Markets

(No) Dollars And (No) Sense: Eighty Argentinas

By |2020-03-30T17:46:41-04:00March 30th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

India like many emerging market countries around the world holds an enormous stockpile of foreign exchange reserves. According to the latest weekly calculation published by the Reserve Bank of India (RBI), the country’s central bank, that total was a bit less than half a trillion. While it sounds impressive, when the month began the balance was much closer to that [...]

A Marathon, Not A Sprint

By |2020-03-30T09:20:12-04:00March 30th, 2020|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Financial Planning, Markets, Real Estate, Stocks, Taxes/Fiscal Policy|

Stocks rose last week, a breathtaking, nearly 20% run off the recent lows before a pullback Friday trimmed the gain for the week to about 11%. That was certainly helpful but investors would be well-advised not to get too excited. This is what bear market rallies look like. They come out of nowhere, they run much further than anyone thinks [...]

Vital Lessons Still Not Learned: Be Careful About GFC2

By |2020-03-27T16:41:55-04:00March 27th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s one of those crisis-level-of-illiquidity things that if you heard about it in normal times it would make you shake your head in disbelief. During a full-blown meltdown maybe it’s not standard stuff, but given the chaotic conditions it doesn’t seem so preposterous, either. Negative convexity is an otherwise benign phenomenon in fixed income that when combined with a lack [...]

It’s Not About Jobless Claims Today, It’s About What Will Hamper Job Growth In A Few Months

By |2020-03-26T17:45:09-04:00March 26th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You’ve no doubt heard about the jobless claims number. At an incomprehensible 3.28 million Americans filing for unemployment for the first time, this level far exceeded the wildest expectations as the economic costs of the shutdown continue to come in far more like the worst case. And as bad as 3mm is, the real hidden number is likely much higher. [...]

Collateral Shortage Goes Global, Hinting At The Way The (euro)Dollar Reaches Its Eventual End

By |2020-03-25T18:56:44-04:00March 25th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Government securities have become so scarce that it is driving down repo rates. A collateral shortage that has become so acute, money dealers won’t part with their stock of government securities no matter what the price. Stop me if you’ve heard this before. Except, we’re talking about Japan and JGB’s here rather than UST’s. The trick is that both types [...]

Not Good: Eurodollar Futures Curve Sells Off, At The FRONT

By |2020-03-25T13:21:01-04:00March 25th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If the Fed has promised to print an unlimited supply of money, then why are inflation expectations at crisis lows and falling? At the same time, there are still-growing signs of illiquidity and an interbank crackup. Bazooka after bazooka, yet they don’t seem to be having much effect. That’s true domestically but more so offshore. You may have seen references [...]

Three Short Run Factors Don’t Make A Long Run Difference

By |2020-03-24T19:28:45-04:00March 24th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

There are three things the markets have going for them right now, and none of them have anything to do with the Federal Reserve. More and more conditions resemble the early thirties in that respect, meaning no respect for monetary powers. This isn’t to say we are repeating the Great Depression, only that the paths available to the system to [...]

MAKING SENSE (podcast)

By |2020-03-25T13:22:22-04:00March 24th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Joining me for my inaugural podcast to try to make sense of this GFC2 (and more) is my colleague and fellow monetary enthusiast Emil Kalinowski. We talk repo, collateral, and why there are only dudzookas from the Fed.  It's also the start and tip of the ice berg for what we hope will become a much bigger project: an expansive, [...]