Denmark’s Niels Bohr considered himself more of a philosopher than a physicist, yet he contributed so much to the groundbreaking approach that became the basis for quantum physics. At the same time Germany’s Werner Heisenberg was writing the famous paper on “his” uncertainty principle, Bohr was purportedly on vacation thinking up the deeper consequences and meaning of all its implications.Upon [...]
The US economy is still stuck in the stall it's been in since early spring. Sometime in mid-March everything just seems to have gone into suspended animation. Interest rates and the copper/gold ratio stopped rising. Real interest rates (TIPS) stopped rising. The US dollar started falling. But nothing has fallen so far as to warrant concern about a double-dip recession. [...]
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 [...]
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