With close experience to the “dollar” run in July and August, we should expect that at least the contours of that disorder would be visible in the TIC data for July. The figures provided by the Treasury Dept. did not disappoint. In fact, the “dollar” waves themselves become almost fully visible in the data here and have really illuminated the [...]
Since the corporate bond bubble has added more than a half year since I last updated its size potential, it is worth reviewing given the lack of enthusiasm in that space post-August 24. Even before that “dollar” run clocked China and the rest of the world, the corporate bubble was being dented by the larger “dollar” trend dating back to [...]
Worse before it gets better: "Despite the perennial doom and gloom that I guess is inevitably part of a presidential campaign, America is winning right now," Obama said at a meeting of the Business Roundtable in Washington. "America is great right now. We can do even better." … "In the echo chamber that is presidential politics, everything is [...]
When I wrote on Friday that I was encouraged for the first time in years over the combined rise of Trump and Sanders I meant nothing by way of suggesting either as an actual candidate or what they might do should they pull it out. If anything, I implied that the political situation might have to follow the economy; that [...]
I have no idea what the Fed will do except to say it is likely to make matters worse regardless. That is the nature of monetarism in 2015 in no small part because that is where a financialized economy can only lead. Having been unable to do so this year so far, however, does seem to suggest at least a [...]
Being September 15 and thus entering the final two weeks of the quarter, it seems appropriate to review all the liquidity bottlenecks (or at least the symptoms of them). Since GC repo rates found themselves retracing the end of Q1 at the end of Q2, it feels appropriate to start there. As you might expect, the repo rates thus far [...]
Industrial production contracted again in August at a rate (month-over-month) similar to that in June. That would suggest the rebound in July was the aberration since IP has now declined in seven out of the eight months this year. The year-over-year growth rate of just 0.9% would have been the worst of the “recovery” except that downward revisions forced June’s [...]
If we go by the track of the “dollar” in setting economic expectations, we would expect to have seen a noticeable drop in economic activity in the first part of the year followed by a very tepid rebound lasting only a few months (“rebound” is too charitable of a qualifier, more like “not getting directly worse”). The ugly appearance of [...]
The new week opens much the same as last week traded, with narrow ranges abounding in risky asset prices. From leveraged loans to junk debt, funding markets continue to run the correlations. From this “dollar” view, the lack of “buying” interest in the corporate bubble, bargain value or not, may more properly be understood as lack of “funding” interest. On [...]
I think the dominant feature of August was rising interbank “dollar” rates; everything that followed out in the open was traced to “whatever” was taking place in funding markets. Repo rates shot upward, as did unsecured LIBOR (leading to serious credit risk implications via TED). All that led into the yuan crisis escalating beyond the PBOC’s rather limited control (which [...]
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