Bonds

Dealers’ Choice: Repo Facts Are Indeed Very Stubborn Things

By |2019-12-11T12:50:19-05:00December 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 [...]

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 [...]

Fails Swarms Are Just One Part

By |2019-12-04T16:31:02-05:00December 4th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There it was sticking out like a sore thumb right in the middle of what should have been the glory year. Everything seemed to be going just right for once, success so close you could almost feel it. Well, “they” could. The year was 2014 and the unemployment rate in the US was tumbling, the result of the “best jobs [...]

The Big One, The Smoking Gun

By |2019-11-26T15:02:25-05:00November 26th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It wasn’t just the unemployment rate which was one of the key reasons why Economists and central bankers (redundant) felt confident enough to inspire 2017’s inflation hysteria. There was actually another piece to it, a bigger piece potentially complimentary and corroborative bit of conjecture. I write “conjecture” because despite how all this is presented in the media there’s very little [...]

They Aren’t Even Trying To Dethrone the (euro)Dollar

By |2019-11-25T17:17:59-05:00November 25th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I wrote last week what I think is a pretty good explanation for how the world has no choice but to live with the (euro)dollar as its global reserve currency regime. It has little or nothing to do with how oil is priced, and while it’s sexy to talk about a petrodollar the truth is that idea never really mattered. [...]

Rate Cuts, Repo, and (No) Money Printing

By |2019-11-20T16:02:35-05:00November 20th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I don’t think that was quite the message the FOMC wanted to send. It’s pretty clear what the Committee wanted to say, or wanted everyone to hear. The members are done with rate cuts because everything looks great. Sure, it all looked great to them last year but, as has become the conventional interpretation of late, hey, at least it [...]

More (Badly Needed) Curve Comparisons

By |2019-11-20T12:43:24-05:00November 20th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Even though it was a stunning turn of events, the move was widely celebrated. The Federal Reserve’s Open Market Committee, the FOMC, hadn’t been scheduled to meet until the end of that month. And yet, Alan Greenspan didn’t want to wait. The “maestro”, still at the height of his reputation, was being pressured to live up to it. The Fed [...]

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 [...]

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 [...]

The Frights of Repo-ween: Technical Things and Scaredy-cats

By |2019-10-31T20:50:18-04:00October 31st, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s not the level of bank reserves. It never was. QT was always a distraction. As I’ve said from the very beginning, the same thing the Fed’s researchers (rather than top policymakers) will say you if you ask them, the level of bank reserves only tells us what the Fed is doing. It does not, and will not, describe anything [...]