They Want To Call It India’s Lehman, It’s Just Dollar

By |2018-10-02T18:08:44+00:00October 2nd, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Eurobonds are not a perfect substitute, but they may be someone’s only alternative. In some ways, Reflation #3’s weakness can be found originating in this context. The “rising dollar”, or eurodollar squeeze, of 2014-16 was a failure and even run on credit-based dollar funding offshore. If banks won’t deliver dollars, what’s left? Bonds. There has [...]

One Fragile Year In Review: It Was A Warning

By |2018-09-05T17:46:54+00:00September 5th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One year ago today, something broke. It wasn't a big thing, practically a footnote seemingly not worth mainstream attention. Out of nowhere, the 4-week T-bill yield spiked. On Friday, September 1, 2017, the equivalent interest rate for the instrument was steady at 96 bps. That was already a problem because the Federal Reserve’s RRP was [...]

Downside Not Upside Global Risk

By |2018-08-28T18:59:35+00:00August 28th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The UST yield curve continues to flatten (as it does elsewhere). All sorts of mainstream articles have been published lately about it. Many of them often refer to academic pieces ostensibly trying assuage all fears about the yield curve’s threatening inversion. Fret not the distortion, they say. And they are right. As I constantly remind [...]

Unwelcome August

By |2018-08-13T16:58:51+00:00August 13th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy|

There is just something about August. It is irresistible, apparently, in all the wrong ways. For starters, there are big ones and small ones but somehow they all line up against liquidity and plentiful eurodollar money. In the former class there was, of course, August 9, 2007, August 9, 2011, and August 10, 2015. Even [...]

Simple Very Complex Correlation

By |2018-06-08T12:13:53+00:00June 8th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s amazing how in a world of supposedly separate, closed economies they all seem to congregate anyway toward the same events. In early 2000, the US dot-com bubble ran into its own contradictions, the rationalizations holding it together no longer so tempting to what was for years insatiable investor appetite. Not even a year later, [...]