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Escalation(s) TIC

By |2018-02-16T12:25:48-05:00February 16th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to the US Treasury Department’s Treasury International Capital (TIC) report, foreign private holders of UST’s had been selling them steadily in the last quarter of last year. Estimates including those just released for December 2017 show a total net reduction of $24 billion. While that’s not a huge number, private overseas interests typically buy more than they sell in [...]

Fortress TIC

By |2018-01-17T18:31:12-05:00January 17th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Goldman Sachs reported FICC revenues of just $1 billion in Q4 2017. That was the lowest for the Wall Street firm, technically a bank, since it converted from properly a securities business to one during the worst of 2008. That was 50% less in “bond trading” than Goldman had produced during Q4 2016. You start to get the sense that [...]

China Doesn’t Want UST’s? I’ve Heard That Somewhere Before

By |2018-01-10T17:48:52-05:00January 10th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For quite a long time I obsessed over November 20, 2013. It was a day that for the vast majority of humanity was like any other, nothing too far out of normal and certainly nothing that would seem to mark it for remembrance. But in my realm of yield curves and interest rate swaps, the things that tell us a [...]

TIC Points To ‘Dollar’ Redistribution As Much As Possible Supply

By |2017-12-18T12:59:25-05:00December 18th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We ended last week with a clear sign that global “dollars” are in (escalating) shortage. I would write “again” with that sentence but there is every indication that said shortage never really ended. It’s not like last year’s “reflation” was a switch from insufficient supply to sufficient, rather it was a relative change to a degree that isn’t easily established [...]

Just When You’ve Thought You’ve Seen It All

By |2017-12-04T17:18:07-05:00December 4th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

I could understand it if its track record was spotty, or partially mixed. But the level of denial runs deep and wide with the yield curve. There is a growing chorus of nonsense, really, which is attempting to spin the flattening as some kind of benign technical rotation that through illogical convolution equals the opposite of what is obvious. Let’s [...]

A TIC Look At Qualitative Contraction

By |2017-11-17T12:37:54-05:00November 17th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The latest update of the Treasury Department’s Treasury International Capital (TIC) estimates clarified a few things. To begin with, for the month of September the Chinese sold UST’s again for the first time in seven months. Between the end of January and the end of August, the Chinese had added $149.4 billion in UST holdings. In September, however, the balance [...]

Synchronized Global Not Quite Growth

By |2017-11-03T18:08:54-04:00November 3rd, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Going back to 2014, it was common for whenever whatever economic data point disappointed that whomever optimistic economist or policymaker would overrule it by pointing to “global growth.” It was the equivalent of shutting down an uncomfortable debate with ad hominem attacks. You can’t falsify “global growth” because you can’t really define what it is. Japan was common then among the [...]

TIC For August (China’s Belgian Hong Kong Dollars)

By |2017-10-23T18:08:58-04:00October 23rd, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Chinese have been on a UST buying spree of late, having announced to the world several months into it that they were intent on keeping it going. The idea in publicly endorsing and really highlighting their official activity was as a currency policy – to stabilize CNY against its highly disruptive tendency toward devaluation (which isn’t really devaluation). How [...]

TIC For August (Background)

By |2017-10-23T18:09:31-04:00October 23rd, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Treasury International Capital (TIC) report produced somewhat of an anomaly in its update for August 2017. There was a lot going on during that month, mostly as UST yields fell (even though interest rates have nowhere to go but up, supposedly) while CNY continued its blistering ascent. As to the latter, it was quite clear by then Chinese actions [...]

Swimming The ‘Dollar’ Current (And Getting Nowhere)

By |2017-09-19T12:29:47-04:00September 19th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The People’s Bank of China reported this week that its holdings of foreign assets fell slightly again in August 2017. Down about RMB 21 billion, almost identical to the RMB 22 billion decline in July, the pace of forex withdrawals is clearly much preferable to what China’s central bank experienced (intentionally or not) late last year at ten and even [...]

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