Bonds

Downturn Is Everywhere

By |2019-03-22T12:47:15-04:00March 22nd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Europe is a total mess, no one can (honestly) argue otherwise. But that’s just Germany and France, right? PMI’s in those countries were a disaster. Those reported for the US weren’t really all that bad. Weaker, sure, hardly the obvious sinking especially when compared to German manufacturers. IHS Markit’s flash US Manufacturing Index for March [...]

Downturn Is Here

By |2019-03-22T12:04:14-04:00March 22nd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Confirmation that it wasn’t a shallow Rhine and emissions regulations. Something big is going on in Europe, Germany first. And if the German economy stumbles, particularly its industrial and manufacturing sector, we can reasonably infer its cause – the entire global economy is suffering. As is standard practice, when weak data began showing up last [...]

Where Doves Are Dreaded

By |2019-03-20T15:59:39-04:00March 20th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If “rate hikes” and QT are the world’s big problem in 2019, then why is the FOMC announcing the end of “rate hikes” and QT failing to have a positive effect? The answer will surprise most people. Central banks, dominated by central bankers who are Economists, meaning statisticians, are always behind. They do not lead. [...]

Chart(s) of the Week: Reviewing Curve Warnings

By |2019-03-15T19:53:37-04:00March 15th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Quick review: stocks hit a bit of a rough patch right during the height of inflation hysteria. At the end of January 2018, just as the US unemployment rate had finally achieved the very center of attention, global markets were rocked by instability. Unexpectedly, of course. Over the next several weeks, share prices sagged and [...]

The Fed Proposes A Repo Facility, QE5

By |2019-03-13T17:51:25-04:00March 13th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

QT. Bank reserves. Balance sheet normalization. They really are going through all the motions in 2019. It’s as if officials can sense something just isn’t quite right. This would amount to a serious setback, of course, having assured the public repeatedly how the financial system has been remade into “resilient.” Janet Yellen, call your current [...]

Decaying Offshore Money Is A Lot More Than An Offshore Decay

By |2019-03-12T18:51:49-04:00March 12th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

During the first quarter of 2008, as Bear Stearns teetered on the edge of illiquidity, foreign holders of US$ financial assets contributed $9.3 trillion to US credit markets. According to the Fed’s Z1, the Financial Accounts of the United States, it tells us that’s the amount they held in possession from outside the American geographical [...]

Curve Crazy Again; Or, The ‘Dovish’ Turn Falls Apart, the Culprit Revealed

By |2019-03-12T16:39:44-04:00March 12th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Everyone went dovish after what happened in December. Convention assumes that central bankers take their cues from the NYSE. I don’t think that’s what shook everyone up, though. Curves, ladies and gentlemen. The bond market revolted and the stock market showed serious signs of catching its contagion. Since the mainstream had been expecting a booming [...]

What Is Missed Inflation

By |2019-03-12T12:34:44-04:00March 12th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As an alternate member of the FOMC, Lorretta Mester has been sounding off on inflation. When the payroll report for the month of August 2018 was released early in September, Mester as President of the Cleveland Fed was widely quoted for her “hawkish” stance. Referencing the highest wage growth in a decade, speaking in Boston [...]

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