At the end of June, the crude curve really got out of hand. WTI futures had returned to backwardation many months before, and then the eurodollar/collateral explosion May 29 sapped some crude strength. Over the following month, curve backwardation would become extreme as the benchmark price seemed ready to skyrocket. After getting up near $80 a barrel, the price reversed. [...]
By Jeffrey Snider & Joseph Calhoun Late 2014/early 2015 will perhaps be the closest to a real recovery from the Great “Recession” we shall see in this cycle. Q1 2015 marked the peak year over year growth rate of GDP in this recovery at 3.76%. That rate compares quite unfavorably with even the feeble post dot com crash recovery high [...]
The Bank of Japan shouted down the debt laden economy on Thursday evening in the US. Following Europe’s precedent, they took interest rates on a certain segment of bank assets negative. News flash: Asset prices rise from a small change in investor asset preference, nothing else is expected to change. Where’s this all heading? When doing scenario analysis, I think [...]
Since October 15, gold, yen and Swiss francs have all been pummeled by what increasingly looks like a “dollar” repeat from the start of Q3. It is difficult to suggest whether there is any shift in safe haven bid in all three, but I would guess, as with Q3, it may not have mattered as the “dollar” function globally has [...]
The moment you add the yen to any larger financial discussion it inevitably brings out passionate response. I think that is derived partially from its status as unbelievably durable; if there is one currency in the world that “deserves”, so to speak, ultimate execution it is that of the Japanese. The Bank of Japan has done more than any other [...]
On January 15, the Swiss National Bank suddenly and without warning removed the franc’s peg to the euro. Months later, there is still much confusion as to why they acted, including some of the usual doctrinaire assessments that take no account of wholesale “dollar” reality. In other words, the SNB was explicit on January 15 though nobody apparently listened. The [...]
It will be a few more days before the major banks release their quarterly balance sheet figures for Q2. We already know from their earnings reports that money dealing is no longer much of a high priority for global banks, as it is, quite simply, no longer profitable. Commentary still dwells on that as a matter of Dodd-Frank, Basel III [...]
Given the dramatic inflection in “dollar” behavior surrounding the March 18 FOMC meeting there wasn’t much surprising in the latest TIC figures for that month. If anything was complicated it was due solely to the fact that this change occurred mid-month. For the most part, the heavy “tightening” trend that began anew after January was reset by the end of [...]
If we have learned anything from this period in economic and financial history, it should have been to take great care when using or expecting past correlations as valid. There are innumerable examples where that dynamic shift applies, but it seems especially relevant at the end of April 2015. The amount of space and pixels dedicated to the idea that [...]
I think it is interesting that the TIC data also provides some further confirmation about the Swiss participation in the January 15 version of the “dollar” problem. Of course, that still fits with the supercycle decay of the overall eurodollar standard, and even as one of those asymmetries, but I think it deserves its own emphasis. Again, all caveats about [...]
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