rate hikes to cool it down [...]

Weekly Market Pulse: The Cure For High Prices

By |2022-03-28T07:45:44-04:00March 27th, 2022|Alhambra Portfolios, Bonds, Commodities, Currencies, Economy, Markets, Real Estate, Stocks|

There's an old Wall Street maxim that the cure for high commodity prices is high commodity prices. As prices rise, two things will generally limit the scope of the increase. Demand will wane as consumers just use less or find substitutes. Supply will also increase as the companies that extract these raw materials open new mines, grow more crops, or [...]

Not Born Yesterday

By |2022-03-17T20:35:45-04:00March 17th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When even Bloomberg can’t help but notice, not just notice but then write about it, that’s significant. Normally a staunch water carrier for the official Federal Reserve position, these curves getting bent so far out of what would be better shapes aren’t so easy to just dismiss and ignore any longer. Jay Powell says household and business finances are holding [...]

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