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yield curve

Monthly Macro Monitor: Doom & Gloom, Good Grief

By |2019-10-23T15:08:21-04:00October 10th, 2019|Alhambra Research, Markets|

When I first got in this business oh-so-many years ago, my mentor told me that I shouldn't waste my time worrying about the things everyone else was worrying about. As I've related in these missives before, he called those things "well-worried". His point was that once everyone was aware of something it was priced into the market and not worth [...]

Head Faking In The Empty Zoo: Powell Expands The Balance Sheet (Again)

By |2019-10-08T18:56:47-04:00October 8th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

They remain just as confused as Richard Fisher once was. Back in ’13 while QE3 was still relatively young and QE4 (yes, there were four) practically brand new, the former President of the Dallas Fed worried all those bank reserves had amounted to nothing more than a monetary head fake. In 2011, Ben Bernanke had admitted basically the same thing. [...]

Simple Payrolls Right Now, Before Getting To The More Complex Issues

By |2019-09-06T12:41:02-04:00September 6th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Where things stand right now is actually a pretty simple matter. How and why everything might change, as well as how and why we got here, those are more complex issues which depending upon your understanding may not lead to a clear picture of conditions. Right now, we are told, there will be just the one rate cut, maybe a [...]

Just Who Was The Intended Audience For The Rate Cut?

By |2019-09-04T17:26:07-04:00September 4th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Federal Reserve policymakers appear to have grown more confident in their more optimistic assessment of the domestic situation. Since cutting the benchmark federal funds range by 25 bps on July 31, in speeches and in other ways Chairman Jay Powell and his group have taken on a more “hawkish” tilt. This isn’t all the way back to last year’s rate [...]

Monthly Macro Monitor: Market Indicators Review

By |2019-10-23T15:08:22-04:00August 29th, 2019|Alhambra Research, Bonds, Commodities, Currencies, Markets|

This is a companion piece to last week's Monthly Macro report found here. The Treasury market continues to price in lower nominal and real growth. The stress, the urgency, I see in some of these markets is certainly concerning and consistent with what we have seen in the past at the onset of recession. The move in Treasuries is by [...]

Did The BLS Just Find The Landmine? One-Fifth Of Previously Estimated Payroll Gains May Not Have Existed

By |2019-08-22T17:42:01-04:00August 22nd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The entire basis for what the Fed is now calling a “mid-cycle” adjustment rests upon a specific view of the labor market. There was weakness in consumer spending, there remains weakness in business investment, but none of these cross currents or headwinds are going to matter. Americans are experiencing robust employment conditions which when these reassert themselves will cycle the [...]

Monthly Macro Monitor: Does Anyone Not Know About The Yield Curve?

By |2019-10-23T15:08:22-04:00August 21st, 2019|Alhambra Research, Bonds, Markets|

The yield curve's inverted! The yield curve's inverted! That was the news I awoke to last Wednesday on CNBC as the 10 year Treasury note yield dipped below the 2 year yield for the first time since 2007. That's the sign everyone has been waiting for, the definitive recession signal that says get out while the getting is good. And [...]

Denying The Curve? Show Your Work

By |2019-08-16T17:40:51-04:00August 16th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One of the primary reasons Economists go unchallenged is because they’ve made the subject matter dense and complex. Needlessly so, in many cases. Anyone in the financial media or the public who wishes to challenge Jay Powell (well, maybe not Powell) on any economic concept is as likely to get a lecture on regressions and the three or four tests [...]

Why You Should Care Germany More and More Looks Like 2009

By |2019-08-13T13:01:05-04:00August 13th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What if Germany’s economy falls into recession? Unlike, say, Argentina, you can’t so easily dismiss German struggles as an exclusive product of German factors. One of the most orderly and efficient systems in Europe and all the world, when Germany begins to struggle it raises immediate questions about everywhere else. This was the scenario increasingly considered over the second half [...]

All You Really Needed Was the Yield Curve

By |2019-08-12T18:31:20-04:00August 12th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It is absolutely amazing the lengths people will go to in order to deny the most straightforward and obvious explanation; to torture and twist plain evidence. That’s the thing about rationalizing, though. The narrative usually matters more than the facts. Take tax reform and interest rates. The problem with tax reform wasn’t actually tax reform. The Tax Cuts and Jobs [...]

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