primary dealers

Anticipating How Welcome This Second Deluge Will Be

By |2018-08-28T16:36:39+00:00August 28th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Effective federal funds (EFF) was 1.92% again yesterday. That’s now eight in a row just 3 bps underneath the “technically adjusted” IOER. If indeed the FOMC has to make another one to this tortured tool we know already who will be blamed for it. The Treasury Department announced yesterday that it will be auctioning off [...]

Is It Over?

By |2018-05-01T17:10:13+00:00May 1st, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

The world is full of anomalies. It may seem like a paradox, but financial markets are particularly eventful places. Something happens, some people notice, and most often it goes…nowhere. It’s all the time and a constant part of analysis, trying to identify and separate what is truly contained. The global eurodollar monetary system grew so [...]

Bonds vs. Economists; The Means to the End

By |2017-12-11T16:52:31+00:00December 11th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As part of its effort to stress its own self-importance, the Federal Reserve conducts a survey of the Primary Dealer members through its New York branch. A written questionnaire is sent out to each bank in advance of every monetary policy meeting. The purpose is for monetary policymakers to make sure that there aren’t any [...]

Three Years Ago QE, Last Year It Was China, Now It’s Taxes

By |2017-12-04T18:57:43+00:00December 4th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

China’s National Bureau of Statistics reported last week that the official manufacturing PMI for that country rose from 51.6 in October to 51.8 in November. Since “analysts” were expecting 51.4 (Reuters poll of Economists) it was taken as a positive sign. The same was largely true for the official non-manufacturing PMI, rising like its counterpart [...]

Just When You’ve Thought You’ve Seen It All

By |2017-12-04T17:18:07+00:00December 4th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

I could understand it if its track record was spotty, or partially mixed. But the level of denial runs deep and wide with the yield curve. There is a growing chorus of nonsense, really, which is attempting to spin the flattening as some kind of benign technical rotation that through illogical convolution equals the opposite [...]

An Inside Basis For Unfortunate Continuity

By |2017-04-12T15:48:53+00:00April 12th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Primary dealer holdings of UST securities have been on the rise again. This sort of warehouse activity is drastically misunderstood, exemplified best when last year around this time surging dealer inventory was blamed on those banks’ purported inability to sell off their holdings. It was an absolutely absurd idea for several reasons, but most prominently [...]

Benign Foreign Dollar Buffer or Systemic Collateral Issues, Continued Illiquidity and ‘Dollar Strain’?

By |2016-05-03T19:12:09+00:00May 3rd, 2016|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There isn’t a whole lot known about the Federal Reserve’s Foreign Reverse Repo accommodation, and I believe that is intentional. The rate which the Fed pays to “borrow cash” from foreign central banks and governments is unknown. What is known is just how much in total the Fed is “accommodating” foreign dollar business. This RRP, [...]

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