Quarter End But Not Quarter End
"Something" "Something" in Japan - cross currency basis swaps hit new record low (negative) and related effect on JGB's.
More Deutsche Bank Attention Means Even Less ‘Dollars’
It seems as if Deutsche Bank is on everyone’s mind, even if nobody knows exactly why. Stocks were down today which is really unremarkable but has become so by the standards of just this year where nothing bad is supposed to be able to intrude. That aside, the news from Germany was quite unnerving. Bloomberg reported early this afternoon that [...]
Searching For 2a7 Comfort In CP And Finding Instead More Confirmation Of The Same ‘Something’
With 2a7 money market reform only a few weeks from its full implementation, there should be by now visible shifts in all the places where such reform will directly impact. Prominent among these money spaces is commercial paper, where the ranks of prime MMF’s that once lent in this market have been reduced in the shift toward government funds. As [...]
A Realistic Decomposition Of Rates, Or At Least A Realistic Interpretation Of It
Last April, former Fed Chairman Ben Bernanke wrote a series of blog posts for Brookings that was intended to explain one of the biggest contradictions of his legacy. If quantitative easing had actually worked as he to this day suggests that it did, why wasn’t the bond market in clear agreement? In order to try to reconcile the huge discrepancy, [...]
Moving Beyond Normal
Durable goods continue to suggest a weak economy that only seems to remain in that state. Year-over-year, unadjusted estimates for new orders rose slightly for the first time since May, while seasonally adjusted total orders (including the transportation sector) were fractionally lower at $226.9 billion. That amount was 2% less than January 2016 and 4.3% below August 2014. Once again [...]
No Need For Yield Curve Inversion, There Is Already Much Worse Indicated
Though I highly doubt he will admit it, he’s just not the type, even Ben Bernanke knows on some level that bond market is decidedly against him, or at least his legacy. Economists have a funny way of looking at bonds, decomposing interest rates into Fisherian strata. To monetary policy, interest rates break down into three parts: expected inflation over [...]
A (Significant) Tale Of Two Banks
On August 31, 2008, Germany’s Commerzbank announced that it was purchasing ailing rival Dresdner Bank from Allianz SE. As usual, however, the deal wasn’t described in those terms as nothing ever is so honest in public. Then-Allianz CEO Michael Diekmann said at the time of the announcement: As a strong bank, the new company can safeguard jobs in the long [...]
The Effects Of Money On Trade
There can be little doubt now outside of orthodox economics that the global economy is actually slowing, not accelerating as has been predicted. Economists themselves, however, continue to claim that things are getting better when the data strongly suggests otherwise. The latest depressing figures are from a pair of (orthodox) supranational organizations. First, the World Trade Organization (WTO) drastically reduced [...]
The Dollar Perspective Matters
Perhaps the hardest part of analyzing the eurodollar system is synchronizing all its various dimensions into a common perspective. Coming from the traditional standpoint that views all these various parts as if they are all separate, such a task is often quite difficult. For example, the repo market is almost always described from the cash perspective as if there only [...]
Why It’s Not Really About Deutsche: Overwhelming Evidence of ‘Something’ In ‘Dollars’
For quite some time now I have been writing (constantly) about “something” going in “dollar” markets and funding markets all over the world. Chinese markets related to “dollars” have been the most prominent in their disorder, but there is a degree of causation that runs from eurodollars to China and perhaps back again. In other words, Chinese illiquidity is not [...]
Stay In Touch