It’s actually pretty easy to see why the IMF is in a hurry to secure more resources. I’m not talking about potential bailout candidates banging down the doors; that’s already happened. The fund itself is doing two contradictory things simultaneously: telling the world, repeatedly, that it has a highly encouraging $1 trillion in bailout capacity at the same time it [...]
A crucial component of many commodity futures markets is a concept called roll yield. It relates to the shape of the curve and therefore how the market is discounting the three fundamental factors of supply, demand, and financing. Contango versus backwardation, there’s a lot to consider and even more at stake.Back in late October 2018, the WTI curve flipped to [...]
There is no schadenfreude at times like these, no time to dance on anyone’s grave. Victory laps are a luxury that only central bankers take – always prematurely. The world already coming apart because of GFC1, what comes next with GFC2 and then whatever follows it? Another “bond king” has thrown in the towel. Franklin Templeton’s candidate for the title [...]
Two weeks ago, OPEC+ and the US came to a deal to cut crude oil production. President Trump hailed the deal, saying it would save “hundreds of thousands” of oil patch jobs. The Texas Railroad Commission meets today to “consider” a cut in oil production in the Lone Star state. Meanwhile, the market has made all this high-level negotiating irrelevant, [...]
What set me off down the rabbit hole trying to chase modern money’s proliferation of products originally was the distinct lack of curiosity on the subject. This was the nineties, after all, where economic growth grew on trees. Reportedly. Why on Earth would anyone purposefully go looking for the tiniest cracks in the dam?My very first day on the job, [...]
It seemed like an odd, counterintuitive market reaction to what was total chaos. First the news of Lehman Brothers followed closely by AIG, panic gripped every corner of the global marketplace. Toward late September 2008, the stock market would meltdown (the main part of GFC1 that most people associate with the term) in a wave of liquidations due to a [...]
For the second time this year, the PBOC has today affirmed Chinese banks are offering a lower benchmark loan rate. The Loan Prime Rate was reformed last August just in time for the monetary authorities in China to make it seem like they are being removed from the decisions. And in time for rate cuts to begin, too. What is [...]
The debate over the shape of the recovery, "V" or "L", which might emerge following the dislocation and global contraction. What clues can we find? 1. Domestic Data clues (The Two Easiest Dots Anyone Will Ever Have To Connect) "Deprive any animal of oxygen and watch how it doesn’t move very fast." How the labor force changed [...]
On March 2, the Bank of Japan leapt into the stock market, Haruhiko Kuroda burnishing his Superman cape as he flew in to rescue the Nikkei. Purchasing a record amount of ETF’s that day, shares in Tokyo surged. It was a clear message, or so everyone thought. Don’t fight the Fed nor the Bank of Japan, not when they can [...]
Questioning the veracity of Chinese estimates (for anything) has always been something of an amateur sport. For a stat like real GDP, everyone “knows” that it is managed. In a complex world where an economic system for a billion and a half is incomprehensibly unpredictable, there’s really no other way to always hit your government’s mark (unless the Chinese are [...]
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