This goes back to the earliest days of the Federal Reserve. In 1912 and even before, in order to sell the skeptical public on another central bank – the nation’s third, and first in three-quarters of a century - in what was already going to be an uphill battle, Congress demanded that this thing be called something other than a [...]
He certainly is at least when compared to the usual beauty contest contenders like Bill Gross or Jeff Gundlach who typically flock to these occasions. Here we are in reflation again, so interest rates must have nowhere to go but up. Therefore, it follows, bonds are in for a world of hurt all because inflation is being let loose by [...]
Last week I was contacted by two clients seeking information about cryptocurrencies. One was my godson, 12 years old and just getting started in investing. So far, he's bought Nintendo and Roblox (the latter against my recommendation but what do I know about video games?). But last week he said he wants to buy a cryptocurrency. He first mentioned Dogecoin [...]
Treasury Secretaries, like Federal Reserve Chairmen, they don’t talk much about or pay much attention to the market’s need for collateral. They may pay some, but not specifically collateral if only under the vaguely defined category of “market consideration” when setting auction supply. Collateral shortages have come and gone, however dreadful, never eliciting a direct response insofar as supply has [...]
Trillions in “stimulus”, American consumers buying goods at a frenetic pace (in lieu of services), gasoline prices punishing, the start of favorable base effects, yet all those things couldn’t push the inflation rate much further beyond the Federal Reserve’s 2% explicit target. And remember, in order to meet the newly designed economic goals on the inflation side – average inflation [...]
Disappointing some, US real GDP managed to come in 6.2% higher in Q1 2021 when compared to Q4 2020. This was slightly less than the “consensus” which had figured around 6.6% growth and then the more optimistic calculations including the Atlanta Fed’s GDPNow tool that had only yesterday pointed to 8% (with some outlier whispers dialing up double-digit gains). Even [...]
Words have meaning for a reason, to convey precise ideas easily and readily understood by the reader or listener. If you use the term “stimulus”, as its root already suggests you’d expect something to be stimulated by whatever is being classified using this specific grouping of letters/sounds. Context rounds out the meaning.For the last twenty years, you’d have been wrong [...]
67.3 There are 6 (to 20?!) Liens on each US Treasury———Part 3 Summary———US Treasury Securities are the financial system's best collateral. But quantitative easing pulls Treasuries out of the system! In response market participants are 'forced' to repledge the SAME security more and more and more and more and more and more (and more and more and more and more [...]
Silver linings have been hard to come by lately, especially last year. Twenty-twenty was a total washout in almost every way imaginable; and that’s an understatement. Still, there were some small signs of genuine progress such as Jay Powell’s thorough contribution to QE debunking. Bank reserves went sky high while practically nothing else did (other than equities), certainly not inflation. [...]
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