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illiquidity

COT Blue: A Decade of Weird

By |2018-03-16T16:17:47-04:00March 16th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On July 15, 2008, Federal Reserve Chairman Ben Bernanke sat in front of Congress for the second of his required Humphrey-Hawkins reports for that year. The original act meant for these to be more than bland economic obfuscation, where the original Full Employment and Balanced Growth Act of 1978 demanded monetary targets. The Fed stopped being able to produce them [...]

Small Tremors

By |2018-02-06T12:22:41-05:00February 6th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

The current state of geological science cannot predict an earthquake. There is hope, however, that warnings might be realistically developed so that populations in danger of the “big one” can be given some sort of reasonable information about probabilities. In studying the past few devastating quakes, such as the 2011 9.0 that hit Japan twice (once in the shaking, then [...]

More Small Things

By |2017-04-25T13:30:57-04:00April 25th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On April 23, 2015, the US Treasury auctioned off $18 billion in inflation-indexed bonds maturing in April 2020. These 5-year TIPS stopped out at the lowest yield for that particular security class in almost a year before then. Coming as it did during the spring of 2015, it was met with the usual textbook applied commentary, where bond investors were [...]

TIPping Points?

By |2017-04-21T19:15:08-04:00April 21st, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Federal Reserve’s complete change last year wasn’t something that happened all at once. There were several hints that a lot was going on behind the scenes that may never become public, including five years (now four) down the road when the full policy transcripts are released to the public. There was more interest in R* and secular stagnation, for one, [...]

The Ritual of Summer

By |2016-07-27T16:29:12-04:00July 27th, 2016|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Domestic oil inventory rose in the latest week, updates from the US EIA show. That build broke a streak of nine consecutive weekly draws dating back to mid-May. It is not unusual for oil inventory to rise and fall in various weeks, but given the mechanics of oil prices of late there is an atypical edge and attention to any [...]

Evolving Characteristics Don’t Seem To Alter The Ritual of Summer

By |2016-07-27T14:16:11-04:00July 27th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On February 6, 2008, oil prices (WTI) dropped to $87.16, the lowest price since the prior October. Oil had been rising as the market misunderstood and dramatically mispriced what was going on; buying on the idea of monetary policy accommodation in growing intensity, while at the same time not factoring the hidden monetary destruction that was far greater. It was [...]

Money Market Illiquidity Further Removes A Central Myth

By |2016-06-27T18:02:52-04:00June 27th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It might be expected that monetary policy would fail to achieve its goal in attempting to manage the economy when it cannot even meet its own basic technical requirements. The main lever of Fed policy continues to be the federal funds rate even though it is entirely irrelevant, and has been for a long time. There is much more to [...]

China Says ‘Thank You’

By |2016-06-03T17:25:40-04:00June 3rd, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

By any reasonable standard, today’s trading in “dollars” was highly unusual. The Chinese yuan had been trading its typical depreciation route all through the night and toward the US open. At about 6:15am, CNY was just about to touch 6.59 and a new low that would have put it back into early January territory (not good). It traded modestly higher [...]

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