Federal Reserve/Monetary Policy

I Can’t Get No Re-cession

By |2019-11-19T17:15:15-05:00November 19th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Germans managed to do it, to avoid meeting the dreaded technical definition of recession. While not a meaningful one, conventional wisdom assigns the classification to any economy which features two straight quarters of declining output typically measured by real GDP. Germany’s was slightly negative in Q2 with most expectations for a repeat in Q3. Instead, deStatis reported last week [...]

TIC for September: Not Repo But ‘Further Flaws’

By |2019-11-19T12:15:42-05:00November 19th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Treasury Department’s TIC for September 2019 finally arrived yesterday. Two months in arrears, it’s often torturous having to wait for the detailed cross border bank figures to show up for particularly noteworthy months. You might remember September for something going on in repo, and TIC is right where we’ve been tracking (trying to) global repo and collateral flows since [...]

The Financial Midpoint Comes Into Focus

By |2019-11-18T16:51:54-05:00November 18th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Another dovish example to be put on the growing pile of good things? The People’s Bank of China (PBOC) earlier today trimmed one of its many policy rates. The 7-day reverse repo rate will be reduced from 2.55% to 2.50%, a 5 bps cut practically pointless in functional terms widely interpreted instead for its purported “meaning.” Like the Fed, the [...]

Another Perfect Example of the Euro$ Squeeze

By |2019-11-18T12:50:44-05:00November 18th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Earlier this month, the Statistics Bureau of Japan had reported an enormous surge in household outlays. For the month of September 2019, the Japanese had splurged on everything from big ticket items to regular discretionary products. Total spending in the month was up 9.5% year-over-year in real terms, an enormous increase which had been the fastest pace ever recorded in [...]

Powell’s Strong Economy Canceled By Powell’s Data

By |2019-11-15T18:10:33-05:00November 15th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

US Industrial Productions continues to more and more resemble the worst of the Euro$ #3, that “manufacturing recession” of four years ago. Back at the end of 2014 and lasting well into 2016, IP was led lower by the oil crash among other problems. They called it a supply glut but we all know that wasn’t ever the case. What [...]

Retail Sales Make It Two Toward The Second Act

By |2019-11-15T16:40:41-05:00November 15th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One monthly result does not make a trend. Two? Still not a trend, but edging closer to one and more solid analysis. If making a claim based off the potential for one high frequency result is going out on a limb, then a second result confirming the first while not yet solid ground is at least a bit thicker of [...]

China’s Xi Free To Continue The Downward Course

By |2019-11-14T18:38:02-05:00November 14th, 2019|Economy, Federal Reserve/Monetary Policy, Markets|

Perhaps ominously, there were overcast and hazy conditions in Beijing back on October 1 when China put on its largest display of military force in the nation’s history. To celebrate the Communist’s regime 70 years of that history, the country’s Chairman Xi Jinping dressed up like he was its original founder Chairman Mao. Joined by his immediate two predecessors, Jiang [...]

How Do You Spell R-E-P-O With C-L-O?

By |2019-11-13T14:14:32-05:00November 13th, 2019|Bonds, Economy, Federal Reserve/Monetary Policy|

There’s trouble brewing in a particular sector of the corporate bond market. It’s not really new trouble, merely the continuation of doubts and angst that have existed for more than a year already. What’s different now is that it is finally causing more open disruptions, and thus sparking our interest as to what it might mean well beyond this specific [...]

QE’s and Rate Cuts: Two Very Different Sets of Sentiment Drawn From Them

By |2019-11-13T11:10:52-05:00November 13th, 2019|Economy, Federal Reserve/Monetary Policy, Stocks|

The stock market’s dichotomy grows ever wider. On the one side, record high prices which are being set by the expectations of a trade deal plus renewed worldwide “stimulus.” Sure, officials everywhere were late to see the downturn coming, but they’ve since woken up and went to work. On the other side, though, there’s not nearly the same level confidence. [...]