us treasuries

Eurodollar University Collateral; May 29 – We Know Who It Wasn’t

By |2018-09-24T17:16:11+00:00September 24th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

At one time, economics actually cared about eurodollars. Maybe it was because the thing was so new, it was a hot, sexy topic, the kind of strange and unusual deviation from the norm that can grasp someone’s attention and hold it. Perhaps it was the way in which it all began, an entire monetary system [...]

Monetary Hierarchy, Independence, And Shaming Greenspan Yet Again

By |2018-09-21T17:30:01+00:00September 21st, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In June 2003, while discussing the vote that would take the federal funds rate to its then-lowest point, 1%, Alan Greenspan committed what may have been the greatest monetary sin of modern times. The focus for much of the discussion was Japan, that country’s central bank pioneering at that early date all the things the [...]

Brazil Money Math

By |2018-09-19T12:41:14+00:00September 19th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On June 10, 2013, Brazil’s central bank announced an allotment of 40,000 currency swap contracts at auction. This was the second operation carried out in short order that month, following weakness in the real, Brazil’s currency (BRL), against the dollar. In order to forestall any further declines, central bank intervention has long been a frontline [...]

Bond JOLTS Without Wages To Back Just JO

By |2018-09-11T17:46:59+00:00September 11th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In the absence of a booming economy, one has been conjured from a select few employment statistics. The catalog, beginning in 2014, consisted of a rapidly falling unemployment rate, the Establishment Survey which dazzled with headline payroll growth supposedly adding up to the “best jobs market in decades”, and the JOLTS series but curiously omitting [...]

One Fragile Year In Review: It Was A Warning

By |2018-09-05T17:46:54+00:00September 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 [...]

The Price of Mispricing

By |2018-08-22T17:14:50+00:00August 22nd, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The FOMC statement for the July-August 2018 policy meeting exceeded expectations once more. It’s difficult for the Committee to continually do this since the whole point of these things is to downplay all expectations. The goal is to make everything seem boring and uninteresting, if the Federal Reserve is doing its job. But they are [...]

Housing Slump Within A Slump

By |2018-08-22T12:13:28+00:00August 22nd, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

July 2018 was another disappointing month in the housing market. Sales of existing homes, according to the National Association of Realtors (NAR), declined again last month. At a seasonally-adjusted annual rate of 5.34 million, it was the lowest level of resales in two years. Apart from the distortions last year in the aftermath of the [...]

Whose Tightening Is It Anyway?

By |2018-08-21T16:15:14+00:00August 21st, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I suppose it’s only fair. After all, they started it. Earlier in the year, Federal Reserve officials including Chairman Jay Powell suggested it was all Trump’s fault. The abrupt difficulties presented by the dollar were, they said, the result of tax cuts swelling the deficit and thereby threatening capital markets with a “deluge” of Treasury [...]