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China’s Economy Is Not Crashing, It’s Worse Than That

By |2018-10-19T11:50:19+00:00October 19th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

China’s economy is not crashing. Hyperbole works both ways. Last year and this, the smallest increment above a prior number was broadcast out as the greatest thing ever (US wage growth in particular), irrefutable proof of globally synchronized growth. Now that that’s over with, largely, there will be a tendency toward the other extreme. The [...]

Not A Good Start For China’s Third R

By |2018-10-17T16:39:56+00:00October 17th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

File it under “what were they thinking?” In March 2015, confronted by a severe external monetary squeeze, the PBOC made a truly radical choice. Maybe it was that for a few months anyway things looked a little better. The eurodollar system had practically melted down globally first on October 15, 2014 (collateral) and then in [...]

The Aid of TIC In Sorting Shorts and Shortages

By |2018-10-17T11:58:06+00:00October 17th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Asians are selling their Treasuries again, which can only mean one thing. The mainstream media will offer all sorts of explanations as to why that might be and not a single one will be correct. China and Japan are offloading US$ assets primarily federal government debt for vastly different reasons. Their decisions spring from [...]

The Macro Downgrade Cycle

By |2018-10-09T17:19:18+00:00October 9th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There was an old joke among bond investors that use to say no AAA-rated bond had ever defaulted…because it was downgraded several times first. By the time the issuer was in restructuring, it was junk accredited long before then. It ceased being funny around February 2007. There is something similar and similarly tragic that takes [...]

China Reopens With Another Dollar Warning

By |2018-10-08T19:11:16+00:00October 8th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s one of those useless explanations that while technically true tells us nothing of value about the situation. The Chinese are never boring when coming back from a Golden Week holiday. This weekend was no exception, China’s reopening bringing with it the news of yet another cut in that country’s bank reserve requirement ratio (RRR). [...]

A Few Questions From Today’s BOND ROUT!!!!

By |2018-10-03T19:03:31+00:00October 3rd, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

On April 2, the benchmark 10-year US Treasury yield traded below 2.75%. It had been as high as 2.94% in later February at the tail end of last year’s inflation hysteria. But after the shock of global liquidations in late January and early February, liquidity concerns would override again at least for a short while. [...]

China’s Industrial Dollar

By |2018-10-01T18:32:06+00:00October 1st, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In December 2006, just weeks before the outbreak of “unforeseen” crisis, then-Federal Reserve Chairman Ben Bernanke discussed the breathtaking advance of China’s economy. He was in Beijing for a monetary conference, and the unofficial theme of his speech, as I read it, was “you can do better.” While economic gains were substantial, he said, they [...]

Your Semi-Annual Golden Week Reminder

By |2018-09-25T11:56:06+00:00September 25th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s that time of year. September, the leaves start to turn and the air grows crisp. Autumn smells arrive; the Chinese prepare for their nationalist Golden Week. Ever since 2014 and the dollar’s rise, that is, eurodollar tightening especially in Asia, these holiday bottlenecks are never boring. To be shut down for an entire week [...]