Back on February 25, Treasury auctioned 7-year notes and it did not go (as) well. Maybe you remember us saying something about it, and then again and again and… The prevailing view then – and now – was reflation hadn’t just accelerated, the true inflation long-promised by so much “money printing” (or at least by those who equate bank reserves [...]
One idea for why the labor market hasn’t come back in nearly the same way as the goods economy or “aggregate demand” has, each spurred on by Uncle Sam’s repeated use of his TGA-fueled helicopter, is that yet another of the federal government’s rescue efforts has hindered the employment rebound – from the worker side. Businesses, many say, really, desperately [...]
77.2 So, Not Money Printing———Ep 77.2 Summary——— QE has been uniformly aligned with the idea of money printing because it sounds like it and there is a central bank doing it. We have to take central bankers' word that there is a pot of bank reserves at the other end of the QE rainbow. While that part is true, bank [...]
I am very much prone to bludgeoning several long-deceased equines, and given what’s really going on with the Fed's reverse repo (and nearly all commentary unhelpful surrounding it) this gives me yet another chance to really reuse my cudgel on at least two of them. This another opportunity to fixate more upon bank reserves, a forever topic until everyone learns [...]
Why are Treasury bills the best of the best, the purest of the most pristine? The better part of the answer comes in the form of a mere three letters: O, T, and R. Those happen to stand for on-the-run which in repo simply means dependably liquid. OTR securities are those most recently auctioned thereby the specific securities which have [...]
77.1 Which Was Bigger, April CPI or Reaction To It?———Ep 77.1 Summary——— Finding ourselves in uncomfortable agreement with Jay Powell and many mainstream Economists who have been utterly wrong about inflation rising for too many years to count, this doesn't discount at least their more grounded view as to inflation not rising based on conditions right now. There's every reason [...]
For what it ever may have been worth, you have to at least acknowledge the Federal Reserve really did put its (own limited use form of) money where its abundant mouth had been. The entire story of the crisis era and then post-crisis experience of “abundant reserves” indicated a monetary situation (liquidity, colloquially) where supposedly money was beyond sufficient. Too [...]
A dead rat would’ve easily explained the foul odor, though it wouldn’t have ended the matter. The smell was real, the cause still yet to be identified in the mainstream view. For the bond market, anyway, it was a process of discovery which began with an unexpected stench of something much bigger and more profound than any single or simple [...]
For Episode 74.0 of Eurodollar University’s Making Sense, Emil and I were incredibly honored and thrilled to have been able to bring on Allison Fedirka from Geopolitical Futures, the outfit of George Friedman fame. Specifically, we were interested in her specialty which is Latin America because after China that’s where you want to go next to understand how developments money [...]
75.2 Fed 'admits' Negligence, Monetary Malpractice ———Ep 75.2 Summary——— It's never what they say, it's what they do. For months before March 2020's collateral-centered blowup, GFC2, we regularly chastised Jay Powell's not-QE(5) program for doing the opposite of what would've been helpful. They bought T-bills and only T-bills. But then, right in the thick of the meltdown, the Fed stopped [...]
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