Returning to the theme of the parallel evolutionary developments in the early 20th century as compared to the last decades of it, in 1908 famed Gilded Age industrialist Andrew Carnegie wrote what seems today a misplaced article for New York Outlook magazine. The steel magnate lamented the state of American banking, which he called within his piece “at least one [...]
According to the US Treasury, the calculated equivalent treasury bill yield for the 4-week maturity was 76 bps at Friday’s close. At such a short time frame there isn’t actually a single instrument that creates the rate, more of an amalgamation (spline) of various 4-week securities staggered on their own. The bill maturing this week, for example, closed last week [...]
The Phelan Act of 1920 sounded simple in principle. It authorized the various Federal Reserve Banks, at that time twelve district branches operating independently, to charge progressive interest rates on the rediscounting activities at their respective windows (the discount rate was the interest charged to obtain collateralized funds from the various reserve banks). Private banks in each district were given [...]
When the price of oil first collapsed at the end of 2014, it was characterized widely as a “supply glut.” It wasn’t something to be concerned about because it was believed attributable to success, and American success no less. Lower oil prices would be another benefit to consumers on top of the “best jobs market in decades.” That may have [...]
After the Fed “raised rates” a little over a week ago, the US treasury market responded with another collective shrug. Long-term rates fell rather than rose, having already responded that way to the prior two hikes. The word “conundrum” has sadly been revived. It is unfortunate because treasury market behavior in the middle of the last decade was never a [...]
Brazil is another one of those topics which doesn’t seem to merit much scrutiny apart from morbid curiosity. Like swap spreads or Japanese bank currency redistribution tendencies, it is sometimes hard to see the connection for US-based or just generically DM investors. Unless you set out to buy an emerging market ETF heavily weighted in the direction of South America, [...]
There are four basic categories to the PBOC’s balance sheet, two each on the asset and liability sides of the ledger. The latter is the money side, composed mainly of actual, physical currency and the ledger balances of bank reserves. Opposing them is forex assets in possession of the central bank and everything else denominated in RMB. Because liabilities need [...]
When President Trump nominated Congressman Tom Price for Secretary of Health and Human Services he created a vacancy in Georgia’s 6th Congressional District. After no candidate secured a majority in the first round of voting, a runoff was to take place yesterday among the top two contenders. Republican Karen Handel squared off against Democrat Jon Ossoff in a race both [...]
Earlier this month, the BEA estimated that Disposable Personal Income in the US was $14.4 trillion (SAAR) for April 2017. If the unemployment rate were truly 4.3% as the BLS says, there is no way DPI would be anywhere near to that low level. It would instead total closer to the pre-crisis baseline which in April would have been $19.0 [...]
I am a long-term optimist by nature. Stop laughing. I am well aware I have attained a reputation as something of a permabear, but that is merely the consequence of the time period in which we inhabit. Read some of the things I wrote in 2009 (and even in early 2010) and you might think them authored by an entirely [...]
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