With survey after survey showing Americans are now firmly more concerned about the economy than the pandemic, the narrative reassurance program will be even more in demand than ever. The latest Axios-Ipsos poll suggests nine out of ten US citizens are today worried about economic disaster. To counter the growing angst, Treasury Secretary Mnuchin declared over the weekend that his [...]
There is no schadenfreude at times like these, no time to dance on anyone’s grave. Victory laps are a luxury that only central bankers take – always prematurely. The world already coming apart because of GFC1, what comes next with GFC2 and then whatever follows it? Another “bond king” has thrown in the towel. Franklin Templeton’s candidate for the title [...]
It seemed like an odd, counterintuitive market reaction to what was total chaos. First the news of Lehman Brothers followed closely by AIG, panic gripped every corner of the global marketplace. Toward late September 2008, the stock market would meltdown (the main part of GFC1 that most people associate with the term) in a wave of liquidations due to a [...]
On March 2, the Bank of Japan leapt into the stock market, Haruhiko Kuroda burnishing his Superman cape as he flew in to rescue the Nikkei. Purchasing a record amount of ETF’s that day, shares in Tokyo surged. It was a clear message, or so everyone thought. Don’t fight the Fed nor the Bank of Japan, not when they can [...]
Hold all the congratulations. Jay Powell is, with a huge assist from the financial media, trying to pre-empt what comes next by taking a premature victory lap. The Fed isn’t just your central bank it is your friend. The amount of pure propaganda being put out lately is understandable if still disgusting. March was a good month to include [...]
Way to go, fellas. The FOMC minutes for the crucial March 2020 meeting further make a mockery of everything the central bank should stand for. Nowadays, the Federal Reserve is thought about in terms of its inflation and employment mandates. Nothing whatsoever to do with the monetary system, at least not directly. That’s the way they want it; officials can’t [...]
On Sunday, Argentina’s government announced it was postponing payment on any domestically-issued debt instruments denominated in foreign currencies. That means dollars, just not Eurobonds. At least not yet. In response, ratings agencies such as Fitch declared the maneuver a distressed debt exchange.In other words, technically a default.Though this move was expected, still you have to appreciate the sensitivity. Argentina may [...]
Gross FIMA misconduct. Jay says, not my problem! Fire the man. Immediately.
I would write something snarky about bank reserves, but why bother at this point? It's already been said. If Jay Powell doesn't mention collateral, no one else does even though it's the whole ballgame right now. Note: FRBNY's updated figures shown below are for last week.
Government securities have become so scarce that it is driving down repo rates. A collateral shortage that has become so acute, money dealers won’t part with their stock of government securities no matter what the price. Stop me if you’ve heard this before. Except, we’re talking about Japan and JGB’s here rather than UST’s. The trick is that both types [...]
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