For the third month in a row, China’s PBOC refrained from guiding its quasi-credit benchmark lower. This seemed out of line with what Premier Li Keqiang, in particular, had stated last week before authorities did drop the RRR rate on Friday. Saying that China would “step up” support for its faltering economy, however the RRR cut was half of what [...]
What everyone is saying, because it’s convenient, is that China’s zero-COVID policies are going to harm the economy. No. Economic harm of the past is the reason for the zero-COVID policies. As I showed yesterday, the cracking down didn’t just show up around 2020, begun right out in the open years beforehand, born from the scattering ashes of globally synchronized [...]
Remember, your goal in investing isn't to earn average returns; you want to do better than average. Thus your thinking has to be better than that of others - both more powerful and at a higher level. Since others may be smart, well-informed and highly computerized, you must find an edge they don't have. You must think of something they [...]
Why did stocks sell off in recent months? Was it the emergence of the Omicron variant? That was a popular narrative right after Thanksgiving but that lasted less than a month before stocks decided to look past COVID make a new high right after the new year. Was the correction due to fears of the Fed raising interest rates and [...]
At first glance, or first exposure to this, there doesn’t seem to be any reason why all these so many pieces could be related. Outwardly, from the mainstream perspective, anyway, you’d think them random, and even if somehow correlated they’re supposed to be in the opposite way from what’s happened. Too much money, they said. It began with the Fed’s [...]
As everyone “knows”, the US dollar is the world’s reserve currency which can only leave the US government in control of it. Participation is both required and at the pleasure of American authorities. If you don’t accept their terms, you risk the death penalty: exile from the privilege of the US dollar’s essential business.From what little most people know about [...]
The Federal Reserve, like other central banks around the world, it does lend out the securities it owns and holds. Sophisticated modern wholesale money markets are highly collateralized, so much so that collateral itself takes on the properties of currency. Elasticity of collateral is as much – if not more – important as elasticity of other forms of wholesale money [...]
We’re only ever given the two options: the economy is either in recession, or it isn’t. And if “not”, then we’re led to believe it must be in recovery if not outright booming already. These are what Economics says is the business cycle. A full absence of unit roots. No gray areas to explore the sudden arrival of only deeply [...]
If there is a better, more fitting way to head into the Christmas holiday in the United States than by digging into the finances and monetary flows of the People’s Bank of China, then I just don’t want to know what it is. Contrary to maybe anyone's rational first impression that this is somehow insane, there’s much we can tell [...]
The Euro$ curve inversion of 2018 wasn’t an isolated case by any means. Along with all the other “bond market” stuff, these together had been a useful warning three years ago for reality as it unfolded the opposite way from the narrative about accelerating growth and inflation. Not just the one curve kinked, an escalating stream of alarms. There was [...]
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