Last September 28, Treasury Secretary Janet Yellen wrote to Nancy Pelosi of the House of Representatives to inform its Speaker that the government would run out of cash, and accounting tricks, by October 18. Unless Congress, starting in the House, did something about the so-called debt ceiling, Treasury would be forced to take even more restrictive, potentially destructive means to [...]
This isn’t going to be like the tale of Goldilocks, at least not how it’s usually told. There are three central banks, sure, call them bears if you wish, each pursuing a different set of fuzzy policies. One is clearly hot, the other quite cold, the final almost certainly won’t be “just right.” Rather, this one in the middle simply [...]
The US Treasury curve, as you might have heard, is inverted. After today’s repeat sell-off, it’s a little less inverted than it had been recently (un-inverted in the 2s10s, which isn’t unusual) given how yields closed at the longer end up more than those up front and middle. The zig-zag back and forth of ultra-short run market fluctuations continues.But what [...]
Someone once said that the stock market is always climbing a wall of worry. Maybe that had been true in some long-ago day, but whether or not it might nowadays is beside the point. The nugget of truth which makes the prosaism memorable is the wall rather than the climber. There’s always something going on somewhere to get worked up [...]
You look at the two charts below, and immediately you see how something doesn’t add up. On the one side, US banks haven’t lent dollars to Russia since the first time the Russians ended up in Ukraine back around February 2014. The US government declared domestic firms wouldn’t do business with Russian banks and they really haven’t.Score a victory for [...]
Why is the yield curve so steep up at its front? The obvious answer is “rate hikes” and while technically true this leaves out an important set of historical facts. These are that the agency responsible for the rate hikes will, undoubtedly, stick with them regardless of actual conditions on the ground until a forward time when doing so could [...]
Alhambra CEO Joe Calhoun reacts to last week's inversion of the yield curve and what investors should do now.
The yield curve inverted last week. Well, the part everyone watches, the 10-year/2-year Treasury yield spread, inverted, closing the week a solid 7 basis points in the negative. The difference between the 10-year and 2-year Treasury yields is not the yield curve though. The 10/2 spread is one point on the Treasury yield curve which is positively sloped from 1 [...]
A nod to just how backward and upside down the world is now. The economic data everyone is made to pay attention to, payrolls, that one is, in my view, irrelevant. As is the consumer price estimates from earlier this week, the PCE Deflator. That’s another one which receives vast amounts of interest even though it is already old news.Yet, [...]
It’s been a while, but the BLS finally got around to releasing a near-perfect payroll report. These had been incredibly common even during prior downturns and near recessions, which should only raise questions about them. Among any immediate concerns, how relevant can these data points be?In our current day, like the consumer price data, they’re already old news. That’s not [...]
Stay In Touch