It almost seems to be a case of traders seeing exactly what they want to see instead of believing their “lying eyes.” Money rates in China have declined in the past few days as speculation abounds that the PBOC reduced the interest rate on its rollovers of the second part of the Medium Term Lending Facility (MLF). The PBOC had [...]
It was bound to happen as the monetary affairs throughout the world “tighten.” The Swiss National Bank (SNB) had tied its fate, with good reason, to that of broader Europe but made the assumption that the ECB could accomplish both economic and financial goals. In 2011, that meant pegging the franc to the euro and using the SNB’s balance sheet [...]
As additional comparison for the current state of European credit, as you can easily get lost in the train wreck, I thought it interesting to include separately a wider perspective. I’m sure what I present below will make “sense” to someone at the ECB or one of the other central bank confederates in the context of monetary economics as it [...]
If the ECB is deliberately trying to prove how little efficacy it still may hold, they are doing an excellent job at it. There has been nothing but QE, QE and more QE in Europe since the New Year, which in the past might have at least courted some significant positive thoughts. If you recall back in September, at the [...]
While Abenomics continues to be classified as “pro-growth” rather than vilified for what it has done, that is as clear in the real economy as it is in the financial realm. Japanese experimentation with ZIRP has destroyed, effectively, any informational content from the JGB curve which contributes to continued resource waste. The Japanese just auctioned a 2-year note at a negative [...]
Indonesia has been here before, playing a key role in fomenting the Asian “flu” in 1997 and 1998. As it turned out, the slide in the rupiah last year, caught up in the taper drama of US “dollar” tightening, was just the initial phase of what looks to be shaping up as a protracted “dollar” problem. It never gets treated [...]
The growing sense of an economic cliff is based on three major factors, all of them in massive markets as opposed to manipulated and ill-suited statistics. The most obvious are oil prices and the UST curve (and related curve mechanics) as they have turned to prices and shapes not seen since the worst of the last crisis. The third, “dollar” [...]
The amount of credit market fireworks this week is only surpassed by those of October 15. Everywhere you look, credit markets are not just growing bearish but, as I said earlier in the week, bearish in comparison with past crisis periods. The past few days have surpassed even that observation, making credit now a fast-moving indicator of still nothing good. [...]
Back at the end of August, it was becoming clear that there was a growing sense of maybe not distrust but far less blind faith emanating from credit markets all over the world. Without a single epicenter it has been far more difficult to simply side step all economic permutations as singularly important, rather the culmination of increasing worry is [...]
With Europe reporting GDP, reactions have been somewhat varied. In some places, it was taken as not as bad as feared, while others were downright cheered by a lack of total collapse, as if that is now the standard for economic progress. Since GDP tends to be noisy in the short run, the major components, the economic base, continues to [...]
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