China’s currency had been on fire for seven months straight. Rising nearly in a straight line, from May 27 last year until very early January this year, CNY had gone from a certain plunge into the devastating monetary abyss (unintentional devaluation) to a significant basis for Xi Jinping’s global boasting. This was no ordinary turnaround.The timing of it speaks initially [...]
There’s one part of the dollar story I’ve not yet touched on recently. We’ve already heard, too much, about how the Fed’s killing the dollar, or at least is aiming to with all its immense money printing fire power. While it’s the euro which has demanded so much from DXY that it almost seems plausible (to a few) this time, [...]
On March 15, 2013, the US Treasury Department issued a request for a “large position report” (17 CFR Part 420). Any institution holding $2 billion or more of the 2% notes expiring in February 2023 (10-year maturity) had until March 21 to disclose that fact to the Federal Reserve Bank of New York (faxed disclosures accepted). The repo rate for [...]
When it’s all over with, I think we’re going to find out we’ve all been unnecessarily harmed by two stochastic models. And in the greatest tragic irony of them all, it was entirely predictable. These statistical constructions can’t predict a thing, subject as they all are to GIGO limitations (Garbage In, Garbage Out). It’s the math which gives them the [...]
I actually wanted to focus on this yesterday but confirmation wasn’t forthcoming until today. So, it ended up being a broader note on the dollar which only included some mention of Brazil in passing. Still a worthwhile couple of minutes. There were rumors that Banco (central) do Brasil was intervening or was going to intervene in its local currency markets, [...]
So much of the growth scare scenario relies upon China’s willingness to end it. By count of conventional Economics, there cannot be a case where a country like China just sits back and lets the economy fall into (further) decay. The argument will always devolve into some form of debate as to economic potential, but surely in a place like [...]
I wrote last week what I think is a pretty good explanation for how the world has no choice but to live with the (euro)dollar as its global reserve currency regime. It has little or nothing to do with how oil is priced, and while it’s sexy to talk about a petrodollar the truth is that idea never really mattered. [...]
It seems as if we’ve found one of those interim periods that often accompany times of uncertainty. Markets, stocks as well as bonds, are in a wait-and-see mode. Either the next shoe drops, as is feared, or the grand response works, as is widely hoped. Which way are the risks perhaps rebalancing? The global downturn that developed late last year [...]
Two on the same day, likely not coincidence. The next stage of “dovishness” may be upon us. It won’t be rate cuts; those won’t happen until all other excuses have been exhausted first. Jay Powell’s confused gang won’t give in until kicking and screaming there’s really nothing else left. The Fed “pause” isn’t working. To up the ante a bit, [...]
Perhaps it shouldn’t come as a surprise. After all, during the first quarter of this year several key banks announced they had had enough. Goldman Sachs, Nomura, Credit Suisse, as well as others, they all broadcast cuts to key operations. The FICC stuff, or bond trading to put it euphemistically. The very place the world actually gets dollars. Only, they [...]
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