Bonds

Never Attribute To Malice What Is Easily Explained By Those Attributing Anything To Term Premiums

By |2019-10-10T18:16:31-04:00October 10th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There will be more opportunities ahead to talk about the not-QE, non-LSAP which as of today still doesn’t have a catchy title. In other words, don’t call it a QE because a QE is an LSAP not an SSAP. The former is a large scale asset purchase plan intended on stimulating the financial system therefore economy. That’s what it intends [...]

From JOLTS Series Shift To Series of Rate Cuts

By |2019-10-09T12:29:58-04:00October 9th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I’ve said all along that they would be dragged into them kicking and screaming. After all, the Federal Reserve undertook its last rate hike in December 2018 – just as the markets were making clear he was completely mistaken in his view of the economy. What followed was the ridiculous “Fed pause” which pretty much everyone outside of the central [...]

The Scientism of Trade Wars

By |2019-10-09T11:06:26-04:00October 9th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One year ago, last October, the IMF published the update to its World Economic Outlook (WEO) for 2018. Like many, the organization began to talk more about trade wars and protectionism. It had become a topic of conversation more than concern. Couched as only downside risks, the IMF still didn’t think the fuss would amount to all that much. Especially [...]

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. [...]

The Consequences Of ‘Transitory’

By |2019-10-07T17:31:17-04:00October 7th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Europe’s QE, as noted this weekend, is off to a very rough start. In the bond market and in inflation expectations, the much-ballyhooed relaunch of “accommodation” is conspicuously absent. There was a minor back up in yields between when the ECB signaled its intentions back in August and the few weeks immediately following the actual announcement. Other than that, and [...]

Why The Japanese Are Suddenly Messing With YCC

By |2019-10-03T19:01:36-04:00October 3rd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

While the world’s attention was fixated on US$ repo for once, the Bank of Japan held a policy meeting and turned in an even more “dovish” performance. Likely the global central bank plan had been to combine the Fed’s second rate cut with what amounted to a simultaneous Japanese pledge for more “stimulus” in October. Both of those followed closely [...]

ISM Spoils The Bond Rout!!! Again

By |2019-10-03T17:59:37-04:00October 3rd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For the second time this week, the ISM managed to burst the bond bear bubble about there being a bond bubble. Who in their right mind would buy especially UST’s at such low yields when the fiscal situation is already a nightmare and becoming more so? Some will even reference falling bid-to-cover ratios which supposedly suggests an increasing dearth of [...]

Multipliers and Elasticity: The Other More Consequential Side of Repo

By |2019-10-02T17:31:25-04:00October 1st, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is increasing skepticism in the mainstream media as to the functions and declarations coming from the Federal Reserve. As a direct consequence of the mid-September repo rumble, for the first maybe ever official opinions and explanations aren’t being taken immediately at face value. That may end up being the lasting legacy of what was otherwise nothing more than a [...]

ISM Spoils The Bond Rout!!!

By |2019-10-01T12:58:23-04:00October 1st, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

With China closed for its National Day Golden Week holiday, the stage was set for Japan to steal the market spotlight. If only briefly. The Bank of Japan announced last night that it had had enough of the JGB curve. The 2s10s very nearly inverted last month and BoJ officials released preliminary plans to steepen it back out. Japan’s central [...]

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