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Revisiting Hong Kong (For Reasons We Wish We Wouldn’t Have To)

By |2019-01-17T17:48:21-05:00January 17th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This is perhaps the perfect day to review what’s going on in Hong Kong (thanks J. Fraser). I’ll be in Vancouver over the weekend to talk about curves, so why not preface it with a little HKD update. With everyone focused elsewhere, the story of 2017, in my view, wasn’t so big in 2018. For reasons that will further disturb [...]

Your Semi-Annual Golden Week Reminder

By |2018-09-25T11:56:06-04:00September 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 in early October, the banking [...]

No Japan In Wyoming

By |2018-08-24T11:57:23-04:00August 24th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s been a few years since Japan’s top central banker has been invited to Jackson Hole. The Kansas City branch of the Federal Reserve is today hosting the opening of its annual symposium. Typically, the introduction is given by the President of the KC Fed and then opening remarks from whomever is Chairman of the FOMC. Outside of those, the [...]

On Which Side Is HKD?

By |2018-08-15T12:35:44-04:00August 15th, 2018|Currencies, Federal Reserve/Monetary Policy, Markets|

In early March, the CEO of Hong Kong’s Monetary Authority (HKMA) Norman Chan issued a press release claiming among other things his quasi-central bank had more than enough reserves to defend the lower edge of the Hong Kong dollar’s (HKD) monetary band. In trying to settle what was clearly upset markets and not just those in and around Hong Kong, [...]

The Quarks and Quirks of CNY’s Big Drop

By |2018-07-25T13:04:08-04:00July 25th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In 1962, physicist Wolfgang Panofsky finally obtained funding from the Atomic Energy Commission. As a faculty member at Stanford University he wanted the federal government to fund his monster. Dubbed Project M, for monster, Dr. Panofsky was seeking a method for scientists to obtain evidence for what was really going on inside the atom. The project was really a linear [...]

It’s The Track Record That Is Unaccounted-for Risk

By |2018-04-25T19:46:51-04:00April 25th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

No one seems able to account for the rise in LIBOR-OIS. I think it’s a vain effort, and focuses on the wrong segments, but nonetheless there is considerable uncertainty which always casts suspicions into the shadows. That is important.  A few weeks ago, all the big bank analysts were alight with their theories. They couldn’t agree, as noted in this [...]

Very Interesting, These ‘Its’

By |2018-04-19T18:45:31-04:00April 19th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Today for the first time in over a week, HKD moved. That’s not unsurprising, as we should expect that nothing goes in a straight line – even devaluation of this kind. The issue is more about why it might have moved, or what it cost to move it. The Hong Kong Monetary Authority (HKMA) had started carefully. They were only [...]

Hong Kong, China, And The Nightmare of Forex Piles

By |2018-04-13T19:35:35-04:00April 13th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Very early on in the turn, I mean very early, you could already tell there were substantial problems underneath. By the time CNY started lower, against all expectations, there had already been serious signs of trouble in China for months by then. In that initial seemingly minor drop in early 2014, the PBOC’s actions belied a stable system. If you knew [...]

Just A Few More Pips

By |2018-03-22T17:30:40-04:00March 22nd, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On Page 1, Chapter 1 of the Central Banker Crisis Handbook it states very clearly, “do not make it worse.” It’s something like the Hippocratic oath where monetary authorities must first assess what their actions might do to an already fragile system. It’s why they take great pains to try and maintain composure, appearing calm and orderly while conflagration rages [...]

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