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The Biggest Risk, No Surprise, Collateral

By |2022-06-23T19:10:24-04:00June 23rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s not just the 4-week T-bill rate which is defying the Fed’s illusion of control, though that’s where the incidents are most evident. The front bill is nowhere close to the official RRP “floor” which can only mean one thing: collateral shortage, a large and persistent liquidity premium. Therefore, the further under said floor, the more the competition for the [...]

RRP (use) Hits $2T, SOFR Like T-bills Below RRP (rate), What Is (really) Going On?

By |2022-05-23T20:31:15-04:00May 23rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You might not know it, but front-end T-bill yields are not the only market spaces which are making a mockery of the Federal Reserve’s “floor.” There are others, including the same money number the same Fed demanded the world (or whatever banks in its jurisdiction it could threaten) ditch LIBOR over. Yes, SOFR.I’ve repeatedly highlighted the 4-week Treasury bill simply [...]

Collateral Shortage…From *A* Fed Perspective

By |2022-05-03T20:32:04-04:00May 3rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s never just one thing or another. Take, for example, collateral scarcity. By itself, it’s already a problem but it may not be enough to bring the whole system to reverse. A good illustration would be 2017. Throughout that whole year, T-bill rates (4-week, in particular) kept indicating this very shortfall, especially the repeated instances when equivalent bill yields would [...]

The Fed Inadvertently Adds To Our Ironclad Collateral Case Which Does Seem To Have Already Included A ‘Collateral Day’ (or days)

By |2022-03-18T18:56:00-04:00March 18th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Federal Reserve didn’t just raise the range for its federal funds target by 25 bps, upper and lower bounds, it also added the same to its twin policy tools which the “central bank” says are crucial to maintaining order in money markets thereby keeping federal funds inside the band where it is supposed to be. The FOMC voted to [...]

So Much Fragile *Cannot* Be Random Deflationary Coincidences

By |2022-03-07T20:34:51-05:00March 7th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

Bill Issuance Has Absolutely Surged, So Why *Haven’t* Yields, Reflation, And Other Good Things?

By |2021-11-01T19:44:36-04:00November 1st, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Treasury Secretary Janet Yellen hasn’t just been busy hawking cash management bills, her department has also been filling back up with the usual stuff, too. Regular T-bills. Going back to October 14, at the same time the CMB’s have been revived, so, too, have the 4-week and 13-week (3-month). Not the 8-week, though.Of the first, it’s been a real tsunami [...]

Some Next Steps To Watch For Scarce Collateral

By |2021-09-24T19:39:43-04:00September 24th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It gets even more interesting in the bill market, not that anything here has been unexpected. And since this is the same week as Evergrande, still no hint of spillover and tightening, at least not beyond what has become typical.That means mostly on the supply side. Treasury Secretary Yellen is losing breathing room fast, meaning she’s forced to dig further [...]

Talking To Bill About Evergrande

By |2021-09-20T19:43:00-04:00September 20th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The US Treasury auctioned off $45 billion in 3-month (13w) bills this morning. Despite the Federal Reserve paying 5 bps for SOMA UST collateralized, for “some” reason the primary market’s players wanted this issue far more. The auction’s high was just 3.5 bps, its median 2.5. These are down from 4 bps and 3.5 bps, respectively, last Monday. With the [...]

Another Big ‘Ide’ To Add To Deflation’s March

By |2021-08-02T19:47:57-04:00August 2nd, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There’s another foreign angle to the grave misconceptions about what overseas financial entities are doing, and are made to do, with specifically US Treasury assets (and overall US$ assets more broadly). The American public, anyway, has wrongly been led to believe that those outside the US must hate the US and its dollar; at least its recklessly spendthrift government. None [...]

Tapering The Truth

By |2021-07-28T17:13:38-04:00July 28th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Ceremony and ritual are not just important concepts for priming and keeping faith, they are absolute essentials. There’s a reason why cult leaders make themselves appear - at every instance - indispensable while at the same time keeping their masses busy with nonsense. Can’t ever permit thinking too much lest the house of cards crash downward at the first slight [...]

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