Bill Dudley was a key guy at the Fed for a very long time. It is very important to point this out. Not only did he hold two of the central bank’s most crucial positions, he held them during the institution’s most critical moments. Dudley was Manager of the system’s Open Market Account in August 2007. On the seventh of [...]
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 [...]
Before getting into the why of the dollar’s stubbornly high exchange value in the face of so much “money printing”, we need to first go back and undertake a decent enough review of the guts maybe even the central focus of the global (euro)dollar system. I’ve written before that the repo market is the lender of last resort, not central [...]
While the world is taking the smallest of baby steps in the right direction, mostly it’s been related to the part of the eurodollar system that everyone can see. Not bank reserves and the Fed’s “money printing”, though you can see them and we’re told to obsess about them those things don’t matter. I mean instead the dollar’s exchange value; [...]
There is a tremendous difference between the world de-dollarizing and those living in it being de-dollared. The former is a choice, the latter a fact of existence since August of 2007 (to varying degrees). Yet, most people, especially the “experts”, talk of only the first one as if that was all there is to it.Especially when it comes to China.We [...]
The lack of issuance and supply over the last almost year or so, that’s what makes the TIC data so fascinating. And relevant, if for other reasons, too. CLO issuance, according to a bunch of sources, peaked back last June. Remember that whole “recession scare” with the yield curve last summer? It wasn’t just a scare, at least not in [...]
On March 15, 2013, the US Treasury Department issued a request for a “large position report” (17 CFR Part 420). Any institution holding $2 billion or more of the 2% notes expiring in February 2023 (10-year maturity) had until March 21 to disclose that fact to the Federal Reserve Bank of New York (faxed disclosures accepted). The repo rate for [...]
According to the Federal Reserve’s calculations, the US dollar in Q1 pulled off its best quarter in more than twenty years - though it really didn't need the full quarter to do it. The last time the Fed’s trade-weighed dollar index managed to appreciate farther than the 7.1% it had in the first three months of 2020, the year was [...]
If there’s been one small measure of progress, and a needed one, it has been the mainstream finally pushing commentary into the right category. Back in ’08, during the worst of GFC1 you’d hear it all described as “flight to safety.” That, however, didn’t correctly connote the real nature of what was behind the global economy’s dramatic wreckage. Flight to [...]
People quite often want to know what I have against the Fed’s swaps. To begin with, they are sourced by bank reserves. My co-host partner Emil Kalinowski likes to say these latter are the equivalent of laundromat tokens, an analogy I can at least get behind. They are monetary in appearance but of (extremely) limited use. Maybe a more comprehensive [...]
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