Federal Reserve/Monetary Policy

Eurodollar University: Part 2, Swaps First

By |2019-04-12T17:22:02-04:00April 12th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We’ve seen this all before. Three times. When things started to look better in the Spring of 2015, for example, “better” was more so a term of art. Another way of saying green shoots is “not as bad” or “no longer accelerating to the downside.” These have very different connotations and therefore to make an [...]

Eurodollar University: Part 1, Not Green Shoots, Shadow Prices

By |2019-04-12T17:08:59-04:00April 12th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It is, if you haven’t noticed, that time of year again. 'Tis the season for green shoots. In the Northern Hemisphere, winter gives way to spring. The flowers start to bloom and humans living here are naturally optimistic for the change of seasons. There is a reason how for ages this time of year has [...]

Labor Slowdown Already; Another Account Falls In Line of May 29

By |2019-04-11T16:41:00-04:00April 11th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

May 29. May 29. May 29. It keeps showing up everywhere. Not only does it appear as an inflection on so many important market charts, we keep finding it in economic accounts, too. There is so much to corroborate what can only have been a real and striking event. This contrasts, of course, with the [...]

The Long Running Circus of Uncertainty Circles Back

By |2019-04-10T16:37:28-04:00April 10th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Most of the best circuses used to have three main rings. Nowadays, we can only get the occasional show for two on the same day. It is a rare treat when central bankers from two major jurisdictions compete for the world’s misapprehending attention. Today is one of those days: Mario Draghi and the ECB as [...]

Inflation Is (Still) Not About Consumer Prices

By |2019-04-10T12:42:33-04:00April 10th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

To most people, this inflation business seems pretty silly. There are those who argue that any inflation index whether the CPI, PCE Deflator or some other approach yet to be devised can accurately capture the concept. And they are absolutely right to question the enterprise. Most people feel inflation in the things they do most; [...]

Why 2011

By |2019-04-09T18:09:06-04:00April 9th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The eurodollar era saw not one but two credit bubbles. The first has been studied to death, though almost always getting it wrong. The Great Financial Crisis has been laid at the doorstep of subprime, a bunch of greedy Wall Street bankers insufficiently regulated to have not known any better. That was just a symptom [...]

IMF Cancels Globally Synchronized Growth, Confirms The Worst Case

By |2019-04-09T13:04:30-04:00April 9th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The IMF becomes the latest mainstream organization to abandon the recovery. It wasn’t really much of one to begin with, mostly just the hope that an uptick in growth would lead to the long sought, and necessary, completion. Globally synchronized growth in 2017 was supposed to mean a plausible pathway toward it. The IMF’s World [...]

The Forced Exile Of Bond Vigilantes

By |2019-04-08T15:40:25-04:00April 8th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Japan is the very model of fiscal irresponsibility. If ever there was a bond vigilante, surely they would have a Japanese address. At the end of what was the Bank of Japan’s 133rd fiscal year, on March 31, 2018, Japan’s central bank reported total assets of ¥528,285,679,854,140. Of which, ¥448,326,107,324,120 was Japanese government bonds (JGB). [...]

‘Bond Trading’ Exodus, The Global Economy’s Q4 Landmine

By |2019-04-05T17:52:26-04:00April 5th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It isn’t just US or European banks which are shrinking. The nature of this post-August 9, 2007, world is just that – global. Sure, there are regulations which have made investment banking more expensive. But there isn’t a rule or law that Wall Street (really Lombard Street) wouldn’t “discover” a way to circumvent it if [...]