Everyone, or at least all the right-thinking people, believes that capitalism needs to be reformed. Elizabeth Warren calls her version Accountable Capitalism. Marco Rubio dusted off an 1891 speech by Pope Leo to advocate what he calls Common Good Capitalism. Both are attempts to correct what these lawyers see as flaws in the current incarnation of economic organization that is [...]
Saudi Arabia once burned through the bond market on par with demand for Argentina’s paper. During the 2016-17 globally synchronized growth-inspire Eurobond binge, the country made up for its lost oil revenues (oil crash and all) with dollar-denominated, offshore debt flotations. These merely stabilized the country’s forex reserves after they had collapsed (by a third) alongside benchmark Brent crude prices [...]
March 15 was when it all began to come down. Not the stock market; that had been in freefall already, beset by the rolling destruction of fire sale liquidations emanating out of the repo market (collateral side first). No matter what the Federal Reserve did or announced, there was no stopping the runaway devastation.It wasn’t until the middle of March [...]
If a central bank controls the money supply, then it can, in theory, control inflation. And if it accomplishes this feat through the use of a short-term money rate, then what part of bond yields would lie beyond its power? None.That’s what bond yields are, after all, in theory the carrying forward of inflation expectations into the future built upon [...]
With survey after survey showing Americans are now firmly more concerned about the economy than the pandemic, the narrative reassurance program will be even more in demand than ever. The latest Axios-Ipsos poll suggests nine out of ten US citizens are today worried about economic disaster. To counter the growing angst, Treasury Secretary Mnuchin declared over the weekend that his [...]
I never said it wasn't powerful. What I continue to show is that it doesn't work. Ben Bernanke kept his job because despite the carnage, in times of turmoil people are willing to give anyone a second chance. And if the turmoil never ends, so much the luckier - for him. Anyone who promises it's all under control. A combined [...]
CHANNELS: iTunes: https://apple.co/3czMcWN Google Podcasts: https://shorturl.at/fpsEJ Spotify: https://spoti.fi/3arP8mY Emil-Tube: https://youtu.be/yqmVom5lq58 Alhambra-Tube: below SUMMARY: Ancient myths, like the Minotaur of Crete, Monkey King or Odin, are not taken seriously. But modern myths, like the Greenspan Put, the Bank of Japan buying stocks or bond kings selling Treasuries, not only are taken seriously, but acted upon. KEYWORDS: Eurodollar University, Jeff Snider, [...]
As I’ve said, it is a threefold failure of statistical models. The first being those which showed the economy was in good to great shape at the start of this thing. Widely used and even more widely cited, thanks to Jay Powell and his 2019 rate cuts plus “repo” operations the calculations suggested the system was robust.Because of this set [...]
It was chaos. Rumors of not one but two large European banks being pushed to the brink. Money market funds worried about breaking the buck rapidly pulling cash out from under any global name. The FOMC debating what would’ve been a repo-like bailout, even though $1.6 trillion of bank reserves had been “added” to the system. What was most damaging [...]
Can a PMI actually hit zero? We may be about to find out. According to IHS Markit, the Eurozone’s economy is already flirting with that boundary this month. The services index plummeted way beyond March’s revised estimate of 26.4, an astoundingly alarming number in its own way. For April, though, down even more all the way to 11.7. That meant [...]
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