Bonds

Mispriced Delusion

By |2018-12-31T13:34:41+00:00December 31st, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Recency bias is one thing. Back in late 2006/early 2007 when the eurodollar futures curve inverted, for example, it was a textbook case of mass delusion. All the schoolbooks and Economics classes had said that it couldn’t happen; not that it wasn’t likely, it wasn’t even a possibility. A full-scale financial meltdown was at the [...]

Yields Falling, Who Could Be Buying Without QE’s?

By |2018-12-28T17:42:56+00:00December 28th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In the US Treasury market, the situation has been a little different. The BOND ROUT!!! theory posits that without the Fed to buy up additional supply, yields as a technical factor have to rise putting more upward pressure on rates than already exists from a booming economy. Add to that foreign selling in 2018, it [...]

Chart of the Week: The Dreaded Full Frown

By |2018-12-28T15:44:44+00:00December 28th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I’m going to break my personal convention and use the bulk of the colors in the eurodollar futures spectrum, not just the single EDM’s (June) contained within each. The current front month is January 2019, and its quoted price as I write this is 97.2475. The EDH (March) 2019 contract trades at 97.29 currently and [...]

Uh Oh; In A Month Of Big Warnings, The Biggest Yet

By |2018-12-28T12:16:50+00:00December 28th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

All better now. It’s a Christmas miracle, the plunge erased by market closure as if FDR had just been re-elected and taken the oath. The Dow is on everyone’s mind, so trading on December 26 has understandably stuck. Stocks posted their best day in nearly a decade on Wednesday, with the Dow Jones Industrial Average [...]

Wasting the Middle: Obsessing Over Exits

By |2018-12-26T17:07:58+00:00December 26th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What was the difference between Bear Stearns and Lehman Brothers? Well, for one thing Lehman’s failure wasn’t a singular event. In the heady days of September 2008, authorities working for any number of initialism agencies were busy trying to put out fires seemingly everywhere. Lehman had to compete with an AIG as well as a [...]

Dealer Behavior Leads Us To Another Big (Collateral) Warning

By |2018-12-20T16:58:54+00:00December 20th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The latest liquidations began right after October 3. Oil shifted toward contango/crash, curves collapsed, even stock markets which looked like they had skated past disruptions early in the year were slammed. It was as if every market hit the same air pocket all at once, therefore identifying (global) liquidity as the major issue driven, of [...]