Federal Reserve/Monetary Policy

Eurodollar University’s Making Sense; Episode 56; Part 1: What’s Special About Repo Specialness

By |2021-03-16T16:27:57-04:00March 15th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

56.1 Treasury Selloff Submerges Repo Market Under Zero ———Part 1 Summary——— Learn why rates in the repurchase agreement market went negative. What might it mean for economic recovery, not only in the United States but globally? Learn about 2013 and 2020 when repo securities also "traded special". Jeff Snider offers two explanations, one benign (sort of). The other? Malign. ———Episode [...]

Eurodollar University’s Making MORE Sense; Episode 55: What Did They Say?

By |2021-03-12T17:58:34-05:00March 12th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

55.0 Live Reaction: What Central Banks Should TargetJeff Snider reacts LIVE! to a Martin Wolf column in the Financial Times. Wolf ponders what central banks should target (e.g. inflation, asset prices, social justice, nominal GDP). Incredibly at no point in the article was targeting actual money supply considered. WILD! ———SPONSOR——— But first, this from Eurodollar Enterprises! Friends, do you direct [...]

Our Global Inflation Tour Chock Full of Normal

By |2021-03-12T17:48:30-05:00March 12th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It really is about abnormality. What I mean by that is, contrary to popular imagination fed by the Fed and other central banks, ever since 2008 the inflation paradigm has changed. The first global financial crisis (GFC1) has proven time and again how it wasn’t a one-off, and since it was a monetary breakdown (global dollar shortage) that’s been permanent [...]

JOLTS Revisions: Much Better Reopening, But Why Didn’t It Last?

By |2021-03-11T19:49:16-05:00March 11th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to newly revised BLS benchmarks, the labor market might have been a little bit worse than previously thought during the worst of last year’s contraction. Coming out of it, the initial rebound, at least, seems to have been substantially better – either due to government checks or, more likely, American businesses in the initial reopening phase eager to get [...]

Eurodollar University’s Making Sense; Episode 54; Part 3: The Historical Inflation Bias

By |2021-03-11T18:42:18-05:00March 11th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

54.3 Deficits + Bond Losses + Inflation Fear = 1937? ———Part 3 Summary———In 1937, like now, circumstantial evidence and biases of central bankers suggested the impending arrival of fierce inflation: huge government deficits, better economic statistics, rising bond yields and excess bank reserves. Yet the underlying condition was of depression and credit illiquidity. ———Episode 54 Intro——— “The pen is mightier [...]

What Gold Says About UST Auctions

By |2021-03-10T19:29:16-05:00March 10th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The “too many” Treasury argument which ignited early in 2018 never made a whole lot of sense. It first showed up, believe it or not, in 2016. The idea in both cases was fiscal debt; Uncle Sam’s deficit monster displayed a voracious appetite never in danger of slowing down even though – Economists and central bankers claimed – it would’ve [...]

Eurodollar University’s Making Sense; Episode 54; Part 2: As The CNY Turns

By |2021-03-10T17:55:53-05:00March 10th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

54b Trigger Warning? China's Yuan and PMI Turn Bad? ———Part 2 Summary———The appreciation of the Chinese yuan against the American dollar has paused. A survey of the Chinese services sector scored a historic low. Are these the first indications of an economic slowdown? A slowdown that is not only Chinese but global? ———Episode 54 Intro——— “The pen is mightier than [...]

What *Must* Lie Beyond the M’s

By |2021-03-11T17:19:49-05:00March 10th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This particular part of the hysteria is understandable, if thoroughly unconvincing. Forget the Fed and its bank reserves for moment, whatever those are now and then. The banking system is where it’s at, monetarily speaking, and it is the banking system which seems to have lost its handle on the money printing lever. If we’re focused beyond bank reserves and [...]

Deja Vu: Treasury Shorts Meet Treasury Shortages

By |2021-03-09T18:37:14-05:00March 9th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Investors like to short bonds, even Treasuries, as much as they might stocks and their ilk. It should be no surprise that profit-maximizing speculators will seek the best risk-adjusted returns wherever and whenever they might perceive them. If one, or a whole bunch, has to first “borrow” a security the one doesn’t own in order to sell something at a [...]

Standard Textbook Dollar, Or Eurodollar Standard?

By |2021-03-08T20:06:11-05:00March 8th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s standard textbook stuff. Convention has it that “capital flows” are determined by the portfolio effects of interest rate differentials. Quite simply, if yields aren’t very high for low risk US instruments (like UST’s) or their European counterparts, fixed income managers must go hunting for yields overseas in Emerging Markets who offer fatter returns by comparison. Thus, “capital” is said [...]

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