96.2 Reviewing June’s TIC Data Raises 3 Concerns

———Ep 96.2 Summary———
The US Treasury Department released their Treasury International Capital, one of the keyholes analysts can look through to get a sense what is happening in the eurodollar system. Jeff Snider explains three items that caught his attention. Three concerns.

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Twitter: https://twitter.com/JeffSnider_AIP
Twitter: https://twitter.com/EmilKalinowski
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Emil YouTube: https://bit.ly/310yisL
Art: https://davidparkins.com/

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———Ep 96.2 Topics———

00:00 Intro: June’s Treasury International Capital update has THREE! important developments.
01:08 Part 01: May’s TIC data showed foreigners were net SELLERS of US assets; a warning. June?
02:52 A review of David Parkins’ latest illustration.
03:27 Part 02: China’s CNY-USD exchange rate is being held constant but TIC doesn’t support it.
06:24 A rising CNY should be reflected as growing foreign exchange holdings at the PBOC.
09:02 Might dollars be coming into via large banks and the CIC but bypassing the PBOC and SAFE?
14:00 Part 03: US banks are borrowing more collateral for repo; good! But less UST bills. Hmm.
17:08 With fewer UST bills used it suggests less quality / more risky assets are employed. Hmm.
20:10 The economy is turning away from recovery, thus those riskier assets are unsettling.
22:06 A review of David Parkins’ ‘Bankers Rehypothecate Dolly the Sheep’.
23:16 Past episodes of ‘Eurodollar Squeezes’ resulted in collateral / UST / TBill scrambles.

———Ep 96.2 References———

A TIC Trio of More Serious Deflation Potential: Asset Rebound, Banks Can’t Borrow T-bills From Foreigners, And The China Cringe Which Goes Along: https://bit.ly/3zjhBs0
Alhambra Investments Blog: https://bit.ly/2VIC2wWlin
RealClear Markets Essays: https://bit.ly/38tL5a7

———Who———

Jeff Snider, Head of Global Investment Research for Alhambra Investments and Emil Kalinowski. Art by lead Bedouin driving the camel train of monetary satire, David Parkins.  Podcast intro/outro is “Multidimensional” by Sarah, the Illstrumentalist from Epidemic Sound.