Currencies

Eurodollar University’s Making Sense; Episode 54; Part 3: The Historical Inflation Bias

By Jeffrey P. Snider|2021-03-11T18:42:18-05:00March 11th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

54.3 Deficits + Bond Losses + Inflation Fear = 1937? ———Part 3 Summary———In 1937, like now, circumstantial evidence and biases of central bankers suggested the impending arrival of fierce inflation: huge government deficits, better economic statistics, rising bond yields and excess bank reserves. Yet the underlying condition was of depression and credit illiquidity. ———Episode 54 Intro——— “The pen is mightier [...]

What Gold Says About UST Auctions

By Jeffrey P. Snider|2021-03-10T19:29:16-05:00March 10th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The “too many” Treasury argument which ignited early in 2018 never made a whole lot of sense. It first showed up, believe it or not, in 2016. The idea in both cases was fiscal debt; Uncle Sam’s deficit monster displayed a voracious appetite never in danger of slowing down even though – Economists and central bankers claimed – it would’ve [...]

Eurodollar University’s Making Sense; Episode 54; Part 2: As The CNY Turns

By Jeffrey P. Snider|2021-03-10T17:55:53-05:00March 10th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

54b Trigger Warning? China's Yuan and PMI Turn Bad? ———Part 2 Summary———The appreciation of the Chinese yuan against the American dollar has paused. A survey of the Chinese services sector scored a historic low. Are these the first indications of an economic slowdown? A slowdown that is not only Chinese but global? ———Episode 54 Intro——— “The pen is mightier than [...]

What Must Lie Beyond the M’s

By Jeffrey P. Snider|2021-03-11T17:19:49-05:00March 10th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This particular part of the hysteria is understandable, if thoroughly unconvincing. Forget the Fed and its bank reserves for moment, whatever those are now and then. The banking system is where it’s at, monetarily speaking, and it is the banking system which seems to have lost its handle on the money printing lever. If we’re focused beyond bank reserves and [...]

Deja Vu: Treasury Shorts Meet Treasury Shortages

By Jeffrey P. Snider|2021-03-09T18:37:14-05:00March 9th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Investors like to short bonds, even Treasuries, as much as they might stocks and their ilk. It should be no surprise that profit-maximizing speculators will seek the best risk-adjusted returns wherever and whenever they might perceive them. If one, or a whole bunch, has to first “borrow” a security the one doesn’t own in order to sell something at a [...]

Standard Textbook Dollar, Or Eurodollar Standard?

By Jeffrey P. Snider|2021-03-08T20:06:11-05:00March 8th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s standard textbook stuff. Convention has it that “capital flows” are determined by the portfolio effects of interest rate differentials. Quite simply, if yields aren’t very high for low risk US instruments (like UST’s) or their European counterparts, fixed income managers must go hunting for yields overseas in Emerging Markets who offer fatter returns by comparison. Thus, “capital” is said [...]

Inflation, Deflation, The Historical Record of Bank Reserves

By Jeffrey P. Snider|2021-03-08T18:55:32-05:00March 8th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Putting some charts and data behind Friday’s extensive essay about bank reserves and inflation intended to further highlight some key parallels…The precursor event to yield caps being imposed in the United States actually took place during the Great Depression. Then – as now – officials at the central bank expected their “money printing” efforts to pay off in the reverse [...]

Eurodollar University’s Making Sense; Episode 54; Part 1: Inverted Inflation (expectations)

By Jeffrey P. Snider|2021-03-08T17:56:59-05:00March 8th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

54a US TIPS Curve Inverts: An Economic Warning? ———Part 1 Summary———The US Treasury inflation-protected security curve has gone upside down. Indeed, it has NEVER been more upside down. What is the Treasury market telling us about the economy's prospects? Also, how long does reflation typically last? Are we closer to its beginning or end? ———Episode 54 Intro——— "The pen is [...]

Weekly Market Pulse: How High Can Rates Go?
Weekly Market Pulse: How High Can Rates Go?

Weekly Market Pulse: How High Can Rates Go?

By Joseph Y. Calhoun III|2021-03-08T08:45:17-05:00March 7th, 2021|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Markets, Stocks|

I've been getting that question a lot these days. How high can rates go? It is asked in a way that seems to imply that the answer is obvious - not much. Why? The answer is almost always the same; the Fed can't and won't let rates go up. If they did, it would kill the economy and raise the [...]

Yet Another Reminder: Listen To Xi Spell It All Out

By Jeffrey P. Snider|2021-03-05T19:54:09-05:00March 5th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I keep saying to take them at their word. For years now, China’s top Communists have been upfront and honest in a way that compared to what goes on in Western nominally-free democracies would be refreshing. Don’t get me wrong; this is no way implies, nor do I claim, that authoritarian thuggishness can be superior. Rather, this is the small(ish) [...]

Weekly Market Pulse: How High Can Rates Go?

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