I’m not much for writing, so I’m sure nothing of a song-writer. While that may be the case, what I do know is that two of the missing lines in our Twelve Warnings of Deflation carol would belong to JGB’s and oil. How to fit them in, someone else would have to do so; the number we’d associate for JGB [...]
Federal Reserve Chairman Jay Powell rarely gives media interviews. Most of his interaction with journalists takes place in the carefully controlled – and credentialed – environment of post-meeting press conferences. One notable exception was last May when the Fed’s head guy visiting with 60 Minutes so that he could, pardon the expression, lie his ass off. Today, March 25, 2021, [...]
Is it a building case of/for selling the news? Another substantial down day in the oil market brings the total slide to just more than 13% (since March 5). Hardly anything earth-shaking on its own, not with the WTI front month futures contract gaining an impressive 85% since the end of October. During those four and a half months, the [...]
The debate over the shape of the recovery, "V" or "L", which might emerge following the dislocation and global contraction. What clues can we find? 1. Domestic Data clues (The Two Easiest Dots Anyone Will Ever Have To Connect) "Deprive any animal of oxygen and watch how it doesn’t move very fast." How the labor force changed [...]
Despite the name, the Fed doesn’t actually intervene in the US$ repo market. I know they called them overnight repo operations, but that’s only because they mimic repo transactions not because the central bank is conducting them in that specific place. What really happened was FRBNY allotting bank reserves (in exchange for UST, MBS, and agency collateral) only to the [...]
Watching the crude oil market over the past few months has been a study in winding a rubber band, or a game of chicken. Each week it has been largely the same thing repeated: oil prices gently rise, backwardation in the futures curve keeps deepening, Money Managers in the futures market bet on higher oil, Dealers bet even more against [...]
There is a titanic struggle going on right now in the oil market. On the one side of the futures market are the usual pace setters, the money managers. Last week, the latest COT data available, they went the most net long since March. If it continues, it will close in on the most positive futures position since the record [...]
Oil prices have had a very good run for several months now. Dating back to the recent low reached June 21, WTI is up an impressive 35% to a new two-year high. Crude hasn’t traded at $57 since June 2015. During this latest increase, the oil futures curve has finally achieved backwardation (which isn’t necessarily permanent). The long-awaited normalization is [...]
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