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deflation

What’s The Consensus Kenneth?

By |2023-06-25T15:11:36-04:00June 24th, 2023|Alhambra Research, Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Taxes/Fiscal Policy|

I spend a lot of time thinking about what "everyone" else believes about the economy and markets. If you've been reading my weekly scribblings for any time, you know I have little faith in the soothsayers of this industry. No one knows what the future holds, least of all that group of crystal ball gazers known as economic forecasters. Most [...]

Globally Synchronized Last October, Not Some Far-Distant Future Risk

By |2022-06-14T20:23:23-04:00June 14th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Rate hikes weren’t even a twinkle in Chairman Powell’s eye, not really. Taper was barely on the table at that time, let alone double-taper or today’s rush into QT. Back in October, they all (correctly) still used the word transitory, therefore officials were taking their sweet time winding down QE6.With the Fed barely evolving from full-on – so it couldn’t [...]

A Volcker Pan Recession

By |2022-06-08T20:37:01-04:00June 8th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Volcker Myth is simple because there isn’t math for it just voodoo economics (to borrow George HW Bush’s phrase). In theory, the FOMC finally realized after more than a decade of currency devastation and its economic, financial, and social consequences, hey, inflation and money. Once Paul Volcker took over in ’79, he acted on the belated realization, seeking to [...]

Hong Kong Stocks Pivot Euro$ #5

By |2022-05-25T20:31:20-04:00May 25th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The stock market hasn’t been moneyed; well, US equities, anyway. What do I mean by “moneyed?” Common perceptions (myth) link the Federal Reserve’s so-called money printing (bank reserves) with share prices. Everyone still thinks there’s a direct monetary injection in this case by the central monetary agency which causes stocks to rise for no good reason.While we don’t have to [...]

UST 2s & Euro$ Futures *Whites* Both Ask, Landmine At Last?

By |2022-05-24T19:56:19-04:00May 24th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The 2-year Treasury right now is the key point, the spot on the yield curve which is influenced mostly by potential alternative rates including those offered by the Federal Reserve. Because of this, the market for the 2s is looking forward at what those alternate rates are likely to be, then pricing yields accordingly. Since the FOMC sets those alternative [...]

RRP (use) Hits $2T, SOFR Like T-bills Below RRP (rate), What Is (really) Going On?

By |2022-05-23T20:31:15-04:00May 23rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You might not know it, but front-end T-bill yields are not the only market spaces which are making a mockery of the Federal Reserve’s “floor.” There are others, including the same money number the same Fed demanded the world (or whatever banks in its jurisdiction it could threaten) ditch LIBOR over. Yes, SOFR.I’ve repeatedly highlighted the 4-week Treasury bill simply [...]

Inversions And Inventory, The Major Products of October

By |2022-03-28T18:21:31-04:00March 28th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What happened in October 2021? Another year’s Halloween, sure, some beerfest gluttony around the world. For all the happy revelries in that month the financial markets took a decidedly ominous turn. It hadn’t exactly been all rainbows and unicorns in them before then, yet they were at least stable to slightly optimistic about the future for 2022 or beyond.The list [...]

Long-end Inversion *Does* Indicate Recession Risks Are Actually Elevated

By |2022-03-24T20:45:44-04:00March 24th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What can we make of the fact the US Treasury yield curve inverted between the 7-year and 10-year maturities first? It only took a few more days for more of the curve to bend upside-down, yet that just means the whole middle part is where the bad vibes are congregated. Does this somehow disqualify what would otherwise be a clear [...]

Inversion Is The Real March Madness, Just Don’t Take It Literally

By |2022-03-21T20:19:56-04:00March 21st, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

With such low levels of self-awareness, it isn’t surprising that the FOMC’s members continue to pour gasoline on the already-blazing curve fire. March Madness is supposed to be on the courts of college basketball, instead it is playing out more vividly across all financial markets. One reason why is that policymakers at the Fed really still believe, even after so [...]

The Fed Inadvertently Adds To Our Ironclad Collateral Case Which Does Seem To Have Already Included A ‘Collateral Day’ (or days)

By |2022-03-18T18:56:00-04:00March 18th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Federal Reserve didn’t just raise the range for its federal funds target by 25 bps, upper and lower bounds, it also added the same to its twin policy tools which the “central bank” says are crucial to maintaining order in money markets thereby keeping federal funds inside the band where it is supposed to be. The FOMC voted to [...]

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