Is the dollar rising, or falling? Does it matter? In one sense, obviously it does. The way in which the dollar behaves dictates how everything else goes. The potential mix-up and confusion start when we have to define exactly what we mean by “dollar.” Or rising. The rising dollar doesn’t always rise. If we are talking about the US currency’s [...]
An honest-to-goodness oil crash. For a time this morning, the front month WTI futures contract had fallen into the $20s for the first time since Euro$ #3. Up to now, that prior outbreak had been the more (in)famous as far as crude prices have been concerned. Over the intervening years, it was thought that supply and demand had been made [...]
The 3-month Treasury bill’s equivalent yield has plunged, absolutely plunged. It was 1.45% last Thursday. Today? All of 45 bps. A one-hundred bp drop in six trading sessions. One hundred. Six days. Rate cuts, right? Sure, that’s the premise. Like eurodollar futures, the front end of the yield curve is saying that there are more of them coming. The Fed’s [...]
Unlike the headline Establishment Survey, the rest of the economic data isn’t surging like it’s 2014 all over again. On the same day the BLS issues the next blowout payroll report, the Census Bureau suggests instead US demand, at least for goods produced overseas, continues to decline at a precipitous pace. Seasonally-adjusted, there had been something of a rebound in [...]
The Federal Reserve has been trying to propagate two big lies about the economy. Actually, it’s three but the third is really a combination of the first two. To start with, monetary authorities have been claiming that growing liquidity problems were the result of either “too many” Treasuries (haven’t heard that one in a while) or the combination of otherwise [...]
Take your pick, apparently. On the one hand, IHS Markit confirmed its flash estimate for the US economy during February. Late last month the group had reported a sobering guess for current conditions. According to its surveys of both manufacturers and service sector companies, the system stumbled badly last month, the composite PMI tumbling to 49.6 from 53.3 in January. [...]
Taking another look at what I wrote about repo and the latest developments yesterday, it may be worthwhile to spend some additional time on the “why” as it pertains to so much determined official blindness, an unshakeable devotion to otherwise easily explained lunar events. The short version: monetary authorities as well as the “experts” describe almost perfectly risk averse behavior [...]
When you focus exclusively on bank reserves, even when the answer is staring you in the face you just can’t appreciate it or decipher the implications. Nearly six months later, they still don’t know what happened in the repo market last September. By “they” I mean, of course, the Federal Reserve including all the presumably technically proficient operators at its [...]
Well, that wasn’t he had in mind. The whole point of a rate cut, any rate cut let alone an emergency fifty, is to signal especially the stock market that the Fed is in the business of…something. The public has been led, by and large, to assume that something good happens when the Fed Chair shows up on TV. If [...]
It’s interesting what the eurodollar futures curve has done today. Over the past several weeks, of course, the curve has collapsed though with much more focused buying at the front end of it. That’s understandable given the common scenario being priced in – that the Fed will reluctantly be forced into sizeable rate cuts very soon. In fact, the current [...]
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