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OK, NYMEX, Go On…

By |2021-03-18T19:55:52-04:00March 18th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Well, that will get everyone’s attention, at least for now. Should something happen to the crude oil rocketship, there goes inflation. A day after the FOMC releases substantial upward revisions to inflation rates its models now project for this year, the NYMEX pits jump all over them with oil’s worst day since just after last April’s negative price turmoil. Before [...]

FOMC Statement Makes A Statement Without Really Knowing It

By |2021-03-17T18:57:56-04:00March 17th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Oh, the irony. Recall Janet Yellen’s plight, circa early 2015. Oil prices were “unexpectedly” crashing raining on her recovery-like parade. The Federal Reserve, Yellen as its Chairman, was about to embark on an ambitious program of regular every-meeting rate hikes to head off, its models assumed, the coming inflationary bump which was to confirm full if belated monetary policy success. [...]

TIPS Tipping Over, But Not That Way

By |2021-03-04T19:45:37-05:00March 4th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is precedence for this, though not to this extent; it has reached a record. And when it happened before, oil prices were right in the middle of it, too. The 5-year TIPS breakeven rate has surged to equal its highest in a very long time. Considered by many evidence for an inflationary breakout – these are inflation breakevens, after [...]

Hot Oil, Cold Weather, Uncle Sam’s Green

By |2021-02-24T19:24:35-05:00February 24th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For a couple of weeks, the $600 payments from Uncle Sam seemed to have found their way into the tanks of Americans driving their automobiles a little bit more than they had. According to the US Energy Information Administration (EIA), the total amount of gasoline “supplied” by the domestic marketplace reached 8.4 mbpd the second week of February. Like retail [...]

Oil’s Recurrent Re-Curving

By |2021-01-27T17:37:46-05:00January 27th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The post-Pfizer vaccine rush pushed most of the contango out of the WTI futures curve. The aftermath of the Georgia Senate vote, and with it dreams of even larger, more carefree fiscal “stimulus”, drained all the rest. As of this week, the entire crude curve is once more contango-free; backwardation front to back.The physical markets have been able to fundamentally [...]

Inflation, Reflation, Or Something Else?

By |2021-01-04T19:25:12-05:00January 4th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Is there a difference between inflation or reflation, and whatever this is? Not mere semantics, it may be everything for what the future ultimately looks like. Yet, the only one ever talked about is the first, as if a foregone conclusion. Why?We’re conditioned to believe in only one or the other, recession still contracting or otherwise total recovery, on top [...]

Inflation Hysteria #2 (WTI)

By |2020-12-09T17:20:13-05:00December 9th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Sticking with our recent theme, a big part of what Inflation Hysteria #1 (2017-18) also had going for it was loosened restrictions for US oil producers. Seriously. Legacy of the 1970’s experience depending too much on OPEC, subject to embargoes, American oil companies had been prohibited for decades from exporting oil. Not that it would have mattered before 2014, the [...]

Vaccines and Senate Subsidies, Ls and Ks

By |2020-12-02T19:15:41-05:00December 2nd, 2020|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In a sense, it’s being priced like a game of chicken. On the one side, there’s been vaccine-aphoria now combined with this week’s subsidy-mania driving narratives more than markets. Really not all that much higher in prices, certainly not anywhere in the neighborhood of the red-hot temperature of the rhetoric being used to describe these two particular developments. Oil’s up [...]

The Established Slowdown of Today vs. At Least Tomorrow’s Vaccine Is Not The Same ‘Stimulus’

By |2020-11-25T18:25:43-05:00November 25th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The oil market has caught a mild case of the raging disease. Not COVID, rather the purported cure for it. Vaccine-phoria has visited the energy sector and propelled oil prices upward while pulling less contango in the futures curve, awakening this commodity market from its post-August doldrums. It had been that detour in WTI which began to suggest this summer [...]

Bursting A Few Bubbles; No, Not That One

By |2020-11-17T19:18:32-05:00November 17th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Presidential election was supposed to have been a big one. Yields were low, or high, based on how whichever expert or financial media article was interpreting the manner of trading in bond markets. You could take your pick; a “blue wave” was bad, as in BOND ROUT!!! due to inflation and potential for even more (how?) spendthrift ways in [...]

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