So, the eurodollar curve has inverted. Bad news. Now what? While this is a major milestone in the monetary system’s decidedly anti-inflation/growth journey, it is hardly the end point of it. On the contrary, though it takes a lot of negative, deflationary potential to distort the curve in this way, we need to see if the market sticks with that [...]
168.1 Market says Powell's Second Term Already a Failure———Ep 168.1 Summary———Jay Powell has been nominated by President Biden to serve another term as the Federal Reserve chair. Though his nomination has not even been heard by the US Congress, another group of people has already passed judgement on the second term: the bond market (and they say it'll be a [...]
Stop me if you’ve heard this before: dollar up for reasons no one can explain; yield curve flattening dramatically resisting the BOND ROUT!!! everyone has said is inevitable; a very hawkish Fed increasingly certain about inflation risks; then, the eurodollar curve inverts which blasts Jay Powell’s dreamland in favor of the proper interpretation, deflation, of those first two. Twenty-eighteen, right? [...]
164.3 Economists Can't Define Money nor Observe Velocity———Ep 164.3 Summary———M1 and M2 once informed central bank decisions. But the monetary aggregates were so narrowly defined that they were, in effect, mere keyholes that offered policymakers an unsatisfactory, and often-enough misleading, peek into the great monetary hall. ———Ep 164.3 Topics——— 00:00 INTRO: How to define money? What is money velocity? The [...]
If markets seem a bit on edge, I guess omicron seems a good reason if for no other reason than we don’t know much about it. But even that reaction points toward something else. A truly robust economy has little to fear from such unknowns, even from what might be predictable overreaction across the entire public sphere.The knee-jerk negative sentiment [...]
Flatter. The yield curve continues to shrink in the important middle calendar spaces where growth and inflation expectations run the place. Treasuries have been doing this since around March, a peculiar (given monolithic mainstream reporting otherwise) eight-month reign of growing pessimism rather than inflationary confidence. Did the market foresee omicron more than half a year ago? No. That’s not really [...]
This sour/soar stuff goes back many years. The last time we went through the same hysteria (if for different reasons), everyone said the global economy was going to accelerate, take off, and sail onward forever after. The world was, they all claimed, set to soar.Globally synchronized growth. The bond market didn’t just disagree, it did so vehemently, a pessimism when [...]
164.2 Beijing's Sixth Plenum Confirms World Economy Stinks ———Ep 164.2 Summary———Beijing reconfirmed what was made clear in 2017, during the 19th National Party Congress: the economic boom was over and it is time to prepare for it. If anyone in the West would care to listen, the Central Committee is referring not only to China but the entire global economy. ———Ep [...]
It’s always a balance of probabilities tug-of-war. Markets (not stocks) are continuously trying to discern risk since everything is really converted to some kind of risk-adjusted basis. And if the perceived weight of those tilts downward thinking forward, then it may not matter much or at all what’s going on right now.What’s going on right now is, according to everyone, [...]
164.1 TIC-ked Off About Not Enough Money to Recover Global Economy———Ep 164.1 Summary———America's September 2021 Treasury International Capital data corroborates dis/deflationary indications observed across various sources, the vast majority of which imply there's not enough money, and/or it's inadequately distributed, for the global economy to achieve permanent recovery. ———Ep 164.1 Topics——— 00:00 TIC: Consistent, Coherent, Corroborated, Inflation Never Had A [...]
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