52.2 Taper Tantrum II: Yield Curve Twists, Badly?The US yield curve has twisted as Bill yields fall and Bond yields rise. We review a similar situation in 2013 popularly known as "the Taper Tantrum", WHICH WAS NOT A TAPER TANTRUM! Then - like now - a collateral scramble in Bills and a relief sell-off in Bonds. [Emil’s Summary] The theme of [...]
52.1 Fedwire Breaks: Anomaly or Trigger?Fedwire, the interbank system that transmits billions between 9,000-plus members, broke on Wednesday. The Fed says, "operational error" implying mere technical trivia - an anomaly. Why do some breaks stay mere anomalies while others trigger volatile, systemic consequences? [Emil's Summary] The theme of Making Sense Episode 52 is how an environment reacts to an anomaly. [...]
DISCLAIMER: The opinions expressed within the content are solely the author’s and do not reflect the opinions and beliefs of the website or its affiliates. 51.0 Reading Around: Pettis On Tariffs and US Jobs Economic historian Michael Pettis' essay on why an "obsolete understanding of trade flows ends up pointing trade policymakers in the wrong direction." A reading, by Emil [...]
I was told many years ago when I started in this business that it wasn't my job to predict the future. Our job as investors is to properly and accurately interpret the present. I was also told that wasn't as easy as it sounded and the current consensus about the state of the world was probably, almost certainly, almost always, [...]
DISCLAIMER: The opinions expressed within the content are solely the author's and do not reflect the opinions and beliefs of the website or its affiliates. 48.0 Reading Around: Myrmikan on System-Critical Short Squeezes Financial historian Daniel Oliver's essay on the systemic consequence of the 1907 short squeeze on United Copper Company and lessons for today. A reading, by Emil Kalinowski. [...]
50.0 Why Economists Kept Getting the Policies WrongJeff Snider reacts to two recent articles: "Bond yields are not good predictors of inflation" (Peterson Institute for International Economics) and "Why economists kept getting the policies wrong" (Financial Times). ———SPONSOR——— But first, this from Eurodollar Enterprises! The motion picture event of the summer: (Con)Tango & Cash. When an international smuggling ring uses the [...]
49.3 Week 48 of 'Record' Jobless ClaimsLearn how to reconcile a positive surge in retail sales with a nightmare string of 'record' jobless claims and lousy sentiment reported by the University of Michigan consumer survey. Perhaps pent up demand? Maybe. An unusual, poorly explained seasonal adjustment boost? Maybe too. ———SPONSOR——— But first, this from Eurodollar Enterprises! The motion picture event [...]
For a couple of weeks, the $600 payments from Uncle Sam seemed to have found their way into the tanks of Americans driving their automobiles a little bit more than they had. According to the US Energy Information Administration (EIA), the total amount of gasoline “supplied” by the domestic marketplace reached 8.4 mbpd the second week of February. Like retail [...]
49.2 Do Not Rule Out a Market Panic Next MonthA Financial Times column warns of a US Treasury Bill air pocket in March. Learn the little-known history of a mid-market, 1970s German bank that compelled regulators to move towards capital and supplementary leverage ratios. The very ratios that may now trigger uncertainty. ———WHO——— Twitter: https://twitter.com/JeffSnider_AIPTwitter: https://twitter.com/EmilKalinowskiArt: https://davidparkins.com/ Jeff Snider, Head of Global Investment [...]
Sell-off. No, rout. Heck with that, Armageddon! It really had been that hysterical at times, and not just because it was declared a foregone conclusion. Certainly a big part of it, the faux certainty, more than that the gross overhyping of what really had been a relatively small change; the whole mainstream was afire with an inflationary mountain fashioned from [...]
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