Federal Reserve/Monetary Policy

A Repo Deluge…of Necessary Data

By |2019-12-13T17:16:15-05:00December 13th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Just in time for more discussions about repo, the Federal Reserve delivers. Not in terms of the repo market, mind you, despite what you hear bandied about in the financial media the Fed doesn’t actually go there. Its repo operations are more RINO’s – repo in name only. No, what the US central bank actually contributes is more helpful data. [...]

If The Best Case For Consumer Christmas Is That It Started Off In The Wrong Month…

By |2019-12-13T12:49:56-05:00December 13th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Gone are the days when Black Friday dominated the retail calendar. While it used to be a somewhat fun way to kick off the holiday shopping season, it had morphed into something else entirely in later years. Scenes of angry shoppers smashing each other over the few big deals stores would truly offer, internet clips of crying children watching in [...]

Lagarde Channels Past Self As To Japan Going Global

By |2019-12-12T18:09:03-05:00December 12th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As France’s Finance Minister, Christine Lagarde objected strenuously to Ben Bernanke’s second act. Hinted at in August 2010, QE2 was finally unleashed in November to global condemnation. Where “trade wars” fill media pages today, “currency wars” did back then. The Americans were undertaking beggar-thy-neighbor policies to unfairly weaken the dollar. The neighbor everyone though most likely to be sponged off [...]

The FOMC Channels China’s Xi As To Japan Going Global

By |2019-12-11T18:45:19-05:00December 11th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The massive dollar eruption in the middle of 2014 altered everything. We’ve talked quite a lot about what Euro$ #3 did to China; it sent that economy into a dive from which it wouldn’t escape. And in doing so convinced the Chinese leadership to give growth one more try before changing the game entirely once stimulus inevitably failed. In many [...]

Dealers’ Choice: Repo Facts Are Indeed Very Stubborn Things

By |2019-12-12T10:53:18-05:00December 11th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The biggest thing about September’s repo rumble wasn’t the double-digit GC rate(s), it was the timing. Beginning on the Monday the day before the FOMC’s regular policy meeting, Jay Powell couldn’t accomplish what he had set out to. The Fed’s Chairman wanted what was the second rate cut in the series to be a more placid one. A confirmation, of [...]

If Trade Wars Couldn’t, Might Pig Wars Change Xi’s Mind?

By |2019-12-10T17:01:01-05:00December 10th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Forget about trade wars, or even the eurodollar’s ever-present squeeze on China’s monetary system. For the Communist Chinese government, its first priority has been changed by unforeseen circumstances. At the worst possible time, food prices are skyrocketing. A country’s population will sit still for a great many injustices. From economic decay to corruption and rising authoritarianism, the line between back [...]

The BIS Misses An Opportunity To Get Consistent With The Facts

By |2019-12-09T17:22:20-05:00December 9th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Much has been made about the repo market since mid-September. Much continues to be made about it. The question is why. It is now near the middle of December and repo looks dicey despite repo operations and a not-QE small-scale asset purchase intended to increase the level of bank reserves. Always the focus on “funds” which may be available. It [...]

You Will Never Bring It Back Up If You Have No Idea Why It Falls Down And Stays Down

By |2019-12-06T18:46:59-05:00December 6th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It wasn’t actually Keynes who coined the term “pump priming”, though he became famous largely for advocating for it. Instead, it was Herbert Hoover, of all people, who began using it to describe (or try to) his Reconstruction Finance Corporation. Hardly the do-nothing Roosevelt accused Hoover of being, as President, FDR’s predecessor was the most aggressive in American history to [...]

Disposable (Employment) Figures

By |2019-12-06T17:36:44-05:00December 6th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If last month’s payroll report was declared to be strong at +128k, then what would that make this month’s +266k? Epic? Heroic? The superlatives are flying around today, as you should expect. This Payroll Friday actually fits the times. It wasn’t great, they never really are nowadays (when you adjust for population and participation), but it was a good one [...]

A Time Recession

By |2019-12-05T19:12:35-05:00December 5th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Eurostat confirmed earlier today that Europe has so far avoided recession. At least, it hasn’t experienced what Economists call a cyclical peak. During the third quarter of 2019, Real GDP expanded by a thoroughly unimpressive +0.235% (Q/Q). This was a slight acceleration from a revised +0.185% the quarter before. The real question, though, is whether the business cycle approach means [...]