Eurodollar University Episode 175, Part 3: Trick Question, Stock or Flow When It Comes to QE?

Eurodollar University Episode 175, Part 3: Trick Question, Stock or Flow When It Comes to QE?

175.3 Trick Question: How Much QE Will Move the Bond Market


———Ep 175.3 Summary———
Since 2008 the pace of purchases, sales – and everything in between – has not affected the price of bond yields. Indeed, bond yields seem to go the opposite way of they’re ‘supposed’ to act. But what about the stock of purchases? Is there a total, that once reached, becomes critical?

———Ep 175.3 Topics———

00:00 INTRO: Does either the flow or stock of quantitative easing impact bond yields?
00:44 Central banks have bought a lot of bonds, therefore the bond market is rigged.
01:51 From 2008-11 the Fed’s purchases (flow) of UST were ‘contradicted’ by the bond market.
05:24 Central bank balance sheet expansion correlates well (enough) with capital market values.
08:41 Central banks were buying assets that the private market was ALREADY buying.
12:40 Central bank increases in system bank reserves is a deflationary warning.
14:34 The central banks buy sovereign bonds but other markets signal “warning, low growth” too.

———Ep 175.3 References———

If Not ‘Flow’, Then Has ‘Stock’ ‘Rigged’ The Flattening Curve In QE’s Favor?: https://bit.ly/32Ijkf9
Alhambra Investments Blog: https://bit.ly/2VIC2wWlin
RealClear Markets Essays: https://bit.ly/38tL5a7

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———Euro$U Team———

Jeff Snider, Head of Global Investment Research for Alhambra Investments. Illustrations by David Parkins, myth maker. Audio and video editor, The Terence. Logo design by pixelist Lisa Jiang. Master of ceremonies, Emil Kalinowski. Musical intro is “Silent Night” by One Man Quartet. Musical outro is “O Christmas Tree” by The Evergreen Trio. Both found at Epidemic Sound.

———Where To Find Us———

Jeff: https://twitter.com/JeffSnider_AIP
Jeff: https://alhambrapartners.com/author/jsnider/

Emil: https://twitter.com/EmilKalinowski
Emil: https://www.EuroDollarEnterprises.com

David: https://DavidParkins.com/
Terence: https://www.VisualFocusMedia.com

Lisa: http://Lisa-Jiang.com/
Lisa: https://twitter.com/@Nylonnerves

 


About the Author:

Give us a call at 1-888-777-0970 or via email at info@alhambrapartners.com to discuss how his unique approach informs our investment decisions. We'd be happy to discuss our investment strategies and provide a complimentary portfolio review. Jeff is the Head of Global Research at Alhambra Investments. He is not an economist, which is probably why he's been able to develop a working model of the global monetary system. His research is unique and informative in ways an economist would never consider.
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