There is definitely some disturbance in swaps markets as spreads have been far more volatile lately than at any point since the dramatic shift in March. While most of the action had been concentrated in the 10-year, there has also been a noticeable change in 5-year spread volatility. I don’t think there is much doubt that recent volatility in treasury [...]
Earlier this week, Bloomberg published an article that examined the case of the missing link. It was not devoted to human evolution in a biological sense, but rather unintentionally to the emotional need to resist change. The title of the piece is, America’s Role of Consumer of Last Resort Goes Missing, and it continues from there on the theme of [...]
Don’t look now, but US dollars are tightening again. The dollar calm that swept over markets since September 4 appears to have reached a nadir on October 23. Eurodollar markets in late October only moved very slightly, but enough to keep futures from rolling with the calendar, and thus indicating that risk positions and balance sheet expansion might be changing. [...]
Following up on yesterday’s inflection narrative, Caterpillar seems to have fallen prey to the same blindspot as economists. Everything with regard to economics and the economy is always assumed to move in a straight-line, forever. Linearity is a feature of the predictive economic model, and it is such an obvious weakness. In the earning’s release for the first quarter of [...]
Quarterly results from IBM are watched because they serve as a proxy for business spending across the globe. Capex in the modern world often takes the form of technology/computer investments. In fact, productivity growth in the past three decades has been driven, at the margins, by corporate investments in digital technology. Ever since late last year, IBM has been keeping [...]
Perhaps being deprived of incoming data has set my mind too far toward conspiratorial, but there were a few developments in the global finance realm that piqued my interest. First, the head of the World Bank basically warned emerging market economies to get their act together in the next few months. “We think that now emerging market economies have maybe [...]
For about three hours last Wednesday the goals of the Ben Bernanke led Fed were achieved when the NASDAQ market stopped trading due to a technical glitch. With no quotes available, investors were not able to sell - or buy - and the level of the NASDAQ market was stuck at a semi-permanent plateau. Finally, a way to unwind QE [...]
Everything that happens has already happened at some point or another in history. The tortured history of crises occurs because no one was paying attention the first time. It is eerie, though, how similar the growing currency crises in BRIC’s and emerging markets are to the Asian flu of 1997-98. There is one primary difference; the cause of the dollar’s [...]
US and European markets have lazily ignored what is taking place in locales far and wide. This is not some strain of investor xenophobia, but rather the comfort created by the Federal Reserve and ECB’s twin policies of courting complacency. Through QE/OMT and their attendant processes, hedging and the appeal of hedging have been quashed as “tail risks” have receded [...]
Apparently it is time to celebrate inflation, however it might be defined. Inflation is looked on no longer as the bane of central bankers, but their reason to exist. This is now near universal, as one after another nation is forced by central banks to appeal to debasement as economic salvation. On the surface, it looks as if the Bank [...]
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